Up-to-date information for employers on topics and issues that may affect workplace operations. The posts are current as of the date of the posting.


by Jennifer Brown Shaw and Alayna Schroeder | The Daily Recorder | Nov 1, 2013

Most California employers know they must pay non-exempt employees for all their work hours. However, understanding pay and related obligations can be significantly more complicated when an employee’s workday does not begin and end in a single location-for example, if the employee services several clients throughout the workday.

Travel Time During the Workday

Employers generally need not pay for the time an employee spends commuting to and from work, but must pay for all of an employee’s business travel in the middle of the workday. If an employee does not report to a fixed worksite and instead is assigned to report to an alternate location-such as a client site-the California Department of Labor Standards Enforcement (“DLSE”) generally takes the position that the employee may be required to commute a “reasonable” distance, and the employer need not pay the employee for that commute time. Unfortunately, the DLSE does not define what “reasonable” means in these circumstances. Many employers set a standard “reasonable” commute distance (such as the time it would take the employee to commute from home to the company’s offices or other fixed location) or time (such as 30 minutes), but it is unclear whether the DLSE would agree with this approach.

On the other hand, an employer must pay for all business travel that occurs in the middle of a single shift (even if the shift spans multiple workdays). Also, if an employee traveling between two client sites or other locations spends time on personal pursuits in the middle of the travel (for example, returning home for lunch), the employer must pay for the amount of time it takes to travel directly between the two work locations. Because an employer cannot monitor employee travel times individually, it must accept the employee’s stated travel times as accurate. If the time spent seems inappropriately long without adequate justification (for example, and accident or detour), the employer should still pay for the travel time, but can investigate the potential abuse and discipline the employee if appropriate.

Split Shift Premium

Employers may also incur liability to pay a “split shift” premium to certain workers who travel during the workday, if their employer-provided work schedules are interrupted by non-paid, non-working periods “other than bona fide rest or meal periods.” In those circumstances, an employer must pay the employee one hour’s pay at the minimum wage, in addition to the minimum wage for that workday. The DLSE considers a “bona fide” meal period to last around one hour or less.

For example, if an employer assigns an employee to work at one client location in the morning and another in the afternoon with a few hours of time off in between, the employer may be responsible for the split shift premium. It does not matter that the employee is free to do whatever he or she wants during that period of time, or whether the employee prefers the schedule. Again, because split shift liability is based on a “work schedule,” not a “workday,” the employer may incur split shift liability anytime a single shift is dividedäóîeven if it divided over two workdays.

Expenses and Liability

California Labor Code 2802 requires an employer to indemnify an employee for reasonable and necessary business expenses, including travel expenses. The DLSE takes the position that if an employer reimburses employees for driving their personal vehicles at the standard IRS mileage rate (currently, 56.5 cents per mile), the amount presumptively covers driving expenses including gas, maintenance, and insurance.

However, employers should not assume paying the IRS rate will relieve them of all potential driving-related liability. In a recent Second Appellate District case, Moradi v. Marsh USA, an employer required an employee to drive her car to work and use it throughout the workday. The employee decided to stop for frozen yogurt and a yoga class on her way home, and she struck and injured a motorcyclist.

Although an employer generally is not responsible for an employee’s actions when commuting to and from work, the court in the Moradi case held the employer was liable to the motorcyclist under the “required vehicle” exception to this general rule. Because the employer required the employee to drive her vehicle to work and her personal deviation for yoga and yogurt at the end of the workday was foreseeable, the employer could be legally responsible for the accident.

Of course, the Moradi case does not mean an employer is always responsible when an employee is involved in an accident. In a recent Ninth Circuit Court of Appeals decision, Halliburton Energy Services, Inc. v. Department of Transportation, an employer was not liable to third parties when its employee got in an accident in a company vehicle while on a personal trip more than 100 miles from home. In that case, the court determined that the employee’s personal use of the vehicle was not foreseeable.

Employer Guidelines

To meet its travel pay obligations, an employer must pay for time traveling throughout the workday, as well as related expenses. The DLSE permits employers to pay a lower wage for travel time, as long as the wage does not drop below minimum wage and employees have adequate notice of the reduced rate.

If traveling employees earn at or near the minimum wage, employers must also pay those employees the “split shift” premium in appropriate circumstances. Alternatively, employers should schedule various assignments close together during the workday, so that it does not incur split shift liability.

Finally, employers must adequately compensate employees for their travel expenses and should ensure they are prepared to address liability for employee accidents. Employers may require employees to maintain adequate insurance coverage as a condition of employment, and should also understand the extent of their own insurance coverage for employee accidents and injuries.