From JDSupra, Rachel Reingold Mandel and Andrea Sullivan discuss new challenges for employers with respect whether travel to and from the office for remote workers is an expense that must be reimbursed. Rachel and Andrea write:
For many employers in Massachusetts, remote work has become part of the new normal, with nearly a quarter of employees in the state having worked remotely in 2021, according to one recent media report. While such arrangements can be convenient and even allow for cost savings, they present novel challenges for employers, including whether and how to reimburse employees (including nonexempt and exempt employees) for various travel-related expenses. For example, when an employer asks a remote worker to travel to the worker’s former office for an occasional in-person meeting, must the employer reimburse the remote worker for the travel expenses incurred while traveling to and from the office?
While there are no Massachusetts laws, regulations, or cases that currently address this precise issue—the reimbursement of travel expenses for remote workers required to travel to their offices on occasion—the current Massachusetts minimum wage regulations, as well as federal guidance, provide some helpful (although not definitive) direction.
Massachusetts Minimum Wage Regulations
Under the Massachusetts minimum wage regulations, an employer is required to reimburse employee travel expenses when (1) “an employee who regularly works at a fixed location is required to report to a location other than his or her regular work site” (454 CMR 27.04(4)(b)) and (2) “an employee is required or directed to travel from one place to another after the beginning of or before the close of the workday” (454 CMR 27.04(4)(d)). (In each of these scenarios, the Massachusetts employer is also required to reimburse the employee for the time associated with the travel.) These regulations, however, have not been updated or modified since the start of the pandemic and the proliferation of remote working situations, and they do not appear to contemplate work-from-home arrangements.
In December 2020, the U.S. Department of Labor (DOL) issued guidance in the form of an opinion letter regarding whether employers are required to compensate employees for travel time and expenses when they leave work early or come in late for personal reasons. The DOL indicated in Opinion Letter FLSA 2020-19 that travel time and expenses are not compensable under the Fair Labor Standards Act (FLSA) when employees schedule personal appointments during the workday.
The DOL stated that “[w]hen an employee arranges for her workday to be divided into a block worked at home and a block worked at the office, separated by a block reserved for the employee to use for her own purposes, the reserved time is not compensable, even if the employee uses some of that time to travel between home and the office.”
Although not directly on point, the opinion letter also noted several cases in which courts found that travel time was compensable when an employee was required to work immediately before commuting or immediately after commuting to or from a work site. While the DOL’s opinion letter made clear that the agency was not addressing a scenario similar to one of the letter’s cited cases (in which a court found an employee’s daily required administrative tasks immediately before commuting from home to a job site were integral and indispensable to the employee’s job), the opinion letter suggested that when travel is required by the employer as a principal work activity, employers may be required to reimburse their employees for the travel expenses.
Taken together, the Massachusetts minimum wage regulations and the DOL’s guidance suggest that when a remote employee leaves his or her home for personal reasons, the time and expenses incurred in that travel are probably not reimbursable. However, when a remote employee is asked or required to leave his or her home office for work purposes (e.g., training at the main office), it is possible that in that scenario the legislature or courts could find such travel expenses to be reimbursable.
In addition, at least one court in Massachusetts has held that a failure to pay travel expenses and mileage is a violation of the Massachusetts Wage Act. The U.S. District Court for the District of Massachusetts stated in Furtado v. Republic Parking System, LLC, that “[t]ravel expenses are effectively business expenses in that they represent the cost of doing business in multiple locations and there is no reason to suggest that the Wage Act would allow an employer to circumvent [its] duties” by shifting those costs to its employees.
Massachusetts employers may want to tread cautiously until further guidance is issued. In the absence of clear direction from the Massachusetts Legislature or the courts, where an employee’s only assigned work location is a home office (even if formerly assigned to a different work location), it appears that one approach may be to reimburse travel expenses for fully remote employees coming to the office on occasion as needed.