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Don't Overpay Your Employee's Driving Company Vehicles Home

Often there is confusion as to when an employer must compensate employees for commuting in company vehicles. In Hernandez v. Pacific Bell Telephone Company, the California Court of Appeal ruled that employees must be paid for “hours worked”. The court ruled that “hours worked” is time during which the employee is: 1) subject to the employer’s control; or(2) time the employee is suffered or permitted to work, whether or not required to do so.

 Under the “control” test, if the employer requires the employee to take certain transportation to the work site then the employee is considered to be under the employer’s control and would constitute “hours worked”. If the transportation is voluntary or optional then the control testis not met and would not be considered “hours worked”.

 Regarding the “suffer or permit” test, this is met when the employee is engaged in certain tasks or exertion that a manager would recognize as work. The court ruled that employees were not expending effort when driving  a company vehicle to and from home, even though the company vehicle had tools and equipment, thus they were not suffered or permitted to work.

 In conclusion, employees must be compensated for commuting in company vehicles if the employees are: (1) taking certain transportation required by the employer; or (2) expending effort on tasks that a manager would recognize as work. Therefore, merely commuting in a company vehicle loaded with tools and equipment is not enough to qualify as “compensable time”.

Do you have questions about how to deal with this with your employees. Please feel free to click the link to schedule a call with our COO and talk through how to move forward.

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