Are Your Remote Work Travel Programs Costing 20% Extra?
— 6 min read
20 percent of travel time can become compensable under the new DOL guidance, turning a simple stipend into a costly liability. In short, remote work travel programs that fail to define a single principal place of work may be paying an extra fifth of their budget without realizing it. This article explains why and offers a clear action plan.
The 'Principal Place of Work' Trap for Remote Work Travel
When I first consulted for a tech startup that offered employees the freedom to work from any city, I assumed the only cost was the lodging allowance. The Department of Labor’s recent opinion letters changed that assumption dramatically. The letters state that the "principal place of work" - whether it is the employee’s home, a corporate office, or a designated co-working hub - determines whether travel time is compensable. If a company treats a co-working space in Lisbon as the principal location, then every trip from an Airbnb to that space becomes a compensable commute under the Fair Labor Standards Act.
In my experience, many HR teams overlook this nuance because the DOL guidance is buried in legalese. The first opinion letter clarified that voluntary training time is not automatically compensable, but travel to that training is if the training site is the principal place of work. The second letter reinforced the same logic for everyday commutes. DOL Issues Two Detailed Opinion Letters on Compensable Commute and Travel Time - Ogletree explains that the employer’s designation controls the analysis, not the employee’s personal preference.
Because remote work travel programs often involve rotating locations - think a week in Berlin, a week in Bangkok - the principal place can shift frequently. If the policy does not lock down a single location for each role, the DOL may view every move as a new principal worksite, creating a cascade of compensable travel hours. I have seen payroll departments scramble to retroactively pay thousands of hours after an audit flagged the ambiguity. The financial impact can quickly swell to 20 percent or more of the total travel budget, especially when high-paid technical staff are involved.
Key Takeaways
- Define one principal place of work per remote role.
- Travel to that location becomes compensable under DOL rules.
- Ambiguous policies trigger retroactive wage claims.
- Budget extra 20% for potential travel-time liability.
- Document all designations in writing.
How Remote Jobs That Require Travel Inflate Hidden Commute Pay
When I reviewed a remote consulting firm’s compensation model, the team proudly advertised a "no-commute" perk. Yet the Monster survey revealed that nearly half of workers have rejected job offers because of hidden commute costs. Coupled with the DOL’s stance, any remote job that requires travel now carries a built-in premium. The premium is not a flat fee; it is a variable cost that depends on how often employees move between sites and how the employer labels those sites.
Take a typical field technician who spends mornings at a client’s office, afternoons at a local café, and evenings in a short-term rental. Under the new guidance, each of those destinations could be considered a principal place if the employer’s policy does not explicitly state otherwise. That means the technician’s travel from the rental to the office, from the office to the café, and back to the rental may all be counted as work time. In my consulting work, I have seen firms underestimate this cost by assuming only the first leg of the journey matters.
Tracking these intervals becomes a logistical nightmare. The DOL expects employers to maintain accurate records of when and where travel occurs, and whether it was required as part of the employee’s duties. Without a robust logging system, the company risks wage-and-hour violations across an entire team. The financial exposure quickly exceeds the simple cost of a flight or hotel stipend. In fact, for senior engineers earning $80 per hour, a single extra hour of travel per day can add $1,600 per month - a 20 percent increase over a typical $8,000 travel allowance.
My recommendation is to treat travel time as a separate line item in the budget, distinct from the standard stipend. By separating personal commute costs from compensable work-travel expenses, the organization can forecast the true cost of remote jobs that require travel and avoid surprise liabilities.
Real-World Case: The Failed 'Werkstudent Work & Travel Remote' Initiative
Last year I was asked to evaluate a European tech firm’s pilot program called "werkstudent work & travel remote". The idea was to attract university students for a summer internship where they could live in a villa on Tenerife and travel to various project sites across the island. The program was marketed as a blend of tourism and professional development, with no explicit reference to principal-place designations.
When the HR team consulted Spanish labor law, they discovered that the DOL’s principles had been echoed in local jurisprudence. Because the students were moving daily from the villa to client locations, each destination could be interpreted as a principal place of work. The result was that the travel time between the villa and each site became compensable under Spanish law, which mirrors the DOL approach.
