California law requires that employers pay employees for all hours worked. The term “hours worked,” however, is not all that simple to define or apply. The analysis is compounded when the hours worked are, for instance, part of the employee’s commute, consist of travel to a remote conference, or spent moving from client to client throughout the day. Once you conclude the time is “worked,” you must include those numbers in overtime calculations, and decide whether you want to pay travel at a different rate than the employee’s regular rate of pay.
California Wage Orders (issued by the California Industrial Welfare Commission [the “IWC”]), define “hours worked” as “time during which an employee is subject to control of the employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so.” IWC Wage Order 4, Section 2K. Although the term “suffered or permitted” is included within the Order’s overall discussion of employer control, California courts have held that the tests for whether an employee was “controlled” or “suffered or permitted” to work can also be independent of each other. In other words, an employer is required to compensate for travel if the time falls into either or both categories. Morillion v. Royal Packing Co., 22 Cal. 4th 575, 583(2000).
An employee is “controlled” by the employer whenever the employer “directs, commands or restrains” an employee. Bono Enterprises, Inc. v. Bradshaw (1995) 32 Cal. App. 4th 968, 975. “Suffered or permitted” to work refers to time worked where the employer knows the employee is working and does nothing to stop it, or when the employer possesses information from which such knowledge can be inferred, and that the employer “had reason to know” that the employee was performing work on its behalf.
Merriam-Webster defines the term “commute” as “to travel some distance between one’s home and place of work on a regular basis.” (http://www.merriam-webster.com/dictionary/commute). Whether commute time is compensable in part or whole depends on the mode and purpose of employer provided transportation, and whether use is mandated or voluntary. In other words, is the employer in control?
Off-the-Clock work is work performed outside of regular business hours, or pre- or post-shift work may be compensable. For instance, in terms of travel time, certain tasks have been found to be compensable:
If an employee is required to attend an offsite conference or meeting, the time spent traveling to and from the meeting is compensable. Additionally, time spent in reaching the point of departure (i.e., travel from home to the airport) which is over and above the time spent in the employee’s regular commute is compensable. Also note that the time spent in attending a mandatory conference or meeting is compensable at the employee’s regular rate of pay.
Once an employee reports to work, any work related travel occurring during the day is compensable.
Yes, so long as all time is compensated at a rate equal to or higher than the minimum wage rate for California. Also, the employee must be informed of the lower rate in advance of the assigned travel. Be sure and check your location for its own minimum wage rate.
The employer must use a “weighted average” to obtain a regular rate of pay for overtime purposes. The California employer must pay 1-1/2 or 2 times the regular rate of pay for all time worked over 8 hours in a day or 40 hours in a week. The regular rate is calculated as follows:
Regular Hours + Travel Hours in Workweek
Total Compensation for Workweek
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