When we require employees at our branch to travel to the main office for an after hour meeting—for which they will be paid—are we required to pay mileage as well?
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Thank you for your inquiry regarding mileage reimbursements.
Neither federal nor state law generally requires employers to pay employees mileage reimbursement. Some employers do choose to offer mileage reimbursement to employees who drive their personal vehicles for work purposes.
In such cases, the IRS standards are commonly used. The standard mileage reimbursement rate, effective January 1, 2016, is 54 cents per mile for all business miles driven. The standard mileage reimbursement rate is 19 cents per mile for medical or moving purposes and 14 cents per mile for service of charitable organizations.
Employers that use the IRS rate or a lower rate may deduct the reimbursement as a business expense, and the payment need not be included in the employee’s income. If the approved rate (or a lower rate) is used, the IRS considers that requirements to substantiate and adequately account for the expense are satisfied without extensive documentation of actual expenses. The employer may deduct reimbursements at a higher rate, but only if the reimbursements reflect the actual cost of the travel and only if the employer keeps adequate records to substantiate its outlays.
Reimbursements for tolls, parking, etc., may be deducted in addition to the mileage allowance.
There may be travel time issues to consider. Time that an employee spends traveling as part of his or her principal activity, such as travel from jobsite to jobsite during the workday, must be counted as hours worked.
Where an employee is required to report at a meeting place to receive instructions, pick up tools, or to perform other work there, the travel from the designated place to the workplace is part of the day’s work and must be counted as hours worked regardless of contract or custom (29 CFR 785.38).
For example, if an employee normally finishes his work on the premises at 5 p.m. and is sent to another job, which he finishes at 8 p.m., and is required to return to his employer’s premises, arriving at 9 p.m., all of the time is work time. However, if the employee goes home instead of returning to his employer’s premises, the travel after 8 p.m. is home-to-work travel and is not hours worked.
Any work that an employee is required to perform while traveling must, of course, be counted as hours worked. An employee who drives a truck, bus, car, boat, or airplane, or an employee who is required to ride as an assistant or helper, is working while riding. But the employer need not pay for meal periods or time when the employee is permitted to sleep in adequate facilities furnished by the employer (29 CFR 785.41).