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Thread: Paying employees for drive time

  1. #11
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    Quote Originally Posted by kwired View Post
    Simple solution, full wage is the lower rate, nearly all duties except for drive time are "special duties"



    Loophole alert: sleep in the company vehicle and get paid for all hours of the night

    You need to figure in travel as well as other non direct production time as part of your overhead costs and set service rates or bid accordingly. If you have to fight over this with your employees they will leave you. Treat them well and they may make you more money out of respect and loyalty, treat them like pawns and they will only do what is necessary to keep their job - until they find one that looks better.
    Drive time, clean up time, potty breaks, mandatory breaks, material handling, mandatory safety meeting, coordination meetings, whinging calls from the office asking why the h**l you aren't done yet...all these contribute. One way or the other, you can't count on more than 5.5-6 hours per day of actual production outside the shop. Depending on the kind of work you do, labor frequently drives the cost bus. Get that wrong in the estimate too many times and it's Chapter 7.

  2. #12
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    Quote Originally Posted by Coppersmith View Post
    According to the IRS, employees need only be paid when they are working. Commuting to/from work is not working regardless if they are driving a company vehicle or their own. Commuting time does not have to be paid. Driving between jobs (the morning job and the afternoon job) is working time and must be paid. Driving home from the afternoon job is commuting. Note that if you require your employees to stop at the shop first thing in the morning, commuting ends there. And if they stop at the shop last thing before going home, commuting begins there.

    Now if you are asking employees to drive exceptionally long distances to a job site, an out of town job for example, some additional compensation may be required in order to not have them quit, (you're increasing their costs and thus lowering their compensation) but it is not legally required.

    Having a company vehicle is a bonus for employees and not a reason to give them additional compensation. Their costs are lowered by using your vehicle, and usually your gas.

    Companies should reimburse employees at the current IRS mileage rate if they use their own vehicle for company business:
    (1) any trips that are not commuting such as driving to a second job same day or fetching material from a vendor.
    (2) any trips where company tools or materials are carried including commuting.
    Comprehensive and accurate answer. I will note that there is some rumor that the IRS wants companies to include the portion of company vehicle cost in commuting be included as part of the employee's taxable wages, but I haven't seen that enforced.

    And as kwired wrote. A company can pay a lower rate for travel by making that the base rate and giving a premium for actual work time. One would just have to decide whether they are will to go to work for someone with those morals. I am also aware of many companies that don't properly pay their guys when they start at the shop to get a company truck. But if the someone reports them to the labor board they will regret that decision.


    I know what I don't know, and I know where to go to find it!

  3. #13
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    people who regularly report to work at the same site nearly every day don't have this sort of issue. Commute time to their usual work site does not need to be paid. Those that occasionally must go to a different site, maybe special training by third party, probably are not aware of rules and may not be paid and never know the difference, most probably get paid anyway though, including mileage if they take their own vehicle.

    It is those that go to different site quite frequently such as employees of contracting firms where owners have a tendency to want to cut costs as they see no production coming form such costs but see such costs on a nearly daily basis. You have to remember if you are such an owner that you can't get the work done if you can't get your employees to the work site. General rule make employees happy, they will cost you even more if you don't. Constantly having to hire new help because nobody likes to work for you and quits as soon as they are just starting to get the hang of things isn't usually cost effective either.

  4. #14
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    Quote Originally Posted by kwired View Post
    people who regularly report to work at the same site nearly every day don't have this sort of issue. Commute time to their usual work site does not need to be paid. Those that occasionally must go to a different site, maybe special training by third party, probably are not aware of rules and may not be paid and never know the difference, most probably get paid anyway though, including mileage if they take their own vehicle.

    It is those that go to different site quite frequently such as employees of contracting firms where owners have a tendency to want to cut costs as they see no production coming form such costs but see such costs on a nearly daily basis. You have to remember if you are such an owner that you can't get the work done if you can't get your employees to the work site. General rule make employees happy, they will cost you even more if you don't. Constantly having to hire new help because nobody likes to work for you and quits as soon as they are just starting to get the hang of things isn't usually cost effective either.
    I don't know of many companies that do not pay for time spent driving on company business during a work day. Many do not pay for the time driving if the employee spends the whole day there and leaves from home and returns home from the remote site, especially if it is a reasonable amount of time. That is just a normal commute.

    Work (and pay) normally starts when you get to work (or maybe to your workstation), where ever that is. Most employers are pretty good about giving some dispensation for employees who have to commute long distances for the convenience of the company. If the employee chooses to live 100 miles from work, that is on the employee though.
    Bob

  5. #15
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    Quote Originally Posted by petersonra View Post
    I don't know of many companies that do not pay for time spent driving on company business during a work day. Many do not pay for such time if the employee spends the whole day there and leaves from home and returns home from the remote site, especially if it is a reasonable amount of time. That is just a normal commute.

    Work (and pay) normally starts when you get to work (or maybe to your workstation), where ever that is. Most employers are pretty good about giving some dispensation for employees who have to commute long distances for the convenience of the company. If the employee chooses to live 100 miles from work, that is on the employee though.
    This is where it gets more complex with employees of contractors or others that go to different work sites on a regular basis. If you always report to main shop/office before going to site for the day, the rules are less confusing, if you report directly to wherever work site is that day it gets more complex.

    Again, if you have to fight with employees over this, you probably are not being reasonable enough with whatever you are doing.

