Employees Traveling Overnight - Should I Pay them for Sleep?

Posted on October 28, 2009 by Kevin M. Doherty, Esq.

In a recent blog, we addressed the confusion over paying non-exempt employees for work-related travel during the day, particularly as part of commuting. This blog covers what happens when a non-exempt employee has to take an overnight trip on behalf of an employer.

In cases where overnight travel is involved, under a DOL regulation, the employee’s travel time generally only has to be compensated when the hours of travel overlap the hours of the day that an employee normally works: However, the employee has to be paid for this travel time even if the travel takes place on a day that an employee does not normally work. Not only is this rule confusing, but there are exceptions to it – and exceptions to the exceptions. 

Let’s try an example: Employee Michelle is a non-exempt employee who normally works 9 am to 5 pm for XYZ Company (“XYZ”) in New York. She is going to attend a convention in Las Vegas on XYZ’s behalf. She leaves work at 4 pm EST on Thursday and arrives back at home at 3 pm EST on Sunday. Her flight arrives in Las Vegas at 9 pm EST. It takes Michelle a half an hour to get her bags and another half-hour to take a cab to her hotel, whereupon she checks in and spends the next 8 hours playing craps at the casino. What would be considered compensable time?  

Well, first Michelle needs to be compensated for her normal working hours, including time on the weekend. As a result, she must be paid for 8 hours (her normal working schedule) Thursday, Friday and Saturday. On Sunday, she must be compensated for 6 hours, or the 9am to 3pm.

In addition, if Michelle pulls out the laptop and starts doing company work on the plane after 5pm EST, that time becomes compensable as well (if she just watches the movie or does cross-word puzzles all the way to Vegas she doesn’t have to be paid for that time). Once Michelle hits McCarran International in Las Vegas, she’s back on company time, until she gets in the cab (unless she pulls out the iPhone® to check her company e-mail in the cab). Michelle’s gambling time is definitely her own – unless she is taking a key company client to the craps table with her. By the way, if Michelle has to carry “heavy, burdensome equipment, as contrasted with light hand tools” with her to set up the company’s convention booth, all the time Michelle spends lugging stuff around becomes compensable. 

The important lesson to take away from this example is simple.  If business travel is routinely required of your non-exempt employees, make sure that you instruct them to keep careful track of all of their time during their day and overnight trips. Also make sure that company travel policies reflect federal and state law, and are clear to employees. When in doubt, try to be rational and fair in compensating travel time, and/or call your employment counsel when the expense reports land on your desk.

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Is that really an Intern?

Posted on October 21, 2009 by Devora L. Lindeman, Esq.

Many industries make unpaid internships the gateway to an entry-level position. Unfortunately, as with many things in the employment law arena, what seems like a good idea may just be something that gets your company in trouble with the local Department of Labor. Internships are one of these problematic arrangements under the Fair Labor Standards Act (“FLSA”).

In order for people participating in an internship or trainee program to qualify as something other than the company’s employees who need to be paid, the program must satisfy ALL of the following criteria:

  1. The training, even though it includes actual operation of the employer’s facilities, is similar to that which would be given in a vocational school;
  2. The training is for the benefit of the trainees or students, not the company;
  3. The trainees or students do not displace regular employees, but work under close supervision;
  4. The employer that provides the training receives no immediate advantage from the activities of the trainees or students and, on occasion, his or her operations may even be impeded;
  5. The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and
  6. The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.

A relatively safe way to set up an internship program is to partner with a local college or high school. If the student is getting school credit for the program, if the employer has to submit progress reports to the educational institution, and if there are sufficient educational components in the program (e.g., seminars and field trips, mentoring sessions with people in different departments, etc.), it is more likely that the program will pass muster . . . as long as all the above components are satisfied. 

Remember that an employer only needs to pay employees at minimum wage (currently $7.25/hour under the FLSA, which comes out to about $13,000.00/year), and to pay overtime wages if the employee works over 40 hours in one workweek (which the company can control). At that rate, it might be worth the investment to have paid “interns” and the associated ability to give them real work assignments that assist the company and its productivity, while providing peace of mind should the DOL come to call. Companies can still hire a paid intern for the summer, or a semester, and do not need to guarantee a job at the end of the internship period.  Doing this may well be preferable to putting the company at risk of incurring DOL penalties and fines—plus, the employer gets to see how the intern functions under real working conditions. 

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