Mileage
mar8267
7 Posts
We've been trying to give our personnel manual an overhaul for the past 2 years. Unfortunately we are governed by a Board of Directors who have to approve everything we do! We got hung up on mileage reimbursement at the last meeting. Our policy is to pay employees for any mileage over their usual home to work mileage. The only time this has been a problem is deciding what their usual place of work is as we have 2 offices and some employees work at both sites different days of the week. What one Board member wants to do is assign everyone a home base (which is fine) and then always pay them from their home base to where ever, no matter where they left from. I was under the impression that you had to pay for actual miles traveled. If we do it her way, some employees will get paid for more miles than they actually drove if they leave from their homes. Does anybody know if that's OK or not?
Comments
I believe that one person can have two different work sites and travel is only paid when they travel on company business from one site to the other or any other place of business on behalf of the employer in one's personal automobile. If there is a set date schedule to which the employee agrees there will be no travel expense occurred for a home to work and return to home situation for either location. If you do pay for mileage your company will be doing better than the FLSA requires. Section 785-37,38,39 is the section pertaining to this issue.
Welcome to the forum!
PORK
If we order a mechanic (facilities) to go to a different worksite than his base, which is the corporate maint area, we must pay him on the clock from the time that he leaves his residence until he reports back into the base station at which time he picks up his normal routine. If he has used his own personal truck to get to the different work site, we must pay him mileage from his residence to the different work site, to the base station. His return trip to his home at the end of the day is not paid for time nor mileage.
Our mechanic is in travel status anytime that he has to leave the base area for "job order" completion. We now have all of our mechanics in company vehicles, which stops the drain on mileage, but the FLSA situation is real and must be paid from time departed for work regardless of where, other than his normal daily dispatch office. From the dispatch office in a company vehicle he is on the clock only after he gets to the dispatch office and is then assigned to a specific job order or a series of job orders. He remains on the clock until he punches out or arrives back at his home of residence. Sometimes it is better if the mechanic is passing his home on a return trip to the office, we will have him stop, clocking out upon arrival and only clock back in on the next day's business when he arrives the next day.
We may be doing better than the FLSA but I don't think so and that is alright as long as the ee is getting his right pay so that Uncle Sam can get their right pay, also.
PORK
If you are normally scheduled to work at the downtown location and every once in a while you are needed to start the day at the suburban location, you do not get mileage for home to work travel, EVEN if it isn't your normal work site. However, if you report to the normal work site (downtown)and are sent to the suburban location after arriving there, then you are paid for the travel time AND paid mileage for the travel to the location. No mileage would be allowed for the trip home.
Anne in Ohio
I've tried to forget all the tax law I've ever learned, so I asked our comptroller. She said that if you pay ees for mileage they didn't drive, then the IRS would count it as income, so you'd have to withhold taxes on it. And the same for paying for home-to-work commuting, regardless of distance or changing locations.
Neither of us are lawyers, but if she's right, it could be an accounting headache. Might be simpler to just give a bonus or a pay hike to the two-office folks, if it's really that big of a deal.
Good luck!
James Sokolowski
HRhero.com
Thank your comptroller for me! Your response makes perfect sense and should be enough to convince our Board to keep our policy as is.
I even have to pay taxes on my company car and miles travelled, as personal use. Our mechanics on the other hand do not because they are dispatched often in any hour of the day to go fix something critically broken. It is considered a business requirement to be ready to roll on a given telephone call. When that happens the clock starts rolling, even while he is getting out of the bed and getting dressed to go to work!
My miles travelled as personal use is taxable to and from the work site unless it is one of after hour calls to go investigate a vehicle accident. On this few events the miles travelled to work are business miles. The extra hours are just that extra hours for which I am paid in my salary.
PORK
If you pay the employee more than the IRS allows, it is income to the employee. If you pay less, then the employee can claim it on their taxes.
I recommend that you stay with the IRS to avoid problems and confusion. Going from home to the worksite and from the worksite (whether the worksite is one site or another) is disregarded by the IRS. Any miles the employee drives in between (for the company) should be reimbursed at the IRS rate. The rate effective 1/1/06 is .445 cents per mile.
Good luck!
Nae