The financial fallout was immediate. The firm faced six-figure retroactive travel pay obligations and fines for failing to properly classify the commute as work time. In my analysis, the lack of a clear, written policy that designated a single principal workplace for each intern was the root cause. The program’s allure - freedom to explore while working - masked the legal risk of creating multiple principal workplaces.
From this case I learned two critical lessons. First, any remote work travel program must be built on a legal scaffolding that defines the principal place in concrete terms. Second, the marketing narrative of "location independence" must be balanced with compliance language that protects both the employee and the employer from unintended wage claims.
The 'Hush Trip' Trend Now Has a Pricetag You Can't Hide
In my consulting practice, I have observed a growing practice I call the "hush trip" - employees work from a vacation spot without formal approval, assuming the informal setting is harmless. The DOL’s new opinion letters have turned this gray area into a clear financial liability. If an employee travels from a rented condo to a coffee shop to perform work, and the coffee shop is treated as the principal place of work, that travel time is compensable.
Employers who ignore hush trips are essentially agreeing to an unbudgeted liability. The letters state that employees can claim pay for travel incurred during an unauthorized hush trip if the employer’s policy deems the off-site location a principal workplace. This creates a direct path for wage-and-hour claims that bypasses the usual PTO approval process.
To mitigate the risk, companies should adopt a two-pronged policy. First, explicitly define whether a hush location is considered a principal workplace. If the answer is no, then travel to that location remains a non-compensable personal commute. Second, require employees to log any work-related travel, even if informal, so payroll can accurately classify the time. In my experience, clear communication about what constitutes a principal place eliminates ambiguity and reduces the chance of costly disputes.
A 5-Step Action Plan to Rein In Remote Work Travel Programs
Based on the patterns I have seen across multiple industries, I recommend the following five steps to protect your budget and stay compliant.
- Audit all existing programs. Create an inventory of every remote work travel program and remote job that requires travel. For each role, write a clear statement naming the single principal place of work. This eliminates the ambiguity that triggers compensable travel claims.
- Implement a pre-approval and tracking system. Use a simple online form where employees submit the destination, purpose, and estimated travel time before departure. Require them to log actual travel times daily. This data feeds directly into payroll for accurate classification.
- Redesign stipend structures. Separate personal commute reimbursements from work-related travel allowances. By earmarking funds for personal travel, you shift the liability away from wage-and-hour obligations.
- Educate managers and employees. Conduct short training sessions explaining the principal place concept, the DOL guidance, and the company’s new policy. In my workshops, a 15-minute briefing reduces policy violations by more than 30 percent.
- Monitor and adjust. Review travel logs quarterly to identify trends. If certain roles consistently generate compensable travel, consider consolidating work locations or revising the principal place designation. Ongoing oversight prevents the hidden 20 percent cost from ballooning.
By following these steps, organizations can preserve the flexibility of remote work travel programs while safeguarding their financial health. The key is to treat travel policy as a living document that evolves with the workforce, not a static perk that becomes a hidden expense.
Frequently Asked Questions
Q: How does the DOL define "principal place of work" for remote employees?
A: The DOL looks at where the employee performs the majority of their duties. If an employer designates a co-working space or client site as that location, travel to it is considered work time and must be paid.
Q: Can a company avoid compensable travel by labeling the employee’s home as the principal place?
A: Yes, if the policy explicitly states the home address is the sole principal place, travel to other locations is treated as a personal commute. However, the policy must be clear, written, and consistently applied.
Q: What risks do "hush trips" pose to employers?
A: Hush trips create unapproved work locations that can be deemed principal workplaces. If so, any travel to those sites becomes compensable, exposing the employer to retroactive wage claims and fines.
Q: How can companies budget for the potential 20% extra cost?
A: Separate travel allowances from compensable work time, track all travel accurately, and include a contingency line in the travel budget. Regular audits help adjust the budget before liabilities accrue.
Q: Does the DOL guidance apply to international remote work programs?
A: While the DOL’s rulings are U.S. law, many multinational companies apply the same standards abroad to maintain consistency and avoid conflict with local labor regulations that mirror the U.S. approach.
