Q. "What are best practices for mileage reimbursement?"
Answer:
While federal law doesn't mandate mileage reimbursement, it's often required by state law or your organization's policies. If an employer requires or approves an employee's use of a personal vehicle for work, reimbursement is generally expected.
Here's a breakdown of when and how this policy should be implemented:
What travel qualifies for mileage reimbursement?
Traveling to off-site meetings or appointments
Running work-related errands
Traveling between work locations
NOT regular commutes to and from work
How should mileage reimbursement be calculated?
The IRS sets a standard mileage rate many employers use as a guideline designed to cover vehicle expenses like fuel, wear and tear, and maintenance
Employers can reimburse at a higher rate, but generally not lower
What about non-exempt employees?
Mileage reimbursement is separate from wages
Delayed or insufficient reimbursement can indirectly affect overtime calculations under the Fair Labor Standards Act (FLSA) by reducing the employee's regular rate of pay
How should employees track mileage?
Employees should keep detailed records of applicable travel, including:
Date
Location
Purpose
Starting/ending odometer readings
What makes a reimbursement policy reasonable?
A good policy should be written, communicated to all employees and include:
Clear guidelines on when mileage is reimbursable
Reimbursement rate
Procedures for submitting mileage records
Timely reimbursement