Q&A: Exempt Employees and Travel Compensation

From: Benefits

Q&A: Exempt Employees and Travel Compensation


Do we have to pay an exempt employee additional compensation to travel on weekends?


Federal and state laws exempt certain employees from wage and hour requirements, such as overtime pay. An “exemption” means that the overtime law does not apply to a particular classification of employees. Properly classified exempt employees are paid a fixed amount each pay period, generally based upon an annual salary, regardless of hours worked each week. Therefore, you are not obligated to pay an exempt employee for additional hours worked in excess of 8 hours daily, or 40 hours each week, or performed on a weekend. You must reimburse employees for all monies that they necessarily expend or lose, directly related to performing their duties or following your directions. Common examples include mileage, travel, and dining expenses. In extreme cases, reimbursement also includes compensating employees sued by third parties for conduct within the scope of employment. An employer may provide an exempt employee with additional compensation, such as overtime, without losing the exempt status or violating the salary basis requirement, if the employment arrangement also includes a guarantee of at least the minimum weekly required amount paid on a salary basis. Such additional compensation may be paid on any basis (e.g., flat sum, bonus payment, straight-time hourly amount, time and one-half, or any other basis), and may include paid time off. For more information: www.dol.gov/whd/regs/compliance/fairpay/presentation.ppt.