Pitfalls When Commuting to Out-of-Town Work

The Seventh Circuit Court of Appeals - the biggest court in the federal system for IL, IN, WI - has just approved of the US Dept of Labor standard regulating pay practices for employees on remote assignment who travel during normal working hours. Walters v Professional Labor Group LLC., No. 23-3346 (decided October 20, 2024). The case reminds employers that although normal commuting time is not work time, situations can arise where such travel is subject to the obligation to calculate and compensate both straight time and overtime.

In this case the employer PLG supplied skilled tradesmen to construction contractors and other clients for temp assignments.? These PLG employees were unable to return home each workday, and stayed at the client's remote jobsite for the duration of the job (which could last several days, sometimes up to several weeks).? PLG offered per diem payments and reimbursement for mileage, but did not pay for the time spent traveling to and from jobsites, and it did not count their travel time as hours worked when calculating overtime pay due.

The appeals court bought the argument that commuting time can be non-compensable, but stressed that ordinary commuting means leaving and returning home on the same workday.? In the appeals briefing PLG brought up the Loper Bright case, in which the US Supreme Court held that courts have no duty to defer to administrative agency regulations where a statute is ambiguous. The Seventh Circuit did not bite, finding no ambiguity and reasoning that the regulations, at 29 CFR Sec 785.35 and .39, made sense. PLG urged that commuting out of town during the workday was an industry norm. But the court declined to rule that commuting between different jobsites included time periods straddling overnight stays, and declined to discuss whether it was appropriate to defer to the US DOL's regs on same day commuting vs commuting spanning more than one day.?

This opinion leaves open the scenario of travel that keeps an employee away from home overnight, but does not cut across the workday, e.g., departure at 5 pm to travel for three hours to the jobsite, stay overnight, and get on the road and return before 8 am the following day. Technically this might work, although employers would have to consider whether such a schedule would make the driver of the vehicle unfit - working to midnight on Day 1 and then jumping into a truck or other vehicle at 5 am.?

This is the potential "negligent retention" problem. The insufficiently rested driver has a serious accident and the employer gets sued by a third party. This would be a significant risk to avoid. ? ?