Appeals Court Finds Non-Exempt Workers Must be Paid for All Required Out-of-Town Travel Time

The Washington State Department of Labor and Industries (L&I) has had a long-standing administrative policy requiring non-exempt employees be paid for all out-of-town business-related travel time. Under the policy, out-of-town travel time related to work must be paid if it met all three factors of “hours worked”: (1) an employee is authorized or required by the employer; (2) to be on duty; and (3) on the employer’s premises or at a prescribed workplace. See WAC 296-126-002(8).

L&I’s administrative policy was recently affirmed by Division Two of the Washington State Court of Appeals in Port of Tacoma v. Sacks. This case offers local governments clear guidance on what must be considered compensable hours when a non-exempt employee is traveling for a work-related purpose.

Port of Tacoma v. Sacks

The facts of the Port of Tacoma v. Sacks case are straightforward:

• New marine cargo cranes were purchased from China.
• The port sent several employees to China to observe the manufacture of the crane components that they would later repair. An employee was also sent to Houston, Texas for relevant training.
• The port paid the employees eight hours/day for travel, regardless of the actual time spent traveling. As a result, the employees were not paid for all the time they spent traveling, as travel took more than eight hours/day.
• The port employees filed wage claims with L&I seeking compensation for the unpaid travel time, claiming time spent at the airports and time spent in flight.
• L&I agreed with the employees and ordered the port to pay nearly $8,800 with interest.

The Port of Tacoma v. Sacks court accorded deference to L&I’s interpretation of “hours worked” as it relates to out-of-town travel and held that the state’s Minimum Wage Act (MWA) required the port to pay all travel time of non-exempt employees who traveled for out-of-town business. This is different from federal law, which generally only requires an employee be compensated for out-of-town travel time that takes place during their normal working hours. Federal law doesn’t require compensation be paid for time spent traveling to the airport or hotel since this is considered non-compensable commute time (see U.S. Department of Labor's Fact Sheet #22: Hours Worked Under the Fair Labor Standards Act).

In concluding that all out-of-town travel time must be paid, the Port of Tacoma v. Sacks court distinguished non-compensable daily commute travel with compensable out-of-town travel. The court also accorded deference to L&I’s interpretation of its own regulations, noting that their interpretation is “in line with Washington’s ‘long and proud history of being a pioneer in the protection of employee rights.’” Finally, the court found all three factors of “hours worked” were met in this case.

Factor One: The employee is authorized or required by the employer

The parties (Port of Tacoma, employees) did not contest that the disputed hours were authorized or required.

Factor Two: The employee must be on duty

The Port of Tacoma v. Sacks court held the employees were on duty, which the court defined as being “engaged in an assigned task — the travel — at the behest of their employer, in order to effectuate their assigned duty to inspect the crane manufacturing process.”

Factor Three: The employee must be on the employer’s premises or at a prescribed workplace

Noting that “prescribed” means “dictated or directed,” the Port of Tacoma v. Sacks court held that “the Port approved the means of travel and purchased the plane tickets, thereby dictating, i.e., prescribing the workplace.”

Conclusion

The takeaway for Washington local governments is this: In determining what to pay employees who travel out of town for business, Washington local government employers can no longer apply the less protective standard in the federal Fair Labor Standards Act (FLSA) and instead must apply the more robust standard in the state Minimum Wage Act. This more robust MWA standard requires non-exempt employees be paid for all time spent traveling, both within working hours and outside of normal working hours, regardless of whether the employee is working during that travel time.