Do You Really Understand Travel Pay and the Implications on Company Operations?
There are four well-known sets of questions under which employee travel may be analyzed:
- Is an employee engaged in travel that is legally compensable?
- What is the pay rate?
- When can it change?
- What rules apply to determine when the workday starts and stops and where?
This article addresses a fifth and infrequently discussed question: What other workplace characteristics can affect liability for work-related activities engaged in by the traveling worker? In this context, a recent California Court of Appeal decision illuminates one of the hazards employers undertake by failing to compensate employees for employer-mandated travel time: Not only can an employer be held liable for unpaid wages, it also may be found liable for torts committed by its employees on their way to work.
California law does not require compensation for time spent commuting. But it does require an employer to consider the workday to have started when travel is more than a reasonable distance or when the modalities of travel effectively mean that the workday has started. Common examples are when an employee reports to an airport to travel, to a muster point, to a shop for transport to the nominal worksite, or other situations where, as a matter of law, the workday may be said to have begun.
Under these circumstances, several factors can affect the result: When is the workweek set—and has the employer set a specific day and time different than the default Sunday at 12 a.m.? Has the employer set a special rate for time spent traveling at the minimum wage or higher, but less than the employee’s normal rate of pay? Is there an employer policy that starts pay after a given amount of travel, as, for example, after an hour in the car?
All these possibilities must be resolved and published prior to the travel occurring, in order to be effective.
Beyond that, work governed by public works law in California usually contains specific published rules applicable to but varying by crafts and geographic location.
Evaluating Michael J. Sumrall et al. v. Modern Alloys, Inc.
In Michael J. Sumrall et al. v. Modern Alloys, Inc. (Cal. Ct. App. April 13, 2017), a construction company required one of its employees to commute to the company’s "yard" before driving coworkers and construction materials to the job site in a company truck. The company paid its employee for the hours he worked at the job site, but not for the time spent driving the company truck from the yard to the job site. While the employee was driving his own vehicle to the yard, he collided with a motorcycle. The motorcyclist sued the construction company. The trial court granted summary judgment to the company, ruling that the employee was commuting to work and therefore was not acting within the scope of his employment.
The appellate court reversed, finding a triable issue regarding whether the employee’s workplace was the yard or the job site. If it was the yard, then the employee was commuting to work and the employer had no liability. However, if the employee’s workplace was the job site, the employee was arguably on a business errand to the yard for the employer’s benefit. Because that errand would have begun once the employee left his home, the employer could be found liable for its employee’s tortious actions.
Ordinarily, under the "going and coming" rule, an employee going to or coming home from work is considered to be acting outside the scope of employment. But when an employee is performing a business errand for the employer, the employee is considered to be acting within the scope of his employment. The appellate court in Sumrall v. Modern Alloys stated that if the employer had actually paid the employee from the time he arrived at its yard, then arguably the employer would not be liable for the employee’s torts on the way there.
In general, an employer that requires its employees to use its vehicles to travel to a worksite must compensate them for their time spent traveling on those vehicles. For instance, In Morillion v. Royal Packing Co., 22 Cal. 4th 575 (Cal. 2000), the California Supreme Court held that fieldworkers who were required to take company buses to agricultural job sites should have been compensated for their time spent on the buses. Likewise, the California Court of Appeal in Armenta v. Osmose, Inc., 135 Cal.App.4th 314 (2005), held that utility workers should have been paid for time spent on required travel in the employer’s truck to remote job sites. Employees must be paid for the time they are subject to the control of their employer.
An employee is not necessarily considered under the employer’s control if the employee chooses to commute in the employer’s vehicle. In Novoa v. Charter Communications, LLC, 100 F.Supp.3d 1013 (E.D. Cal. 2015), an employee brought a class action alleging the employer should have paid for its employees’ commuting time in company vehicles. The district court, applying California law, held that employees need not be compensated for their commute time because they were allowed to decide whether they wanted to take the company vehicles home or leave them at the job site.
However, functional control is not the only test. Under the Federal Fair Labor Standards Act, control can be viewed as any situation for the benefit of the employer. So an unmonitored policy or practice in which a lead man or foreman gathers workers to "commute" together to meet job site goals can and has regularly led to claims of uncompensated "off the clock work." Sumrall v. Modern Alloys expands the risks by suggesting that if the travel time is deemed a business errand, the employer hazards being sued for torts its workers commit on their way to work.
What to Do Now
A thorough audit of the workday and revision of each element connected to pay is an essential.
AALRR attorneys apply their experience gained in defending such cases to help guide employers to minimize risk.