Paying for Commuting Time

A recent case in the state of Washington highlights the need for national employers to be mindful of overtime and minimum-wage requirements of the Fair Labor Standards Act (FLSA) and similar state statutes when structuring policies on employee use of company vehicles.

In Stevens v. Brink's Home Security, Inc., the Washington Supreme Court made the morning commute a little more of a headache for some employers. Interpreting the Washington Minimum Wage Act (WMWA), the court held that an employer must pay the commuting time of certain employees who drive to and from their residences in company trucks.

Commuting Time Under Washington's Minimum Wage Act

In Stevens, a home-security company gave its service technicians the option of driving to and from their homes in company trucks. Technicians were compensated for drive time between worksites, but generally not for time spent commuting between their homes and the first and last worksites of the day.

In deciding whether commuting time was compensable, the court analyzed the extent to which the employer restricted technicians' personal activities and controlled their time. Focusing on how the technicians were different from "ordinary commuters," the court highlighted a number of factors, including (a) amount of control imposed by the employer during the drive time, (b) the prohibition on using the trucks for personal business, (c) amount of company business being performed during the drive time, and (d) a requirement that technicians be available to assist at other worksites while driving to and from their homes. The court also determined the company's trucks were a "prescribed work place" under the WMWA.

In a 7-2 opinion, the Washington Supreme Court held that the employer was required to pay for commuting time because technicians were "on duty" on company "premises" or at a "prescribed work place" during the time they drove to and from their homes. The court further concluded that hours spent in travel were "hours worked" under the WMWA. The dissenting opinion stated the truck was not a work place because technicians did not actually work while commuting to the first customer's home. Nevertheless, the decision upheld a verdict awarding $1.4 million in back wages, interest, attorney fees and costs to a class of 69 technicians.

Commuting Time Under the Fair Labor Standards Act and the Employee Commuting Flexibility Act

Compensation requirements under federal law may not be as strict as those in Washington. Under the FLSA and its interpretive regulations, "[n]ormal travel from home to work is not worktime." There are many situations, however, where commuting time may be compensable. For example, if an employee is required to report to a worksite to receive instructions or perform other work, travel from the site where instructions are received to the workplace is compensable. Most federal courts have held that commuting time is not compensable where little or no work is performed.

Congress enacted in 1996 the Employee Commuting Flexibility Act (ECFA) in an effort to clarify the compensability of commuting time when company vehicles are used. ECFA clarified that commuting activities merely "incidental to" the use of a company vehicle are not considered part of the employee's "principal activities" and are therefore not compensable. ECFA's legislative history provides examples of activities that would be "incidental" and noncompensable, including (a) communication between an employee and employer to receive instructions, (b) communication to transmit advice on work progress, and (c) routine vehicle safety inspections.

While the contours of ECFA have not been clearly defined, one federal court in Texas recently interpreted ECFA to mean that transporting tools and submitting end-of-the-day reports from home were "incidental to" the use of a company vehicle for commuting, and therefore not compensable.

Practical Considerations

In light of differing standards throughout the country, national employers need to be exceedingly careful in structuring policies allowing or requiring employees to commute between their homes and the worksite in company vehicles. Each situation is different and requires a careful analysis of the facts and latest legal developments in this rapidly evolving area of the law. The Stevens decision should remind employers that the more restrictions they impose on use of a company vehicle during commuting time, the more probable it is that commuting time will be compensable.