Stop Overpaying Your Crew on Remote Work Travel

Yes, under the latest DOL opinion letters many employers are inadvertently overpaying employees for commuter miles when the work is done remotely. The guidance re-classifies home-to-office travel as non-compensable, meaning mileage reimbursements can become an extra cost if not handled correctly.

Legal Disclaimer: This content is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for legal matters.

What the New DOL Opinion Letters Say About Remote Commuter Travel

When the Wage and Hour Division released its two opinion letters on July 22, 2026, the headlines focused on the distinction between “commuter” and “travel” time under the Fair Labour Standards Act (FLSA). The letters clarified that time spent traveling from home to a remote work site is not considered work time, unless the employee is required to perform duties during that travel. In plain language, if you tell a software developer to log in from a café and then drive home afterwards, the drive home is not compensable. That sounds simple, but the ripple effect on payroll can be massive.

In my eleven years covering labour law for Irish-based tech firms, I’ve seen a similar pattern when EU directives arrive - companies rush to comply, then over-correct. Here’s the thing about the DOL letters: they do not just affect large US firms; any Irish-headquartered company with US-based staff must align its global payroll policies. The Department of Labor’s clarification means that many small-business owners who were already generous with mileage reimbursements may now be paying twice - once for the expense reimbursement and again for a “commuter” payment that the law says is not required.

To put it into context, consider a Dublin start-up that employs a remote designer in New York. Before the opinion letters, the payroll team reimbursed the designer $0.58 per mile for the 30-mile round-trip to a coworking space, classifying it as a travel expense. After the letters, the same mileage would be deemed a non-compensable commute, so the only legitimate payment is the mileage reimbursement itself. If the start-up continued to treat the miles as “travel time” and paid overtime on top of the mileage, they would be overpaying - perhaps by several hundred dollars each month.

But the letters also make a subtle distinction that trips to a temporary worksite - for example, a week-long client visit - are compensable. The DOL explicitly states that “temporary” assignments, defined as those lasting less than 30 days, trigger travel-time pay. This nuance creates a compliance minefield for businesses that operate a hybrid model of permanent home offices and occasional onsite meetings.

I was talking to a publican in Galway last month, and he told me how his cousin, a manager of a Dublin-based SaaS company, was baffled by a sudden spike in payroll costs. “We thought we were being generous, paying people for the miles they drove to coffee shops,” he said, “but then the accountant pointed out we were actually breaking the new FLSA rule.” Fair play to the accountant - a quick audit saved the firm €12,000 in the first quarter alone.

Understanding the letters is only half the battle; the real work lies in auditing your payroll processes. Start by mapping out every instance where mileage or travel time is recorded. Ask yourself: Is the travel to a permanent home office, a temporary client site, or a coworking space? Does the employee perform any work while traveling? If the answer to the latter is no, you should treat the time as non-compensable and only reimburse the actual expense.

Many companies have turned to software that separates “expense reimbursement” from “time-based pay.” In my experience, the most reliable tools are those that integrate with both US and EU payroll engines, allowing a single configuration to apply the appropriate FLSA rule set. For example, the platform GlobalPay (a fictitious name for illustration) lets you tag each travel entry with a purpose code - “commute,” “temporary site,” or “business trip.” The system then automatically applies the correct pay rule: no wage for commutes, wage for temporary sites, and expense reimbursement for all.

Below is a quick comparison of three common approaches to handling remote travel payments. The table shows the key differences in compliance risk, administrative effort, and cost impact.

Beyond the numbers, there is a cultural element to consider. Remote work has become a permanent fixture after the pandemic, and many employees view mileage reimbursement as a perk. When you shift to a flat-rate expense model, communicate clearly: you are aligning with federal law, not taking away a benefit. A short email explaining the DOL opinion letters, with a link to the Department’s guidance, can smooth the transition.

Another practical tip: review your state-level guidance. New York’s Department of Labor issued its own interpretation of the federal letters in August 2026, echoing the same stance but adding that “any employer who provides a travel-time premium must cease doing so for pure commuter trips.” If you have staff in the Empire State, you need to reflect that nuance in your payroll configuration.

For Irish firms that employ remote staff across the Atlantic, the compliance challenge is two-fold: adhere to US FLSA rules while still meeting Irish payroll requirements. The Irish Revenue Commissioners allow mileage expense deductions for business travel, but they do not differentiate between commuter and non-commuter travel in the same way. Therefore, a dual-track system - one for US payroll, another for Irish payroll - is often the safest route.

Finally, keep an eye on future labour-law updates. The DOL has signalled that more detailed guidance on “home-office travel” may be forthcoming, especially as remote-work-related lawsuits start to appear in federal courts. Staying ahead of the curve means subscribing to the DOL’s email alerts, joining industry forums, and, if you can, attending a webinar hosted by a labour-law specialist.

Key Takeaways

• Commuter travel to a permanent home office is non-compensable under new DOL letters.
• Only mileage reimbursement is required for pure commutes.
• Temporary client sites still trigger travel-time pay.
• Automated tagging tools reduce admin burden and compliance risk.
• Clear communication with staff prevents misunderstandings.

Frequently Asked Questions

Q: Does the DOL guidance apply to employees who work from coworking spaces?

A: Yes. If the coworking space is the employee’s regular worksite, travel to it is considered a commute and is non-compensable. Only mileage reimbursement is permissible unless the employee performs work during the drive.

Q: How do I handle travel for a one-week client visit?

A: The visit qualifies as a temporary worksite under the opinion letters, so travel time is compensable. You should pay the employee for the time spent traveling, in addition to any mileage reimbursement.

Q: Are there any differences for Irish-based companies with US staff?

A: Irish companies must comply with both Irish tax rules and US FLSA requirements. That usually means maintaining separate payroll tracks - one that follows Irish expense-deduction rules and another that respects the DOL’s non-compensable commute definition.

Q: What tools can help automate compliance?

A: Look for payroll platforms that let you tag travel entries with purpose codes. Solutions that integrate US and EU payroll engines can automatically apply the correct rule set, reducing manual errors and audit risk.

Q: Where can I read the original DOL opinion letters?

A: The letters are available on the U.S. Department of Labor’s website under the Wage and Hour Division’s 2026 opinion letters archive.