Covering Employee Travel Expenses

Confused about when to pay an employee’s travel expenses? You’re not alone. When travel goes beyond the traditional commute, knowing what to cover can be tricky.

Regardless of the situation, the most important question to ask is whether the travel benefits the company or the employee. If it benefits the company, it is likely the expenses should be covered by the company. Notwithstanding, here are some specifics:

The Commute to and from Home
For an employee to travel to work from home and back, the commute does not count as working time, whether the employee works at a fixed location or different locations. There is a notable exception to this rule: if the employee works during the commute, or if you require an employee to report to a central location before traveling to a job site, the commute is now work time. Additionally, if an employee must report at one location to receive assignments, supplies, or the like, before heading to the actual work site, travel time from the reporting location to the job site should be paid time.

Be aware that any time an employee volunteers to drive other co-workers home from work, you need to pay that employee for his or her time because the driver is technically “working.”

Regular Travel During the Workday
If an employee is required to travel as part of his or her daily duties, this travel time is regarded as hours worked under federal law. For example, if an employee travels from customer to customer, this benefits the business, and, therefore, the business must pay for the time.

Day Trips
For employees taking day trips for work, the general rule is to include all travel time except meal periods or any purely social time (such as an employee staying an hour after the conference to catch up with friends). Any time for travel from home to an airport or train station and back, however, is not paid. If the employee stays overnight on an out-of-town trip, you count all travel during normal working hours, no matter what day of the week. But you don’t pay for time spent after hours while out of town unless the employee is actively working (attending meetings, etc.) after hours.

Because there are exceptions to every rule, please contact Wright Beamer with any questions you have regarding employee compensation.

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