    If you are sending them over 100 miles, for a multi-day job you possibly are providing other expenses anyway, to even consider sending them on a job that far away you better have those costs figured into what you charge the customer or you are going to lose money fast if you continue to take such jobs.

  6. #16
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    This happened to me years ago. Here in the Los Angeles area it could take you two hours to drive 30 miles. When my boss proposed it, his argument was "you're not doing anything for those two hours". Our argument was "we don't get to pick the jobs". Now I know he shouldn't have been doing it, but we never complained that Saturday was a regular day and we got paid regular hours. After the change to travel time, we told him that Saturdays were now time and a half.
    I can build anything you want if you draw a picture of it on the back of a big enough check.

    There's no substitute for hard work....but that doesn't mean I'm going to give up trying to find one.

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  7. #17
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    Quote Originally Posted by kwired View Post
    This is where it gets more complex with employees of contractors or others that go to different work sites on a regular basis. If you always report to main shop/office before going to site for the day, the rules are less confusing, if you report directly to wherever work site is that day it gets more complex.
    It is not complex at all. You get paid based on when you show up at your work site and when you leave. If you are a construction worker the construction site is your work site. And mostly your pay starts when you get to where you are actually working. I have been at some job sites where it is a 15 or 20 minutes walk from where you park to where you work and generally your pay does not start in the parking lot.

    Where there is some complexity is when that site is a long commute away and an employer wants employees to spend 3 or 4 hours a day driving for no consideration. It's perfectly legal, in general, but a terrible thing to do to your employees.
    Bob

  8. #18
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    Quote Originally Posted by petersonra View Post
    It is not complex at all. You get paid based on when you show up at your work site and when you leave. If you are a construction worker the construction site is your work site. And mostly your pay starts when you get to where you are actually working. I have been at some job sites where it is a 15 or 20 minutes walk from where you park to where you work and generally your pay does not start in the parking lot.

    Where there is some complexity is when that site is a long commute away and an employer wants employees to spend 3 or 4 hours a day driving for no consideration. It's perfectly legal, in general, but a terrible thing to do to your employees.
    Actually there are other factors, if you go to the shop and pick up a truck, you are on the clock from that time until you return to the shop. If you drive a truck and take it home, because you are on call, you are at work the moment you start the truck. If you drive your own car to the job site, that's a different matter.
    I can build anything you want if you draw a picture of it on the back of a big enough check.

    There's no substitute for hard work....but that doesn't mean I'm going to give up trying to find one.

    John Childress
    Electrical Inspector
    IAEI / CEI / C10
    Certified Electrical Inspector

  9. #19
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    Quote Originally Posted by petersonra View Post
    It is not complex at all. You get paid based on when you show up at your work site and when you leave. If you are a construction worker the construction site is your work site. And mostly your pay starts when you get to where you are actually working. I have been at some job sites where it is a 15 or 20 minutes walk from where you park to where you work and generally your pay does not start in the parking lot.

    Where there is some complexity is when that site is a long commute away and an employer wants employees to spend 3 or 4 hours a day driving for no consideration. It's perfectly legal, in general, but a terrible thing to do to your employees.
    When I was working jobs out of town, anything under an hour was a commute, and not paid for. Anything over an hour, we got per diem, paid hotel room, and generally stayed out of town until the job was done. Driving time was paid at standard hourly rate for the driver and any passengers to and from the out of area job, and hourly paid for any driving time done for picking up supplies and what not. The only thing not covered by the employer was if we elected to come home for the weekend. If that was a 3 hour drive one way, we ate it as a commute.

    I was paid hourly, gas and mileage for using my own vehicle, until the time when I wasnt, then I left - I wasnt driving to Leesville, LA from VA for gas money only; that's a 22 hour trip that takes 2 days, overnight hotel stay, etc. 2 guys, 80 hours, over 2500 miles round trip, and they wanted to pay just $500 for gas!
    Electricians do it until it Hertz!

  10. #20
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    Quote Originally Posted by petersonra View Post
    It is not complex at all. You get paid based on when you show up at your work site and when you leave. If you are a construction worker the construction site is your work site. And mostly your pay starts when you get to where you are actually working. I have been at some job sites where it is a 15 or 20 minutes walk from where you park to where you work and generally your pay does not start in the parking lot.

    Where there is some complexity is when that site is a long commute away and an employer wants employees to spend 3 or 4 hours a day driving for no consideration. It's perfectly legal, in general, but a terrible thing to do to your employees.
    I agree with the cowboy.

    Quote Originally Posted by cowboyjwc View Post
    Actually there are other factors, if you go to the shop and pick up a truck, you are on the clock from that time until you return to the shop. If you drive a truck and take it home, because you are on call, you are at work the moment you start the truck. If you drive your own car to the job site, that's a different matter.
    I don't know all of what is legal and what is not - as a general rule not just for construction workers or similar.

    OTR truck drivers - they get paid by the mile, and most of the time are not paid when driving with no load. What happened to my father when he was driving - switching to a larger trucking company meant if another driver was closer to a pick up they got priority. So he sat there waiting for next dispatch call more often then when he drove for a smaller company. Not being paid because not driving (loaded or not is sitting there). Might be hundreds of miles from home - so there you are sitting with nothing to do for the most part.

    I can apply some similarities to construction worker, put them in a situation where you basically require them to be somewhere, even if it is just sitting in a vehicle, yet don't pay them is somewhat unfair whether legal or not. They aren't exactly on their own time, yet they have little or no choice of what to do either.

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