Can Employers Pay Lower Rates for Drive Time?

FLSA Travel Time, Variable Pay, and Industry Risk in Florida

For businesses operating in construction, mobile services, and other industries where crews travel regularly, compensating for drive time presents both compliance risks and strategic decisions. The Fair Labor Standards Act (FLSA) does not prohibit an employer from paying different rates for different types of work, including travel. However, there are clear limits.

Recent opinion letters from the U.S. Department of Labor (DOL) clarify what constitutes compensable travel time and how to apply variable rates in a lawful manner. Florida employers should take note, especially if crews are crossing state lines, staying overnight, or moving between job sites during the day.

What Time Must Be Paid?

Under the FLSA, time spent performing work duties is compensable. That includes certain types of travel. The DOL has consistently interpreted "hours worked" to include travel that is part of the employee's principal activity. For example, driving from one job site to another during the workday must be paid. So, travel that occurs during regular work hours, even on weekends, is permitted if it is part of an overnight assignment. See 29 C.F.R. § 785.39.

By contrast, normal commuting time is not compensable, even if the employee is driving a company vehicle. The distinction turns on whether the employee is engaged in work duties or merely commuting for personal convenience.

Can the Employer Pay a Lower Rate for Travel Time?

Yes, but only if done correctly. The FLSA permits employers to pay different rates for various tasks, provided that all rates meet or exceed the federal minimum wage. The DOL confirmed this position in a 2018 opinion letter, stating that “an employer may pay an employee at different rates of pay for work at different times or various types of work as long as no rate is less than the statutory minimum wage.”  

However, employers must still calculate overtime based on the employee’s weighted average hourly rate across all hours worked in the workweek. A common mistake is to exclude travel time from the overtime calculation or to apply the lower drive-time rate to the entire week. That approach violates the FLSA.

Recent Legal Developments

Federal courts continue to apply these rules to fact-intensive disputes. In Walters v. Professional Labor Group, the Seventh Circuit reaffirmed that travel time crossing regular work hours—even for overnight assignments—must be counted as compensable time. While this decision is not binding in Florida, it highlights the potential exposure companies face if travel rules are not consistently applied or properly documented.

Risk Areas for Florida Employers

This issue is especially relevant in Florida industries that rely on mobile crews. Consider a North Florida-based home construction company whose workers leave Monday morning for Tennessee, stay overnight, and return Friday. If those crews are driving during typical work hours or transporting heavy equipment, that time is likely compensable under FLSA rules. Employers who pay a flat hourly rate for installation work but a lower rate for travel must still include all hours when calculating whether overtime thresholds are met.

Similarly, HVAC repair companies, mobile IT services, or construction contractors that dispatch workers to various job sites throughout the day must pay for the time spent driving between those locations. Even if the day begins at a warehouse or staging area, time spent transporting supplies may trigger compensation obligations.

Best Practices

Three practical guidelines Florida employers should internalize when determining travel time include:

First, classify travel types clearly and explain them in your handbook or onboarding process. For instance, "home to first job site" should be explicitly distinguished from "site-to-site" travel.

Second, document any use of variable pay rates in writing, and ensure your payroll system accurately calculates the blended regular rate for overtime purposes.

Third, regularly monitor and update your travel policies. Opinion letters and case law can significantly alter the landscape. Relying on old assumptions—such as paying a reduced rate and skipping overtime—can be costly.

Final Thoughts

Paying lower rates for drive time is not inherently unlawful. But if the travel time is compensable, it must be included in overtime calculations. Employers operating in construction, transportation, or mobile field services throughout Florida should carefully evaluate their policies. Missteps here can lead to DOL audits, back wage liability, and potential class or collective action litigation.

If your teams are crossing county or state lines, working variable schedules, or transporting materials as part of their assigned duties, you need to evaluate not just what you pay—but how and when you pay it.