Do your company’s travel policies meet employee needs and keep your budget under control? Maybe it’s time to refresh them.
What’s in your company travel policy?
If it’s been a while since you reviewed it, or if your company doesn’t have a travel policy yet, now may be the time start thinking about it.
Here are half a dozen steps you can take now to build or refresh your organization’s travel policies to ensure that they meet employees’ needs, comply with any state laws that apply and keep your budget under control.
1. Decide what expenses your company will cover.
The typical company travel policy covers the costs of transportation and related expenses, including:
- Travel time
- Fares for flights, train rides and ground transportation
- Auto rental fees, tolls and parking
- Lodging costs
- Meals while traveling
- Costs for entertaining clients
Each company can set guidelines and, in many states (see below), limits on the total expense per day or per expense category. For example, you might have a limit of $50 per day on meals for traveling employees, or rules about what types of hotels they can book — a four-star versus a five-star, perhaps.
However, try to avoid setting a one-size-fits-all policy. Make sure your policy takes context into consideration.
For example, a senior leader who is entertaining executives from a potential client may need to spend more on a dinner meeting than the typical sales team member would while they’re on the road.
2. Spell out what’s not covered.
Even though it should go without saying, you can state clearly that personal expenses and expenses that go over the limits you’ve set are not covered.
Because it’s illegal for an employer to request employees’ personal credit card statements, you can avoid uncertainty about expenses by issuing your regular travelers a corporate expense card.
Similar to a corporate credit card, a company-issued expense card automatically adds each transaction to your expense management system, where you can review them to make sure they’re legitimate.
3. Know the state laws that may affect your travel policy.
In most states, organizations can set their own caps on per diem expenses and decide whether they want to require employees to submit receipts to document their travel expenses. However, companies operating in California and Illinois, for instance, must follow those states’ laws about per diems and receipts.
For example, employers in California can’t deny reimbursement for an employee travel expenses solely because the employee doesn’t have a receipt.
Employers in California and Illinois also can’t set a hard cap on the cost of meal reimbursement for traveling employees, because laws in those states require reimbursement of all reasonable and necessary business expenses.
That doesn’t mean that your hands are tied when it comes to setting expectations for the kinds of expenses your traveling employees can incur. You can set guidelines and require that employees get written approval before spending more.
4. Let employees use the travel points and miles they earn on the job.
Employees who travel frequently can rack up lots of airline miles, hotel points and other travel perks. Letting them use those benefits for their personal travel is a way to reward them for the time they spend on the road and in the air. That way not only are they collecting a paycheck for their business trip, but they’re also accumulating points toward their next vacation.
If their schedule and your budget allow, giving employees some “downtime” during their trip can help make up for the hours they spend away from home. This gives them a chance to explore a new city or unwind between the journey and meetings.
5. Write down the details.
A travel policy is a communication tool that can provide clarity for employees on the road and avoid confusion after their return.
In addition to your company’s spending caps for daily food, lodging and client entertainment, be sure to outline every procedure and process you expect your traveling employees to follow. For example, you may require your employees to:
- Get authorization before booking business travel.
- Book business trips through your company travel site.
- Purchase the lowest available fare on work-related flights.
- Follow company travel safety procedures, such as identifying emergency contacts in advance when traveling abroad.
Your travel policy should be part of your organization’s employee handbook. That way when each employee acknowledges the handbook, you have their word that they’ve read and will follow the policy.
6. Set a schedule to review your travel policy
It’s a good idea for companies to review and update their travel policy at least once a year, to account for changes in travel costs and any new laws that take effect.
Here are a few examples of questions you should ask when reviewing your company’s travel policy:
- What is the current cost of travel? Does your budget and policy allow for the necessary expenses?
- Are your employees getting what they need when they travel? For example, are ground transportation, coworking space, and Wi-Fi expenses factored into your daily expense limits?
- Have there been any changes to the way you expect your employees to book their trips?
- Have there been any issues or employee complaints that might change your policy or procedures?
By answering these questions, you can update your company travel policy to accurately reflect your current business needs and budget.
Of course, events within or outside your company can force quick changes to your travel policies. For example, a disease outbreak, natural disaster, or other crisis could restrict cross-border travel to some areas, or even limit domestic travel.
In those cases, it’s important to update your employees via email or through your company intranet, so everyone understands:
- What changes have taken place.
- What new rules and guidelines are in effect.
- Who employees should contact if they have questions.
With a clear, compliant travel policy in place, you can set your employees up for success on the road while managing costs and avoiding unexpected expenses.
Want to learn more ways your organization can benefit from creating policies? Download our complimentary e-book: 7 most-frequent HR mistakes and how to avoid them.