06 December 2017

Should business travel time be counted as overtime?

This article was written by Linda Liang(Partner), Jingjing Zhang(Managing Associate).

It is common practice that employer arranges its employees to set off on weekends or even statutory holidays for business trips. Some employees contend that the travel time on weekends or statutory holidays for business trips should be counted as overtime, and the employer should give overtime pay accordingly. Is this claim valid from the perspective of law? This article will, by comparing and analyzing several typical cases, discuss this issue and provide employers with some practical suggestions.

In a labor dispute case[1] heard by Beijing Haidian District People's Court ("Haidian Court"), an employee stated that he went to Wenzhou for a meeting on October 11, 2015, a Sunday, and claimed for overtime pay for the time spent on the way to Wenzhou. Haidian Court, however, did not support his claim and held that "in general, commute time to work and business travel time should be deemed as preparation time for work, not overtime”.

In another labor dispute case[2] in Shanghai Changning District People's Court ("Changning Court"), an employee demanded overtime pay based on the fact that during his employment he made multiple business trips to other cities with arrival or departure on weekends. He presented his flight tickets to prove his travel time in order to back up his claim for overtime pay. Changning Court held that "though the tickets can prove the travel time the plaintiff spent on business trips, business travel time is not counted as overtime" and thus dismissed the employee’s claim. The employee then appealed to Shanghai First Intermediate People's Court, and his appeal was also dismissed.

In the aforementioned two cases, the judges did not consider business travel time as overtime. This view is persuasive, to some extent, given the fact that there is a fundamental difference between business travel time and overtime: the former is preparation for work during which employees need not actually exert mental or physical energy on work related tasks, but simply dedication of time; the latter, on the other hand, requires employees’ investment of energy to accomplish specific tasks.

However, different views exist in judicial practice. Tianjin Binhai New District People's Court ("Binhai New District Court") stated in a case[3] that "although the employee was on business travel on October 1, 2013 (a Chinese national holiday), the time spent was still work-related", and thus held that the employer should give overtime pay to the employee. Apparently, Binhai New District Court is less strict with defining the scope of overtime, which is more favorable to employees.

The above cases suggest that, there are different views in judicial practice with respect to this issue. These views each have their own ground. A judge is more likely to exercise his/her discretion on a case-by-case basis. From employer’s perspective, we suggest that:

1. Employer may consider recognizing business travel time spent on weekends or statutory holidays as overtime, and accordingly, arrange compensatory time-off or give overtime pay.

2. If employer is unwilling to do so, it may consider the following measures to mitigate legal risks:

  • Establishing an overtime approval system and implement it strictly.
  • Clearly specifying the rules of overtime recording and calculation in internal policies. For instance, employer may explicitly state that business travel time is not regarded as overtime.
  • Providing employees with travel allowance as compensation for business travel time. Accordingly, employer should emphasize that travel time will not be regarded as overtime.

To summarize, overtime-related dispute is one of the difficulties in human resource management and judicial practice. From employer's perspective, establishing sound and reasonable internal policies, implementing them strictly and ensuring every rule is well complied with can minimize labor disputes and mitigate legal risks to the greatest extent.

[1] (2016) Jing 0108 Min Chu No.5053.

[2] (2014) Hu Yi Zhong Min San (Min) Zhong Zi No. 1958.

[3](2015) Bin Gong Min Chu Zi No. 504.

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