We were recently asked: “We are currently revamping our travel policy and are looking for feedback as well as helpful hints or examples.”
A few specific items are potential client lunches/dinners pertaining to alcohol limits and pricing, and hotel star rating with average price per night.
Response:
Employers often ask about protocols for travel policies and procedures. Below is a snapshot of what matters most when drafting or updating a travel policy.
1. First, consider federal guidance on compensable travel time. The rules depend on the type of travel involved and how it relates to the employee’s normal workday.
Home-to-work travel: Time spent commuting from home to the regular workplace is ordinarily not compensable work time.
Home-to-work on a special one-day assignment in another city: If an employee who normally works at a fixed location is sent on a special one-day assignment in another city and returns home the same day, travel to and from that other city is generally work time, except that an employer may exclude the time the employee would normally spend commuting to the regular work site.
Travel that is all in a day’s work: Time spent traveling as part of the employee’s principal activity — for example, moving from job site to job site during the workday — is work time and must be counted as hours worked.
Travel away from home community: Travel that keeps an employee away from home overnight is travel away from home and is work time when it cuts across the employee’s normal workday. Time spent traveling away from home outside regular working hours as a passenger on common carriers is generally not considered hours worked for enforcement purposes.
Travel policy topics
- Responsibilities and enforcement
- Travel arrangements
- Air travel
- Lodging
- Accommodation selection
- Car rentals
- Other transportation
- Meals and entertainment
- Award point programs
- Spouse/guest/personal travel combined with business
- Telecommunications
- Other reimbursable expenses
- Miscellaneous travel expenses
- Payment and documentation
2. Know that you may pay a lower hourly rate for certain travel time for nonexempt employees; this is not an issue for exempt employees.
3. Involve frequent travelers when setting up the policy so they have input and buy-in. Many employers open corporate accounts with major hotel chains to standardize lodging and get better rates, and require employees to book in advance where feasible.
4. For practical guidance on insurance and coverage options related to employee travel, see Travel, Trailer & Employee Travel Insurance Overview and Travelers Insurance.
5. For meals and entertainment, many employers set a reasonable alcohol limit (for example, no more than two drinks per meal) and define per-meal spending caps based on location and role. If a proposed expense exceeds policy limits, require prior approval or a quick check-in with a manager.
Don Phin, Esq., is VP of Strategic Business Solutions at ThinkHR and provided the guidance above. The examples and recommendations are general; tailor policy details to your organization’s size, budget, and applicable laws.
Frequently Asked Questions
Is travel time to a different city in the same day compensable?
Yes. Time spent traveling to and from a different city for a one-day assignment is generally compensable, minus the time the employee would normally spend commuting.
Can an employer limit alcohol on expense reports?
Yes. Employers can set reasonable limits on alcohol consumption and require approval for exceptions as part of the travel and expense policy.
Should employees be allowed to keep hotel or airline reward points?
Many employers allow employees to retain personal reward points earned while traveling, but policies vary and can require that bookings be made on corporate accounts.
What documentation should employees submit for travel expenses?
Require itemized receipts for lodging, meals, and transportation and a brief business purpose for each expense to support reimbursements and audits.