Business Travel Expense Policy
March 07, 2008
The Business Travel Expense policy outlines the provisions for travel and living expenses incurred by Company employees while on assignments away from the normal work location. It explains coverage, approval process, abuse of policy, nonemployee coverage, and reimbursement, among other provisions.
Subject: Business Travel Expenses
Example of: Standard Policy
This policy outlines the provisions for travel and living expenses incurred by Company employees while on assignments away from the normal work location. It is also designed to cover expenses incurred within the normal work location that are not considered normal living expenses.
The Company will assume or reimburse the employee for all reasonable business expenses incurred in carrying out work assignments. It must be emphasized, however, that these expenses should be on a conservative basis consistent with the employee’s normal living standards.
The trip approval form will be prepared and approved for all trips and entertainment expenses before the expense occurs. The trip approval form and expense report are formatted with the same categories. The total from the trip approval form must be transferred to the expense report form and the variances calculated. If a variance exists of $50 or more in any category, or $200 in total, the variance must be explained.
1. Hotel, car rental, restaurant or service charge items should be paid for by personal credit cards. Obtain receipts and secure reimbursements via properly completed expense report forms. Items not substantiated by receipts may be disallowed.
2. The Company will reimburse employees who travel on a frequent basis for the cost of maintaining one personal credit card (such as Diners’ Club or American Express).
3. The Company furnishes airline credit cards to employees who must purchase airline tickets for business travel. These cards may not be used for any other type of purchase. Telephone credit cards may also be issued.
a. Whenever possible, air travel should be arranged through airline competitive packages or booked on economy class.Used passenger coupons must be attached to expense report forms. Unused tickets, receipts, or credit slips for cancellations must also be attached. No-show charges billed to the individual or the Company are considered an expense of the employee and will not be paid for by the Company unless the charges were incurred due to circumstances beyond the individual’s control. A full explanation for the reservation cancellation should be attached to the expense report. Charges for changes in flights due to a personal decision of the employee are the responsibility of the employee.
c. The Company has a travel agency that it employs to make travel arrangements. Airline tickets purchased through this agency will be treated as advances to the employees incurring the expenses.
4. Employees traveling on Company business may obtain a cash advance.
a. A temporary travel advance of up to $250 may be obtained from the Accounting Department, provided the employee’s expense reports are current. Advances of over $250 must be approved by either the immediate supervisor and the assistant comptroller or the president and the comptroller. The employee will sign for the advance, which will permit payroll deductions for any portion of the advance not accounted for on the expense report.No more than one temporary travel advance will be issued to an employee at any one time. Each advance must be settled with the Accounting Department before another is issued.
c. Temporary advances require the approval of the immediate supervisor and the comptroller or assistant comptroller.
d. Employees who must travel frequently may arrange for a permanent travel advance with the approval of the immediate supervisor and the comptroller.
e. The employee must give the Accounting Department at least 1 day’s notice for the preparation of a travel advance whenever possible.
f. The employee must reconcile expenses against advances on the expense report. Accounting will advise the employee if there are any discrepancies.
5. When an employee travels overnight by rail, charges should not exceed room occupancy. Day travel by rail should be limited to coach fare except under unusual circumstances. The used passenger coupons or receipts obtained from the ticket agent must be attached to the expense report.
6. Reimbursement for use of private automobiles will be at the rate of 32.5 cents per mile. This amount will be adjusted based on the amount allowed by the Internal Revenue Service. All charges for auto mileage must be fully explained in the expense report by showing miles traveled and routes covered. Reimbursement will also be made for parking, tolls, etc.
The use of a personal automobile is voluntary. The Company does not provide insurance for personal vehicles. Employees must carry personal automobile insurance in accordance with state law. Please refer to the policy regarding use of personal vehicles for more details.
a. Company-leased automobiles shall be used only for Company business. The employee will only be reimbursed for the required operating expenses, such as gas, oil, lubrication, parking, and tolls. Should any question regarding major repairs arise in an emergency, the designated administrator at the home office should be contacted immediately.Rental automobiles should not be used when less expensive transportation is available. Proper explanation and receipts must be attached to the expense report. Additional insurance coverage that is offered by the rental agency should be declined. Generally, smaller, less expensive vehicles should be selected.
7. Miscellaneous expenses:
a. Taxicabs should be used only when less expensive transportation is not available, when it is less expensive than a rental car, when heavy baggage is moved, or in emergency situations.Tips and gratuities should not be listed separately (unless they are unusual) on the expense report, but should be included in the cost of the related items. Tips should not exceed 15 percent of the cost of the service. Attach explanations of unusual tipping charges.
c. Telephone charges above $5 must be explained on the expense report. Reasonable calls to the employee’s family are allowable.
d. Local, state, and federal tax charges should be included in the items to which they apply.
e. The employee will be reimbursed for reasonable meal expenses. Breakfast will be reimbursed if the trip commences prior to 7:00 a.m., and dinner will be reimbursed if the trip is completed after 8:00 p.m., including travel time to and from the railroad station, airport, etc. Employees will be reimbursed for a maximum of three meals per day. Meals provided for business associates must be fully explained.
f. The Company frowns on lavish entertainment of business associates and customers. However, it feels that there are times when employees should take advantage of reasonable opportunities to socialize for business purposes. All entertainment expenses must be fully explained on the expense report. When employees are entertained, the highest level person in the group must pay and submit the expense report.
g. The employee’s immediate supervisor must approve home entertainment expenses in advance.
h. When an employee is on a trip that lasts 7 or more days, reasonable laundry and valet costs will be reimbursed if documented by the proper receipts.Personal expenses, such as evening beverages, cocktails, movies, newspapers, magazines, haircuts, etc., will not be reimbursed, but a $2 per day miscellaneous charge may be added to the expense report to cover such items.
