So, you have a construction project that is in another town or city and require your employees to travel to and from the construction site.
One thing to consider is under the Building and Construction On-Site General Award 2020, there is a ‘distant work payment’ (clause 26.4) you have to make when you require an employee to travel to a construction site that is not located in a metropolitan radial area in which the employee usually lives and is more than 50 kilometres by road from where the employee usually lives. This is a payment instead of the general daily travel allowance (clause 26.1) currently $17.88 per day.
This payment is called a ‘distant work payment’ (allowance) and is paid to an employee for:
- All the time outside ordinary working hours, that is reasonably spent in travel, paid at the ordinary time hourly rate, calculated to the next quarter of an hour and with a minimum payment of half an hour per day for each return journey; and
- Any expenses necessarily and reasonably incurred in such travel, which will be $0.48 per kilometre where the employee uses their own vehicle.
Over the years, many employers have been challenged with double-compensation because the Award was previously worded in a way that employees received travel allowance and distant work payment.
The Fair Work Commission (‘the Commission’) recently made a determination explaining what the purpose of the payments under 26.1 ‘Fares and travel pattern allowance’ and 26.4. ‘Distant work payment’ are. Clause 26.1 is to compensate for all such travel inside a metropolitan radial area and within a radius of 50 kms from the employee’s residence, whilst Clause 26.4 is to compensate for all such travel from the employee’s residence to the construction site that is outside a metropolitan radial area.
For example, Rob is sent out to work at a construction site that 100 kilometres away from his house. It takes Rob 3 hours to reach the construction site using his own car. He then works 8 hours and drives back home another 3 hours.
Rob’s employer will have to pay Rob 6 hours travelling time at his ordinary hourly rate of pay and 200km at $0.48 per kilometre (i.e $96).
If you have any concerns, please contact the BetterHR Advice Team.