Business Travel Policy: A Five Step Guide

Creating an effective business travel policy from scratch can often feel daunting. Without a clear guideline, ensuring workplace travel protocols might seem like navigating in the dark. However, it's a crucial HR task that demands attention. By memorializing your company’s travel rules and processes, you ensure they're easily accessible and referenced by your team.

At Axcet HR Solutions, we recognize the importance of robust workplace policies for small businesses. In this article, I'll guide you through a step-by-step process to develop your own comprehensive business travel policy, turning existing processes into solid documentation.

1. Consider the “Why” Behind the Policy 

The first step in drafting your business travel policy is determining which goal or goals you’re setting out to accomplish. Aside from the obvious benefits of a travel policy (including its use as a reference point and compliance tool), think about what you’d like to achieve by implementing a thorough policy. Common objectives to consider are: 

• Cost-savings

  A travel policy can be instrumental in encouraging the judicious use of resources by employees. If cost-savings is a key goal, your policy can be crafted in a way that offers employees peace of mind in knowing what parameters are (i.e., hotel and flight cost limits, per diem amounts, etc.). 

• Safety

  Safety is top-of-mind for many small businesses, especially those in industries where accidents can happen if everyone isn’t aware of proper procedures. A comprehensive policy will include travel safety guidelines for employees, so workers can reference the policy at any point for clarity. 

• Customer service 

  If your employees travel for customer-service-facing reasons, such as delivery or customer transport, a travel policy is an absolute must. Your policy can strike a balance between outlining customer-service-focused rules and allowing employees to have controlled discretion to do what’s best for the company and its clients. 

You may have many objectives for your policy, and they may be interwoven. Use your collective goals to write a cohesive introduction that sets the tone for the entirety of the policy. 

2. Consider the “Who” Behind the Policy

It’s also important to know the “who” involved in the policy, or more specifically, the intended audience of the various provisions of the document. Some parts of the policy may apply to certain employees (i.e., separations may be made depending on exemption status, workers' full-time or part-time status, employees versus independent contractors, etc.).

Make sure the intended audience of each provision is clear in order to avoid confusion and compliance issues. It may be helpful to separate your policy into sections—especially if you have a clear delineation of policy application to different employee groups. 

RELATED: Understanding Business Travel Time Pay for Nonexempt Employees >> 

3. Know What Should be Included in a Business Travel Policy & Choose What Fits Your Needs 

The perfect travel policy looks different for every company. Your provisions reflect your unique industry, employee makeup, and workplace culture. There are a few common themes that repeat themselves among strong policies, however, and you might find them helpful to incorporate (with your own spin, of course). Consider the following: 

• Usage details for company, personal and/or rental vehicles 

  The details of these provisions will vary greatly between businesses, as each company’s operations involve a unique use of vehicles of various ownership statuses. It may be helpful to require employees to follow guidelines regarding the upkeep of vehicles, maintenance of driving logs and permitted hours of use. 

• Mileage reimbursement 

  Did you know that the Internal Revenue Service (IRS) mandates a minimum rate for mileage reimbursement? While the minimum rate is set at $0.655 per mile as of September 2023, the rate is subject to change and is periodically updated on the IRS website. You can incorporate this IRS-set reimbursement rate by reference, so it stays evergreen in your policy, even when it’s updated. 
  
  Employees should also be informed of the process for mileage logging, submission, and reimbursement. You may find it helpful to include a disclaimer in your policy letting employees know that any mileage reimbursement provided by the company is intended to cover fuel, vehicle maintenance and insurance, and depreciation costs. 

• Employee travel safety guidelines

  Regardless of your industry, you should issue basic travel safety guidelines for employees in your travel policy. While your policy should consider the specific circumstances unique to your company, you should, at minimum, incorporate a safety clause requiring that any employee driving any type of vehicle for work be fully licensed and insured in the United States; provide proof of such license and insurance to the company; inform the company immediately if their license is suspended or revoked; observe all applicable traffic, safety, vehicular and other applicable laws while driving; never operate a vehicle under the influence of drugs or alcohol; and never use an electronic device while driving. 

• Reimbursable vs non-reimbursable travel expenses 

  No matter your objective for creating a travel policy, your employees will benefit from having clarity surrounding which types of travel expenses are reimbursable and which are not. Just like anything else, any time you can set a reimbursement expectation beforehand, you’ll save yourself a dispute down the line. 

RELATED: Impaired Driving Accidents & Business Travel - Who is Liable? >> 

4. Combine Your Business Travel & Expense Policies to Form a Comprehensive “Employee Travel Expense Policy”

If your policy seeks to provide clarity surrounding reimbursable and non-reimbursable travel expenses, per diem amounts, and similar items, it may be worth considering combining your travel policy with an expense policy. An “Employee Travel Expense Policy” is a much more comprehensive way to think about travel and the process for employee submission of expense reports for reimbursement and review.

This may require collaboration with and sign-off from your accounting or finance stakeholders. 

5. Consult with HR Compliance Experts to Make Sure Your Policy Is Bulletproof

As you finalize your business travel policy (or travel and expense) policy, you’ll likely have countless compliance questions coming to mind. Compliance questions are good: They mean you’re thinking about and planning ahead for all the things you should be! Having a team of HR Compliance experts on your side can relieve those worries, and make sure that any compliance item that’s flying under the radar (whether federal, state or local) is addressed correctly. 

Axcet HR Solutions is happy to help. We’re an experienced and certified professional employer organization that understands safety, risk management and human resources compliance for small businesses. We’d love to help you handle your HR compliance tasks and more. 

With Axcet HR Solutions, you’ll find that there’s no end to the benefits a growing company can reap by working with a PEO. Wondering if outsourcing human resources is the right call for you? Reach out to our consultants today to learn more.