Advert icon
← Back to blog

What to know about time off in lieu for business travel

27 May 2021

Brought to you by TravelPerk, the #1 business travel platform.

What to know about time off in lieu for business travel

Some of your employees will be used to traveling for work and all that business travel entails. They probably also know your travel and expense policy like the back of their hand. 

However, many of these employees may sometimes work longer and more unusual hours than the hours stipulated in their contract for a business purpose. While this is often accepted as ‘part of the job’, you also need to make sure that you remain compliant. 

Any unspoken agreements regarding working time and time off in lieu for business travel should be well documented in your corporate travel policy — and if your employees haven’t yet asked about their rights regarding time off in lieu for business travel, you’ll need to be prepared with an answer. 

Here, we go through what you need to know about your responsibilities, and what employees can expect with regard to time off in lieu for business travel. 

ebook download button travel management guide

What are the rules regarding travel time?

In order to create effective travel management policies, and to decide whether employees can be given time off in lieu for business travel, we first need to define the different kinds of travel time. 

Generally speaking, there are three types of employee travel time: 

Home to work travel

Home to work travel is the time employees spend commuting to and from work. Since this is considered personal time rather than business time, the IRS does not allow businesses to deduct it as an expense, and so employees should not be paid for this time. 

One-day travel to another city 

If an employee is sent to another city for business-related work, The Department of Labor (DOL) states that businesses may deduct the time the employee spends commuting, since it is out of the bounds of their regular commute. 

Travel away from home 

Basically, when an employee travels for work, and this includes an overnight stay, it is considered travel time. However, the Department of Labor states that any travel that takes place outside of the employee’s normal working hours specified in their employment contract is not counted as time worked, and is not subject to overtime pay. 

How should I handle time off in lieu for business travel requests?

In many countries, employers are not obliged to pay their employees for overtime hours. However, when employees are traveling for business, it’s considered good practice to offer employees time in lieu compensation for the extra hours they’ve worked. 

You’ll need to keep your country-specific laws in mind when creating a time off in lieu policy, and if you’re in the United States, your state’s regulations governing paying employees for travel. Companies will also need to ensure they are complying with the rules laid out in the Fair Labor Standards Act (FLSA), including restrictions on hours of work per workweek, rate of pay for overtime, and other entitlements.

Managing time off in lieu requests can become a bit unwieldy, so firstly, it makes good sense to agree that any rules you put in place will have an automated policy and approval workflow to streamline the process.

Here’s what you’ll need to consider when creating a policy for time off in lieu for business travel:

  • How employees will record their overtime: Timesheets and time and attendance software are common choices for employers.
  • How you will calculate the time off in lieu: This is how you will decide how much time off to reward employees with. You could opt for a simple system whereby employees receive the same hourly rate for time off in lieu as the amount of overtime they worked. 
  • How to prevent employees exploiting time off in lieu policies: Time off work is an appealing concept, and some employees might purposely work overtime or indulge in more travelling time in order to bank up time in lieu. You must set clear parameters on the time in lieu policy. 

You should also include a disclaimer on exactly how much time off in lieu an employee can accumulate, when they can use their time off in lieu (maybe you want to set a limit on how much time off in lieu they can use in a one month period), and how long their time off in lieu hours are are valid for. 

Remember, a time off in lieu policy should not contradict an employee’s employment contract that should detail everything from hours worked in a typical work day, overtime pay, rules on travel expenses, and expectations for the employee’s travel schedule.

Did you find this article useful?

If you did, please follow us on our social media accounts on LinkedIn or Instagram. Please share the article with your friends or colleagues!

paper plane