Understanding Travel Time Compensation under the FLSA

The Seventh Circuit’s decision in Walters v. Professional Labor Group is a critical reminder of the protections afforded to employees under the FLSA.

One of the more complex and often misunderstood aspects of the Fair Labor Standards Act (FLSA) involves the compensability of employee travel time, particularly when travel keeps employees away from home overnight. A recent decision by the Seventh Circuit Court of Appeals in Walters v. Professional Labor Group, LLC, sheds important light on this issue.

The Walters Case: Background and Legal Issue

In Walters, the court examined whether employees who traveled to remote job sites for overnight stays were entitled to compensation for their travel time during normal working hours. Professional Labor Group (PLG), an Indiana-based staffing firm, employed skilled tradesmen such as electricians and millwrights. These employees frequently traveled to remote job sites where they remained for days or weeks at a time. PLG provided per diems and mileage reimbursements but did not pay employees for time spent traveling to or from these assignments, even when the travel occurred during their normal working hours.

James Walters, a former employee, worked for PLG as an hourly, nonexempt tradesman eligible for overtime under the FLSA. Walters and other employees claimed that travel during normal working hours to these remote job sites was compensable under 29 C.F.R. § 785.39. Walters’ regular work often involved extensive travel, which cut across what he and PLG’s clients identified as his normal workday hours. Walters argued that PLG’s failure to pay for this travel time violated the FLSA’s requirement to compensate employees for all hours worked, including travel away from home overnight.

The district court ruled in favor of Walters, granting summary judgment on the issue of liability. It concluded that federal law mandates employers to treat travel time during normal working hours as compensable work time when employees travel to overnight assignments. The Seventh Circuit affirmed this decision, providing valuable guidance on the applicability of 29 C.F.R. § 785.39.

Key Takeaways from the Decision

1. Overnight Travel vs. Ordinary Commuting
   Under 29 C.F.R. § 785.39, travel that keeps an employee away from home overnight is compensable if it occurs during normal working hours. This stands in contrast to ordinary commuting, which is explicitly excluded from compensable work time under 29 C.F.R. § 785.35. The court clarified that PLG employees’ travel did not constitute normal commuting because they did not return home at the end of each workday. Instead, their travel took them to distant job sites for extended stays.
2. Normal Working Hours Define Compensability
   A central issue in Walters was determining what constituted “normal working hours” for the employees. PLG argued that its employees had no normal working hours because their schedules varied by client and project. However, the court rejected this claim, noting that patterns in time records or average work hours can establish regular work hours even for employees with variable schedules.
3. Substituting Travel for Other Duties
   PLG argued that travel time was not compensable because employees were not substituting travel for other duties. The court disagreed, stating that the “substitution” language in § 785.39 serves as a rationale, not a strict prerequisite. The Court concluded, “Reading the regulation in its entirety, a straightforward rule emerges: When an employer requires its employee to travel away from home overnight and that travel “cuts across” his workday—meaning it occurs during his “normal working hours”—he is entitled to compensation. Even travel on nonworking days is compensable so long as it occurs during what would otherwise be considered the employee’s normal working hours.” The Court also held that the Portal-to-Portal Act does not apply to out-of-town, overnight travel scenarios.

Broader Implications for Employers and Employees

The Walters decision reinforces a core principle of the FLSA: employers must compensate employees for all hours worked, including certain types of travel. For employers in industries requiring significant travel, this case underscores the importance of tracking employee hours and understanding the nuances of FLSA regulations.

For employees, Walters serves as a reminder that time spent traveling during normal work hours to overnight assignments is compensable. If you believe your employer is not compensating you appropriately for travel time, you may have a claim under the FLSA.

Final Thoughts

The Seventh Circuit’s decision in Walters v. Professional Labor Group is a critical reminder of the protections afforded to employees under the FLSA. By holding that overnight travel during normal working hours is compensable, the court reaffirmed the importance of fair compensation in our labor laws.

If you are an employee with questions about the compensability of travel time, consulting with an experienced attorney can help clarify your obligations and rights under the FLSA.