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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Employment Law
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Experience:  20+ Years of Employment Law Experience
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My companys mileage reimbursement policy is causing a lot

Resolved Question:

My company's mileage reimbursement policy is causing a lot of heartburn. 90% of our employees are engineers that are "in the field" at client sites all day. They rarely visit the office. Our current policy is that we reimburse your miles driven in a day, less the standard round trip commute from your home to your local office. We have some people making a killing because they live 1 mile from the office and essentially get reimbursed for every mile driven. We have other employees getting seriously punished because they live 75 miles from the office, so essentially none of their miles driven is reimbursable. IRS guidance on this topic doesn't seem to address the situation of employees who are driving almost all day every day, so it is hard to get guidance. I know you can't reimburse them for a standard commute. Someone has suggested applying the transient employee policy, but I don't think it relates, as we DO have local offices near almost every employee. Help?
Submitted: 8 years ago.
Category: Employment Law
Expert:  Law Educator, Esq. replied 8 years ago.
There is nothing wrong with this policy and actually it is a common one used by many companies and is legitimate even under the Fair Labor Standards Rules on travel time reimbursement. Even if you were not to pay mileage, but working time for employees travelling, the FLSA says travel from home to office is NOT compensible, thus you would be liable to pay only for travel from office out. The same thing applies to paying mileage, you only pay mileage from the office to the job site, not from their home to the job site.

Thus, you are not wrong in paying mileage by deducting their round trip mileage to and from the office, since you could actually force them to report to the office each day and then go out to work and report back at the end of the day and the mileage to work and home from work would not be compensible as reimbursement or working hours.

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Customer: replied 8 years ago.
The issue is that management doesn't want to punish the people that live far away, as it is causing employee satisfaction and retention problems. They would actually like to offer a different policy that is more equitable.

Are you familiar with any other accepable policies that reimburse employees any different ways? For example, I have heard of employers reimbursing employees from the office to their first appointment, even if they didn't go to the office first.

In that scenario, even if I don't go to the office in the morning, I would expense my mileage from office to first appointment, first appointment to second appointment, and then 2nd appointment back to the office, even if don't return to the office.

Thoughts? Alternatives?
Expert:  Law Educator, Esq. replied 8 years ago.
They are not really punishing these employees, the fact is that mileage is not compensible to and from home to office under the "portal to portal" rule. These are the laws set up. If you do it differently, then you are punishing those who live close to the office (creating a new set of hard feelings).

As I said, the employer can run mileage from the office to the first job site for all employees and then mileage to other sites from that and that would be an acceptable method.

Of course, the employer really doesn't have to pay any mileage under the law and could just pay the employee for all the hours worked from the time the arrive at their first job site until they end their last job site and tell the employees to just claim mileage on their own tax returns (that is completely acceptable under the law and to the IRS).

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