How to compensate employees for the hours they spend traveling on business has become a major concern for payroll departments. Recent changes in federal and state wage-and-hour laws, combined with economic pressures on both employers and employees, can create situations that may invite noncompliance lawsuits, particularly when travel time results in overtime being owed to an employee.
But travel pay isn’t just a concern for the DOL. The IRS also has strict regulations governing when employees can be reimbursed for travel expenses without those payments being considered wages. Does the company use the per diem method to reimburse employees, or does it use an accountable plan? Or is a formal method even required when reimbursing employees for travel expenses?
