Staffing Employer Liable for Employee Travel Time for Overnight Trips

Takeaway: A company staffing skilled trades workers at jobsites could not evade liability for overtime under the Fair Labor Standards Act by claiming that its employees’ long-distance work only started once they arrived at each jobsite.

The 7th U.S. Circuit Court of Appeals upheld a district court’s summary judgment decision that a staffing company was liable for overtime for employees’ long-distance trips during normal work hours.

Professional Labor Group LLC (PLG), an Indiana-based staffing firm, recruited and employed individuals skilled in various trade classifications, including electricians and millwrights. PLG matched its employees with temporary work at client jobsites. Employees traveled to the remote sites, where they stayed and worked for days or weeks before returning home or moving on to the next job. PLG did not compensate its employees for the time they spent traveling to and from assignments during their normal work hours. 

PLG served its clients—mostly construction and industrial contractors—by supplementing their existing workforces with skilled labor. When a client needed assistance on a project, it placed a request with PLG for employees qualified in a particular trade. PLG then identified appropriate candidates and assigned them to the jobsite.

The assignments were not local. Rather, a job usually required PLG employees to drive to a client’s remote site, where they remained for the duration of the project. Projects lasted anywhere from a few days to several weeks. PLG normally provided employees with per diems and mileage reimbursements consistent with IRS regulations. But the organization did not otherwise compensate the workers for their travel time, nor did it count their travel time as hours worked.

The plaintiff was a skilled tradesman at PLG who regularly traveled to and from remote jobsites. He often did so during what he considered to be his normal workday and during what clients would later designate as his normal work hours. He sued PLG on behalf of himself and similarly situated employees. He claimed that their travel time was compensable under 29 Code of Federal Regulations (CFR) Section 785.39 and should have counted as hours worked toward overtime.

PLG moved for summary judgment, which the district court denied. The plaintiffs then moved for summary judgment on the issue of PLG’s liability. The district court granted this motion. It concluded that federal law requires the organization to treat employee travel to overnight work assignments as compensable work time when it occurs during normal work hours. Rather than proceed to a bench trial on the issue, the parties stipulated to damages. PLG reserved the right to appeal the district court’s summary judgment order and appealed to the 7th Circuit.

On appeal, the 7th Circuit considered whether federal law requires PLG to compensate its employees for time spent traveling to remote client jobsites during normal work hours. It noted that 29 CFR Section 785.39 states that when an employer requires its employee to travel away from home overnight, and when that travel occurs during normal work hours, the employee is entitled to compensation. Even travel on nonworking days is compensable so long as it occurs during what would otherwise be considered the employee’s normal work hours.

PLG argued that its employees’ travel did not cut across their workdays because their workdays did not begin until they arrived at each jobsite. PLG invoked the Portal-to-Portal Act to support this contention. Specifically, it relied on the Portal-to-Portal Act’s definition of “workday” as “the period between the commencement and completion of the same workday of an employee’s principal activity or activities.” Under that definition, the workday commences at the time the employee reports for work as required by the employer. PLG also relied in part on an unpublished 2017 opinion issued by the 6th U.S. Circuit Court of Appeals.

The 7th Circuit found, however, that the Portal-to-Portal Act does not apply to out-of-town overnight travel. Rather, the act deals with ordinary daily commuting. PLG workers were not engaged in ordinary daily commuting when they traveled to remote client sites.

Thus, the 7th Circuit affirmed the district court’s decision as correctly granting summary judgment to the employees.

Walters v. Professional Labor Group LLC, 7th Cir., No. 23-3346 (Oct. 30, 2024).

Jeffrey Rhodes is an attorney with McInroy, Rigby & Rhodes LLP in Arlington, Va.