How Should You Compensate Hourly Employees for Business Trips in California?

Understanding Payment Regulations for Hourly Employees on Business Trips

When paying hourly employees for business trips in California, it is essential to consider both state and federal labor laws. Employees must be compensated for all hours worked, including travel time, meal breaks, and other activities related to the business trip.

Travel Time Compensation

In California, travel time may be compensable depending on the situation. Here are the key points to consider:

Commute vs. Travel Time: The time spent commuting from home to the regular workplace is not compensable. However, travel time to a work site outside the regular workplace may be paid.
Work-Related Travel: If an employee is required to travel for work, this time is generally compensable. This includes:
Travel to and from the airport or train station.
Time spent waiting at the airport or during layovers.
Time spent traveling on a non-typical workday (e.g., weekends).

Meal and Rest Breaks

Employers must also account for meal and rest breaks during travel:

Meal Breaks: Employees are entitled to a 30-minute meal break if they work more than five hours. However, if the travel time is less than a normal workday, the employer may choose not to provide a meal break.
Rest Breaks: Employees are entitled to a 10-minute paid rest break for every four hours worked. If travel extends beyond typical work hours, ensure rest breaks are provided.

Overtime Considerations

Hourly employees may qualify for overtime pay under certain conditions:

Overtime Threshold: In California, overtime applies to hours worked over 8 in a day or 40 in a week. Travel time can contribute to total hours worked.
Calculating Overtime: If an employee’s travel time, combined with regular hours, exceeds these thresholds, they must be compensated accordingly.

Expense Reimbursement Policies

It is crucial to establish a clear policy for reimbursing expenses incurred during business trips. Consider including the following:

Transportation Costs: Reimburse for airfare, rental cars, or mileage if using a personal vehicle.
Lodging Expenses: Cover hotel stays, ensuring that the rates align with company policy.
Meal Allowances: Set a per diem rate for meals or reimburse actual costs with receipts.

Documentation and Record-Keeping

Maintaining thorough records is essential to ensure compliance with labor laws:

Time Sheets: Require employees to log all hours worked, including travel time.
Expense Reports: Implement a standardized expense report to capture all reimbursable costs, along with receipts.

State-Specific Considerations

California has unique regulations that may affect payment for travel. Employers should be aware of:

Wage Orders: Check applicable wage orders that may impose additional requirements for certain industries.
Local Ordinances: Be mindful of city or county laws that may affect travel compensation or expense reimbursement.

By adhering to these guidelines, businesses can ensure they are compliant with California’s labor laws while providing fair compensation to hourly employees traveling for work. Proper planning, clear policies, and diligent record-keeping are vital components of this process.

Best Practices for Compensating Hourly Employees on Business Trips in California

Jessica Lin (HR Compliance Specialist, California Labor Insights). “When compensating hourly employees for business trips in California, it is crucial to account for all hours worked, including travel time. California law mandates that travel time during regular working hours be paid at the employee’s regular rate, and if the travel extends beyond regular hours, overtime may apply.”

Michael Torres (Employment Law Attorney, Torres & Associates). “Employers should establish clear policies regarding travel compensation, including per diem allowances for meals and lodging. It is essential to communicate these policies to employees before the trip to ensure transparency and compliance with state regulations.”

Linda Garcia (Payroll Manager, West Coast Enterprises). “Utilizing a time-tracking system can help accurately record hours worked during travel. This not only ensures compliance with California labor laws but also simplifies the payroll process, making it easier to calculate any additional compensation, such as mileage reimbursement.”

Frequently Asked Questions (FAQs)

How should I calculate hourly pay for employees on a business trip in California?
Hourly pay for employees on a business trip in California should include their regular hourly wage for all hours worked, including travel time, as long as the travel occurs during regular working hours. If travel occurs outside of regular working hours, employers may choose to pay at the regular rate or a different agreed-upon rate.

Are employees entitled to overtime pay during business trips in California?
Yes, employees are entitled to overtime pay during business trips in California if they exceed 8 hours of work in a day or 40 hours in a week. Employers must track hours worked, including travel time, to ensure compliance with overtime regulations.

What expenses can be reimbursed for hourly employees on business trips?
Employers can reimburse hourly employees for reasonable and necessary expenses incurred during business trips, including transportation, lodging, meals, and incidentals. It is advisable to establish a clear expense policy to guide employees on what is reimbursable.

Is travel time considered work time for hourly employees in California?
Yes, travel time is generally considered work time for hourly employees if it occurs during regular working hours. If employees are required to travel outside of these hours, employers should clarify their policies regarding compensation for that time.

Do I need to provide meal allowances for employees on business trips?
While not legally required, many employers provide meal allowances or reimbursements for employees on business trips. This practice helps cover meal expenses incurred while traveling and should be outlined in the company’s travel policy.

What documentation should I keep for paying hourly employees during business trips?
Employers should maintain accurate records of hours worked, travel itineraries, receipts for reimbursable expenses, and any communications regarding travel policies. This documentation is essential for compliance with labor laws and for resolving any potential disputes.
In California, paying hourly employees for business trips involves understanding both state labor laws and the specific policies of your organization. Employers are required to compensate hourly employees for all hours worked, which includes travel time that is considered work-related. This means that if an employee is traveling during their regular working hours or performing work tasks while traveling, they must be paid for that time. Additionally, any time spent commuting to and from the business trip location outside of regular hours may not be compensated unless it meets certain criteria.

Employers should also be aware of the distinction between travel time and personal time. If an employee is traveling for business but is not engaged in work-related activities, such as attending meetings or making phone calls, that time may not be compensable. It is essential to clearly communicate your company’s travel policies to employees to avoid confusion and ensure compliance with labor laws.

Furthermore, reimbursement for expenses incurred during business travel, such as meals, lodging, and transportation, should be handled separately from hourly wages. Employers should establish a clear reimbursement policy that outlines what expenses are covered and the process for submitting claims. This helps maintain transparency and ensures that employees are fairly compensated for their out-of-pocket expenses while traveling for work.

Author Profile

Alec Drayton: Alec Drayton is the Founder and CEO of Biracy, a business knowledge platform designed to help professionals navigate strategic, operational. And financial challenges across all stages of growth. With more than 15 years of experience in business development, market strategy, and organizational management, Alec brings a grounded, global perspective to the world of business information.

In 2025, Alec launched his personal writing journey as an extension of that belief. Through Biracy, he began sharing not just what he’d learned. But how he’d learned it through hands-on experience, success and failure, collaboration, and continuous learning. His aim was simple: to create a space where people could access reliable. Experience-driven insights on the many facets of business from strategy and growth to management, operations, investment thinking, and beyond.