Introduction
When employees drive company cars to off-site job locations, an important question arises: when does their shift officially begin? Does the workday start as soon as they begin driving, or only when they arrive at the job site? This distinction is crucial for both wage compliance and employer liability. Federal laws like the Employee Commuting Flexibility Act (ECFA) and the Fair Labor Standards Act (FLSA) provide guidance on whether travel time is compensable, but the answer depends on several factors discusses in this article.
Beyond compensation, businesses must also consider liability risks when employees operate company vehicles—particularly in the event of accidents, property damage, or insurance disputes. In this post, we will break down the legal and practical considerations surrounding company vehicles, travel time compensation, and employer liability, helping businesses and employees understand their rights and responsibilities.
Legal and Labor Law Considerations
Under FLSA, an employee’s travel time in a company vehicle is generally not compensable unless it meets specific conditions. ECFA clarifies that driving a company vehicle to a job site is not compensable if (1) an agreement exists between employer and employee about the vehicle’s use, (2) the job site is within the employee’s normal commuting area, and (3) the activities the employees perform before or after their commute are “incidental” to their use of the employer’s vehicle for commuting.
Additionally, if an employee is required to travel between job sites during the workday, that time is typically considered work time. While federal law provides the general framework, state laws and court rulings can further impact how travel time is treated, making it important to consider both legal standards and case-specific circumstances. Ultimately, an employer can choose to compensate for commute time beyond legal requirements, but once they establish a consistent practice or policy, it may become enforceable under state laws, implied contracts, or wage and hour regulations. Employers should ensure clear policies and documentation to avoid disputes and potential liabilities.
Precedent
The Supreme Court case IBP, Inc. v. Alvarez, 546 U.S. 21 (2005), established that activities integral and indispensable to principal activities are compensable. In Florida, this principle is nuanced by the “traveling employee” exception and the “going and coming” rule.
In Kelly Air Systems, LLC v. Kohlun, 159 So. 3d 102 (Fla. 5th DCA 2015), the court held that travel time is compensable when the employee is required to travel as part of their principal activity, such as driving a company car to an off-site job location. Conversely, in DSK Group, Inc. v. Hernandez, 202 So. 3d 956 (Fla. 3d DCA 2016), the court applied the “going and coming” rule, which generally excludes ordinary commuting time from compensable work hours.
Best Practices
Employers should establish clear, written policies regarding the use of company cars, travel time compensation, and liability to avoid disputes and legal exposure. Defining when an employee’s shift starts—whether upon departure from home or arrival at the job site—ensures compliance with FLSA, ECFA, and state labor laws. Additionally, employers should specify whether travel between job sites is compensable and outline any expectations for vehicle use, including restrictions on personal errands. Consistent enforcement of these policies helps prevent wage disputes, reduces accident-related risks, and protects both the company and its employees.
Conclusion
- Clearly Define When Travel Time is Compensable – Employers should establish policies that align with FLSA, ECFA, and Florida law, ensuring employees understand when their shift begins and whether travel time is paid.
- Mitigate Liability Risks for Company cars– Proper insurance coverage, vehicle use agreements, and safe driving policies help protect businesses from potential accidents, workers’ compensation claims, and legal disputes.
- Consistent Policy Enforcement Prevents Disputes – Employers who document and uniformly apply travel and vehicle policies reduce the risk of wage disputes, misclassification issues, and unintended liabilities related to employee travel.
Navigating employment and business law issues, including wage compliance, travel time policies, and employer liability, can be complex. Consulting an experienced attorney can help protect your business and ensure compliance with federal and state regulations. If you have questions about employee compensation, company policies, or legal risks affecting your business, our knowledgeable attorneys are here to assist. With an office in Miami, FL, call us at (786) 837-6787 or email us to schedule a consultation.
