When should I pay travel allowance – Common trend questions

With the current fuel price increase and volatility in the sector in general, it is now more important than ever to ensure you are aware of your obligations under the Building and Construction General On-Site Award (‘the Award’).

The travel allowance is an allowance of $21.94 payable every day that an employee:

• starts and finishes work on a construction site; or
• Is required to perform prefabricated work in an open yard and is then required to erect or fix on-site

save for some exceptions.

We will discuss a couple of common scenarios faced by members and whether this would impact on the employer’s obligation to pay the travel allowance.

Common trend scenarios

1. I provide a fuel card – do I need to pay the travel allowance?

Under clause 26.1(b)(ii) of the Award, an employee will not be entitled to the travel allowance if the employer provides a fully maintained vehicle free of charge.

If the employer provides a fuel card, but not a fully maintained vehicle, the employee must still be paid the daily travel allowance.

2. I provide a fully maintained vehicle to my employee, am I required to pay fuel and the travel allowance?

Clause 26.1(b)(ii) of the Award stipulates that an employee is not entitled to the travel allowance where an employer provides a fully maintained vehicle free of charge to the employee.

If the employer provides a fully maintained vehicle, but not a fuel card, the employee will not be entitled to the travel allowance.

3. I pay the travel allowance, why is my employee claiming additional expenses?

It is common for an employer to have more than one active projects, with employees travelling between sites. Under clause 26.2(b)(ii) an employee who uses their own vehicle to travel between sites must be paid an amount of $0.98 per kilometre.

If an employee uses his own vehicle and drives between sites, that employee must be paid an amount of $0.98 per kilometre for travel between sites in addition to the travel allowance.

4. My employee included the time spent in travel from his home to site as working hours, is this correct?

An employee’s ordinary working hours must be discussed and agreed before commencement of employment. It is up to the employee to report for work at the agreed start time, regardless of the time spent in travel. Clause 26.3 of the Award confirms that the time spent in travel from an employees home to their job, and return, will be unpaid unless that employee is directed to pick up another employee.

An employee will not be entitled to be paid for time spent in travel to get to and from work, unless the employer directs that employee to pick up or drop off another employee on the way.

5. My employee resides in a regional NSW area – he is claiming the distant work payment to work on site in the ACT. Am I required to pay him?

Clause 26.4 of the Award stipulates that where an employee is required to travel to a construction site where that site is:

• not located in a metropolitan radial area in which the employee’s usual place of residence is located; and
• more than 50 kms by road from the employee’s usual place of residence;

That employee will be entitled to received the distant work payment instead of the travel allowance.

This will not be the case where, at the commencement of employment, that employees place of residence was more than 50km by road from the construction site on which the employee was initially engaged.

6. Is my apprentice entitled to the travel allowance?

An apprentice is defined as an employee for purposes of the Award, and therefore entitled to the benefits and allowances applicable to permanent employees unless stated otherwise.

Clause 26.5 of the Award provides for apprentices to receive a pro-rata entitlement of the travel allowance, based on the year of apprenticeship:

(i)            on the 1st year rate—75% of the amount prescribed;

(ii)          on the 2nd year rate—85% of the amount prescribed;

(iii)        on the 3rd year rate—90% of the amount prescribed;

(iv)        on the 4th year rate—95% of the amount prescribed.

With the current escalations in fuel prices this is an ideal time to review travel arrangements and discuss ways to mitigate costs.

Should you require assistance with your employees’ entitlements or wages,  please contact the Workplace Relations Team:

📞 (02) 6175 5900
📧 workplace@mba.org.au