Wage & Hour Traps on Wisconsin Construction Sites: Travel Time, Prep Time, and Misclassifications of the Workforce

Calculating accurate wages and hours for employees remains a persistent risk area for Wisconsin employers, particularly those operating in construction and other job site–driven industries. While many employers understand the basic requirement to pay hourly employees for time worked, less obvious issues, such as travel time, pre- and post-shift activities, and overtime calculations, often create significant exposure. Missteps in these areas can quickly lead to costly claims, audits, or class-based litigation.

Overtime: the Baseline Obligation

Under Wisconsin law, most employers must pay covered employees one and one-half times their regular rate for all hours worked in excess of 40 hours in a workweek. This requirement applies broadly across industries, including mechanical and “trade” based occupations common on job sites. Although certain exemptions exist, such as for bona fide executive, administrative, or professional employees, those exemptions are specific and rarely apply to tradespeople. The overtime calculation hinges on “hours worked,” which is where many employers encounter compliance issues.

Travel Time: When Your Employees’ Commute Becomes Compensable

Ordinary home-to-work commuting is generally not compensable. However, once an employee’s travel becomes part of the workday, the analysis changes. For construction companies and contractors, this issue frequently arises when employees report to a shop or yard before traveling to a job site, or when they are required to transport tools, materials, or other employees. If an employee must report to a central location to pick up equipment or receive assignments, the time spent traveling from that location to the job site is typically compensable. Likewise, travel between job sites during the workday is almost always compensable and must be counted toward total hours worked. Special assignments can also create exposure for your company. For example, if an employee is sent to a different city for a one-day project, much of that travel time beyond the employee’s normal commute should be compensable.

Prep Time and “Off-the-Clock” Work

Another common trap for construction companies involves pre-shift and post-shift activities. Job site employees often perform tasks such as loading tools, donning safety gear, reviewing plans, or completing paperwork before the “official” start time. Similarly, they may spend time after hours cleaning equipment or securing materials. If these activities are integral and indispensable to the employee’s principal work, they are generally compensable. For example, requiring employees to load a company truck or gather equipment before heading to a project site likely triggers paid time. The same is true for required safety meetings conducted before the shift begins.

Misclassification of Employees vs. Contractors

Employers must ensure they properly classify workers as employees or independent contractors, as a misclassification can expose the business to significant legal risk, because arguably doing so deprives workers of protections. Simply labeling a worker as an “independent contractor” is not determinative; instead, the analysis turns on the degree of control the employer exercises over the work and the economic realities of the relationship. Administrative bodies and courts commonly examine factors such as who controls the manner and means of the work, whether the worker provides their own tools and equipment, the opportunity for profit or loss, the permanency of the relationship, and whether the services performed are integral to the employer’s business. To avoid misclassification issues, employers should conduct a proactive review of all contractor relationships, ensure written agreements reflect the true nature of the arrangement, and avoid exercising day-to-day control over independent contractors in a manner consistent with an employment relationship. Employers should confirm that independent contractors working on project sites operate independent businesses and maintain their own insurance. When in doubt, consult legal counsel regarding the use of subcontractor agreements and the implementation of the same. One important reason contractors must exercise caution when drafting and utilizing subcontractor agreements is that poorly written provisions may be deemed void and unenforceable. A common example involves “pay-if-paid” clauses. Under Wis. Stat. § 779.135, any contractual provision that makes a general contractor’s receipt of payment from the owner an absolute condition precedent to paying a subcontractor is void.

Bottom Line

To reduce issues with wage and hour exposure, Wisconsin employers should take a forward-thinking approach:

• Track all time worked: Implement reliable systems for capturing travel, prep, and post-shift activities.
• Audit pay practices: Review whether all compensable time is being included in payroll calculations.
• Train supervisors: Frontline managers should understand that directing “off-the-clock” work creates liability.

It is important to keep in mind that the most significant risks arise not from intentional violations, but from overlooked details in everyday operations. While you might be focused on hitting a deadline to ensure that concrete is poured in time or the structure is framed properly based on a new design given to you last minute, by addressing these common issues, employers in the construction realm can better protect themselves from costly wage and hour claims while maintaining compliant pay practices.

This article, slightly modified to note recent updates, was featured online in the Wisconsin Employment Law Letter and published by BLR®—Business & Legal Resources. Reproduced here with the permission of BLR®—Business & Legal Resources.