How Am I Supposed to Handle Compensation for Travel Time?
Question: We pay a flat daily amount of $15 to our techs which we call a “travel fee.” Should this payment be considered part of a tech’s compensation, and if so, should the payment be counted when the tech works overtime? If the tech is an independent contractor, getting a 1099, do overtime rules apply? What are the requirements to be classified as an independent contractor?
Answer: Hourly employees must be paid at least minimum wage for all hours they are in the service of the employer, and that includes time spent in going from one assignment to another. Travel time during a normal work day is almost always compensable, and such exceptions as there are concern travel that occurs outside of a normal workday. The $15 daily payment is in fact part of a tech’s compensation (assuming it’s not in direct reimbursement for travel expenses incurred) and does need to be counted in determining a revised straight-time hourly rate in weeks where overtime is worked. When employees receive enhancements to their pay other than purely discretionary bonuses, the money earned in a week is divided by all the hours worked in that week to reach a new “regular rate.” That new “regular rate” is then multiplied by time-and-a-half (i.e., 1.5X) to reach an overtime rate for the hours worked over 40.
With regard to the 1099 part of the question, it is highly unlikely that a tech for an HVAC employer would ever be properly deemed an independent contractor for the simple reason that HVAC employers employ techs to carry out HVAC tasks—techs are integral to an HVAC business. Merely dubbing a worker an independent contractor won’t make it so. Much could be said about the criteria for independent contractor status but in a nutshell an independent contractor performs duties that are not integral to the employer’s business, is not dependent on the employer alone or primarily for revenue and in fact can perform work for competitors, and further that the independent contractor is in business for himself or herself and has an opportunity for profit and loss. An example would be an outside IT consultant who is brought in to install a new software system and provide help desk assistance. All this having been said, assuming the independent contractor tech in the question is in fact an employee, then naturally all the usual minimum wage and overtime rules apply.
This response is intended for general informational purposes only and should not be construed as legal advice or a legal opinion, nor is this column a substitute for formal legal assistance. For help with particular legal needs, members are invited to consult with ACCA’s LegalTools Counsel, Brooke Duncan III of Adams and Reese LLP. Mr. Duncan can be reached at 504-585-0220 or by email at email@example.com.
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