Impacts of Port of Tacoma Ruling
- The Port of Tacoma purchased new cranes from a manufacturer in China. As part of that process the Port invited interested mechanics, employed by the Port, to volunteer to be part of the quality inspection team to observe the manufacturing process in China.
- Two trips to China and one trip to Houston, TX were arranged by the Port for the selected mechanics to attend training.
- The Port made all arrangements for the trips, including air transportation. Several Port employees ended up going on the trips.
- The Port did not have a policy in place concerning this type of travel so the Port negotiated with the mechanics' union and it was determined that the mechanics would be paid for eight hours per day, straight time, for travel to and from China. Consequently, the mechanics were not paid for all time spent traveling, as the trips required more than eight hours per day of travel time.
- The mechanics filed wage claims with the Department of Labor and Industries, seeking compensation for the time they spent traveling for the Port, including all travel to and from the airport, all time spent at the airport, and all time spent in flight.
- The Department of L&I issued a citation to the Port for wages owed to the mechanics for their travel time.
- The Port appealed the citation to Superior Court, who granted summary judgement in favor of the Port. The Department of L&I then appealed to the Washington Court of Appeals.
- The Court held that the Department of L&I's interpretation of WAC 296-126-002(8) regarding “hours worked” as it related to out-of-town travel should be accorded deference and, consequently, agreed that Washington's Minimum Wage Act required the Port to pay for all travel time for the mechanics. a. WAC 296-126-002(8) provides that “hours worked” is defined “to mean all hours during which the employee is authorized or required by the employer to be on duty on the employer's premises or at a prescribed work-place.” The Department of L&I's interpretation of “hours worked” means “all work requested, suffered, permitted or allowed and includes travel time, training and meeting time, wait time, on-call time, preparatory and concluding time, and may include meal periods.”
- The Court further agreed that the Department of L&I's reliance on its Desk Aid to help determine if the mechanics' time for their trips to China were compensable was justified. a. L&I's Desk Aid stated in part, “In Washington, all travel time related to work is compensable regardless of the hours when it takes place and includes the time to get to the airport or train station. If a person is required to travel to a training seminar in another city, the time from when the employee leaves their home until the arrive at their hotel in the other city is all compensable. Likewise, the time from when the employee leaves the hotel (or training facility) in the remote city, until the arrive back at their home, is also compensable. If, on the other hand, the employee is required to report to work before the travel out of town, then the drive to work and home from work at the end of the travel is considered normal commute time and is not compensable.
- The Court distinguished between “hours worked” within the context of a daily commute and out-of-town travel, concluding that out-of-town travel time should be paid in circumstances such as the facts found in the Port of Tacoma v. Sacks case. a. The Department of L&I concluded that “Under WAC 296-126-002(8), ‘hours worked' includes travel time for out-of-town work assignments. As in federal law, travel for an out-of-town work assignment is not the same as ordinary hometo-work travel. It is performed for the employer's benefit and at its special request to meet the needs of the particular assignment. It is an integral part of the principal activity that the employee was hired to perform. This is true regardless of whether the employee engages in additional work during the journey or whether the employer owns or controls the employee's means of transport. Because the travel itself is a duty of the work assignment, so long as the employer approves the means of travel, the employee is on duty at a prescribed work-place throughout the travel time.”
- The Court found that “neither party disputes that the disputed hours were “authorized or required” by the Port.” Accordingly, the first factor of WAC 296-126-002(8) was satisfied.
There are a few significant considerations from the Port of the Tacoma v. Sacks case.1
- Employers need to carefully review and update their travel policies and/or review any collective bargaining provisions as they may relate to their non-exempt employees to reflect the findings of the Court. Employers will need to consider the following when drafting their travel policies and/or language in their collective bargaining agreements relating to compensable travel time: is an employee's hours authorized or required; is an employee “on duty”; and is the employer “prescribing and dictating” the “workplace” of the employee when an employee is traveling. For example, this will be of critical importance when faced with requests from employees who are seeking voluntary training. Many agencies have distinctive policies that reflect how each agency approaches travel based on scheduling and other factors. Accordingly, agencies should review their own policies and CBAs and work with their legal counsel to implement the findings of the Court in the Port of Tacoma case.
- The Court's decision stepped away from the federal law where, in normal circumstances, employers are not required to pay an employee for travel time if the travel time is outside an employee's normal working hours or if the employee is not engaged in work. Washington's Minimum Wage Statute requires a broader interpretation of compensable time associated with travel than the FLSA. Washington law requires compensation for out-of-town travel regardless of whether any work is performed or whether the employee's travel happens during normal work hours if the factors discussed above are met.
- Employers need to acknowledge and incorporate into their policies provisions that are based on the Court's guidance: Washington courts will liberally construe regulations promulgated by the Minimum Wage Act, in favor of beneficiaries of that law.
Employers should always consult with their own trusted legal counsel if they have any questions or concerns regarding their policies or compensating employees for their time spent traveling. There may be updates or changes to the law that could impact the information contained in this memo