8. The Company expects the employee to stay at a hotel that is reasonably convenient to the place where business is to be transacted. Generally, the hotel must be on the approved list maintained by the travel agency. Charges for reservations guaranteed but not used will be reimbursed only if the failure to use the reservation was due to reasons beyond the individual’s control. Proper receipts must accompany the expense report.
9. If the employee charges travel expenses to a personal credit card and then receives a rebate from the credit card company, the value of the rebate attributable to company-reimbursed expenses must be turned into the Company. Employees may retain “points” used for personal air travel.
10. Expense reports must be completed by the individual actually incurring the expense. For example, if one employee obtains two tickets, and another employee uses one of the tickets, both employees must prepare an expense report.
11. All employees who receive reimbursement for travel expenses are required to complete a form authorizing the deduction of the overpayment of any expenses from future expense reimbursement checks, wages, and vacation pay.
12. Employees may not entertain clients or be entertained by clients at sexually oriented facilities. For example, topless bars, ladies’ clubs, gentlemen’s clubs, and the like may not be used for entertainment.
13. Employees eligible for overtime pay must maintain records of their travel hours in accordance with the overtime rules. Employees eligible for overtime will be compensated for travel time in accordance with the Fair Labor Standards Act.
In the case of a group coming to headquarters for training, a meeting, etc., a meeting direct bill approval form must be prepared and authorized by a director and a vice president before the trip.
Direct bill approval forms, individual and group, will be sent to the assistant comptroller.
All tickets received from the travel agency will be checked for charging to individual credit cards. If they were not charged as such, or if a direct bill approval form was not received, they will be returned to the travel agency.
Abuse of Policy
If the Company’s travel policies and procedures are abused, the Company reserves the right to charge per diem expenses on an individual basis.
Expenses incurred during preemployment interviews or other preplacement activities by nonemployees are reimbursable if they are reasonable and in direct relation to the position for which the individual is being interviewed. The comptroller’s approval must be obtained in advance for such expenditures.
Nonemployee travel expenses must be substantiated by expense reports, receipts, etc. The preceding guidelines apply to nonemployee travel as well.
Employees may be temporarily assigned to report to a headquarters or jobsite other than their normal headquarters. When such assignments are for periods of a minimum of 3 or 4 days’ duration, the expense plan described hereafter will normally be applied. When employees are temporarily assigned to report to a headquarters or jobsite other than their normal headquarters, they will receive an allowance in accordance with the following table:
Table of Allowances
l. If the one-way distance between the normal reporting headquarters and the temporary reporting headquarters or jobsite is less than 35 miles—$15 per day
2. If 35 miles, but less than 50 miles—$24 per day
3. If 50 miles, but less than 70 miles—$28 per day
4. If 70 miles and over—$32 per day
The preceding allowances are based on the assumption that employees will make their own arrangements for meals and lodging and will report directly to the temporary headquarters or jobsite.
In those cases where employees report to their normal reporting headquarters on the first day of such assignment each workweek, are provided company transportation on Company time to the temporary headquarters or jobsite, and are similarly transported back to their normal reporting headquarters on the last day of such assignment during each workweek, the preceding allowance will be reduced by $3 on the first and last day.
Allowances offered under this provision are considered to include full compensation for breakfast, lunch, and dinner, except in the case of actual work extending one and one-half hours or more beyond the end of the normal schedule.
This policy will not apply in any case where a supervisor elects to make assignments to other work locations on a basis other than those previously specified. Examples of such assignments include any time when transportation, travel time, or meals or lodging are provided, whether or not the employee elects to make other arrangements. In any 1-day assignments, employees are expected to make their own provisions for the noon meal without recompense.
Mileages used in the application of the preceding will be stated in the “Approximate Mileage” table of the official state map and as measured on primary and secondary roads of the same map.
The following car sizes must be used depending on the number of travelers.
Size of Car: Economy Number of Travelers: 1
Size of Car: Compact Number of Travelers: 2
Size of Car: Intermediate Number of Travelers: 3
Size of Car: Standard Number of Travelers: 4
In snow or ice, however, a car with front-wheel drive should be used, even if it is not the size allowed. The rental car must have a full tank of gas when returned to the rental agency. The Company does not provide insurance coverage for any employee who uses his or her personal auto for business purposes.
If the employee encounters any discrimination in public accommodations while traveling, he or she should report it immediately. For example, if a hotel or restaurant is not in compliance with discrimination laws, the Company will cease doing business with that hotel or restaurant.