Paid travel time and mileage reimbursement are frequently confused topics. Some employers think they’re the same thing. Some think you don’t have to pay one if you’re paying the other. They are, however, independent of each other as are the rules for paying them.
To calculate reimbursement for mileage, try our free calculator to determine the cost.
Always Pay for Travel Time
If employees drive anywhere during work for work, whether it is in their vehicle or the company’s, they must be paid an hourly rate not less than minimum wage. Paying for travel time is mandated by the FLSA. You can’t get around it. However, mileage is another story.
Consider Paying Mileage
Only employees in California and Massachusetts must be reimbursed for mileage, by law (always check with your state for changes), but there are reasons employers in other states might want to reimburse for mileage too:
- Employees are doing work for the company, in their own vehicle, and are incurring work-related expenses. It makes sense that the company would foot the bill for this.
- If the expense of driving their own vehicle causes them to drop below minimum wage, then the company will be in violation of wage and hour laws. (Read more on that here.)
In short, you have to pay employees an hourly rate when they’re running errands for you and you don’t have to, but probably should, reimburse them for mileage at the same time.
The most important thing to note is that reimbursing mileage does not release the employer from their responsibility to pay travel time wages.