Whether it is to a business meeting across town, a supply run during the workday, or a customer delivery, when employees drive while on the job, it may raise certain concerns for employers. The following are some considerations related to pay, safety, and insurance.

Compensation:

The primary federal law governing employee compensation is the Fair Labor Standards Act (FLSA). The FLSA requires that non-exempt (commonly referred to as "hourly") employees be paid at least the minimum wage for all hours worked and overtime whenever they work more than 40 hours in a workweek.

The FLSA addresses paying non-exempt employees in several driving-related scenarios, including:

• Driving as principal work activity: Under the FLSA, an employee whose principal activity involves driving or acting as a helper in a truck, bus, or automobile is considered "working while riding" and must be paid accordingly, except during bona fide meal periods.

• Travel from job site to job site. The time employees spend driving/traveling between job sites during the workday is considered hours worked and must be paid.
  
  
• Example 1: If workers are required to report at a designated meeting place where they are given instructions, picking up tools or supplies, or performing any other work prior to traveling to the work site, the travel from the meeting place to the worksite must be counted as hours worked.
  
  
• Example 2: The time a service technician spends traveling from customer to customer to do repairs is considered hours worked and must be paid.
  
  
• Example 3: A computer technician who finished his work on the employer's premises at 5 p.m. is then sent to a client's site to perform technical support. He finishes at the client's site at 8 p.m. and then returns to his employer's premises arriving at 9 p.m. All of the time (from 5 p.m. to 9 p.m.) is considered hours worked and must be paid.
  
  
• Special one-day assignment. If an employee regularly works at a fixed location in one city but is given a special one-day assignment in another city, the time spent driving/traveling to and from that special one-day assignment is considered hours worked and must be paid. However, the employer may subtract the time it normally takes the employee to travel to and from his or her regular worksite (i.e., normal commuting time).
  
  
• Example: An employee whose commute is usually 30 minutes each way is given a one-day assignment in another city. The employee's travel to the special assignment takes 3 hours each way. Under the FLSA, the employee would be entitled to 5 hours of paid time for the travel (6 hours of travel minus 60 minutes of normal commuting time).

These are just a few of the many scenarios that can present themselves when non-exempt employees drive for work-related purposes. Employers should carefully review the FLSA as well as state-specific requirements when determining whether pay is required.

Timekeeping:

Under the FLSA, employers have a responsibility to track non-exempt employees' hours of work. While timekeeping can seem more complicated when employees are on the road, employers do have some options, including:

• Remote tracking. Some timekeeping systems allow employees to record hours remotely, such as through the use of their mobile device or computer.
  
  
• Written timesheets. In the absence of remote time tracking capability, some employers simply ask workers to keep track of hours carefully while on the road and to submit their hours on a daily or weekly basis.

Whatever the case, your timekeeping method must be complete and accurate, thus accounting for any compensable time spent driving. A best practice is to have all non-exempt employees sign off on their hours at the end of each pay period.

Mileage Reimbursement:

While there is no federal law that requires employers to reimburse employees who use their own vehicles for work-related driving, some state laws do. For example, California requires employers to reimburse employees for all necessary expenditures incurred as a direct result of their work duties (See California Labor Code Section 2802).

Even absent such a requirement, many employers reimburse employees for these expenses using the Internal Revenue Services (IRS) "standard mileage rate." In such cases, the employer may deduct the reimbursements as a business expense and exclude them from employees' gross income if the reimbursements are "substantiated."

Currently, the IRS standard mileage rate is 56.5 cents per mile; although it is adjusted regularly for inflation. When used, this rate is treated as the equivalent of substantiation if the employer's reimbursement or allowance arrangement meets all of the following:

1. The expenses must have a business connection that the individual paid or incurred while performing services as an employee of the employer;
2. The employee must adequately account to the employer for the expenses (such as keeping a log of business miles driven) within a reasonable period of time; and
3. Any excess reimbursement or allowance must be returned within a reasonable period of time.

If the arrangement fails to meet one or more of the three requirements, all amounts paid under the arrangement are included in the employee's gross income, must be reported as wages or compensation on the employee's Form W-2, and are subject to the withholding and payment of employment taxes.

A best practice for employers that wish to deduct mileage reimbursements as a business expense is to require employees to keep a log of time spent driving using their personal vehicles. Specifically, the log should include the business miles driven, the time and date, and the business reason.

Note: Use of the IRS's standard mileage rate is strictly optional. For employers that choose not to use the IRS standard mileage rate, another option is to calculate the actual costs of using a personal vehicle for business purposes.

Cell Phone Use:

Many states and local jurisdictions prohibit individuals from operating a motor vehicle while using a handheld mobile device. In jurisdictions with no such prohibitions, it is still a best practice to prevent employees from using handheld mobile devices while driving. Consider developing a policy that addresses cell phone use while driving as well as providing employees who drive with guidance on how they should handle calls and other work-related tasks while on the road (e.g. using a hands-free device or pulling into a rest area).

Safety:

Motor vehicle accidents are the leading cause of work-related fatalities in the United States, according to the Bureau of Labor Statistics. It is recommended that employees who drive regularly be trained on safe driving practices and be required to sign an agreement acknowledging company policies and expectations regarding safe driving.

Employers may also want to consider checking driving records periodically (if an employee regularly drives as part of his or her job responsibilities) in accordance with federal, state and local law. Check with your state's department of motor vehicles to determine whether there is a system to notify you in case one of your drivers has his or her license suspended or revoked. In certain cases, enrolling your drivers in a notification system may be required.

Auto Insurance:

It is important for employers to ensure that the company has adequate insurance coverage. Typically, company-owned vehicles require commercial auto insurance. If employees are driving their own vehicles on the job, employers may want to ensure the company's insurance policy covers "non-owned" vehicles. In addition, employers may want to require employees who drive their own vehicles to maintain a certain level of insurance coverage on their personal auto policy and to verify coverage regularly (e.g. every six months or year).

Conclusion:

Regardless of the frequency in which employees drive, there are a number of considerations related to pay and safety that employers should be cognizant of. It is a best practice to address these issues in formal written policies and procedures and to provide appropriate training to employees who drive for work-related purposes.