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A client had a question about whether they are required by law to pay certain employees overtime if they perform additional work-related activities on a weekend. The answer has been provided by an outside human resource and benefits expert.
Do we have to pay an exempt employee additional compensation to travel on weekends?
Federal and state laws exempt certain employees from wage and hour requirements, such as overtime pay. An "exemption" means that the overtime law does not apply to a particular classification of employees. Properly classified exempt employees are paid a fixed amount each pay period, generally based upon an annual salary, regardless of hours worked each week. Therefore, you are not obligated to pay an exempt employee for additional hours worked in excess of 8 hours daily, or 40 hours each week, or performed on a weekend.
You must reimburse employees for all monies that they necessarily expend or lose, directly related to performing their duties or following your directions. Common examples of business travel related expenditures include mileage, accommodations and dining expenses. In extreme cases, reimbursement also includes compensating employees sued by third parties for conduct within the scope of employment.
An employer may provide an exempt employee with additional compensation, such as overtime, without losing the exempt status or violating the salary basis requirement, if the employment arrangement also includes a guarantee of at least the minimum weekly required amount paid on a salary basis. Such additional compensation may be paid on any basis (e.g., flat sum, bonus payment, straight-time hourly amount, time and one-half, or any other basis), and may include paid time off.
When an employee is traveling for a business purpose, a clear and well-written travel and expenditure policy can help avoid potential issues relating to reimbursement for transportation, company credit card usage, meal and entertainment and any other business related charges. If your business doesn't have a documented Business Travel Expense Policy, you can download a sample policy for free. This Sample Business Travel Expense Policy includes examples of reimbursable expenses, guidelines for use of company-issued credit cards and details on meals and business entertainment expenditures.