Navigating Travel Pay Challenges: Payroll Best Practices for 2025

Overview:

The landscape of travel pay in the United States is continuously evolving, with payroll professionals navigating an intricate web of federal and state regulations in 2025. Consider a scenario where an employee is sent on a multi-day assignment to a different region—are they entitled to compensation for travel time? What about time spent waiting due to unforeseen delays? How do you accurately track and reimburse expenses, including meals, accommodations, and local transportation, while ensuring compliance with IRS guidelines for accountable plans and applicable labor laws? The growing prevalence of remote and hybrid work arrangements further complicates these issues, as employees are more geographically dispersed than ever before. These challenges, if not managed correctly, can lead to costly compliance errors and employee dissatisfaction.

Another common dilemma arises when employees use their personal vehicles for work-related travel. Determining the correct mileage reimbursement rate and distinguishing between deductible business expenses and taxable commuting benefits is critical. Misclassifying these expenses can result in significant tax liabilities for both employees and employers. Additionally, the rise of "digital nomads" and employees strategically relocating for tax advantages—often referred to as "tax turtles"—introduces another layer of complexity. Understanding an employee's "tax home" and the applicability of the "One-Year" rule is increasingly challenging, requiring a thorough grasp of IRS regulations and their evolving interpretations.

In 2025, travel pay practices are under heightened scrutiny from the Department of Labor and other regulatory agencies, with investigations into potential Fair Labor Standards Act (FLSA) violations on the rise. Companies found guilty of misclassifying employees, failing to properly compensate for travel time, or mishandling expense reimbursements face significant fines and back-pay orders. Moreover, the increasing emphasis on employee rights and fair compensation means even minor errors in travel pay can lead to diminished employee morale and costly legal disputes. Payroll professionals must stay informed about these evolving regulations and implement robust systems to ensure accurate and compliant travel pay administration.

Further complicating matters are questions surrounding "on-call" time and "waiting time" during business travel. For example, if an employee is required to be reachable by phone during a layover, are they considered to be working? If they are simply waiting, free to use their time as they please, does this affect overtime calculations? These nuances have a significant impact on payroll costs. Another concern is handling meal expenses during travel, particularly when employees entertain clients or attend conferences. Are these expenses fully reimbursable, or do IRS rules impose limitations? Given the competitive job market, ensuring compliance with travel pay regulations can be a key factor in employee retention and overall satisfaction.

This webinar will provide practical guidance on navigating the complexities of travel pay in 2025. The speaker will clarify IRS interpretations, address ambiguous FLSA provisions, and offer best practices for tracking, documenting, and reimbursing travel expenses. Attendees will gain the knowledge and confidence needed to manage travel pay effectively, mitigate compliance risks, and ensure their organizations remain compliant with evolving regulations.

What you will learn:

By attending this training session, you will learn:

• What is considered bona fide travel by the IRS
• The IRS rules for transportation expenses: mileage, car rental, airfare, hotel, meals, and entertainment
• Which employees are entitled to travel time pay
• How and when to compensate an employee for travel time away from a work site
• How to communicate the rate of pay and the requirements of travel
• The travel tracking necessary to compensate the employee properly
• What are the accountable plan rules as they pertain to travel expenses? How quickly must receipts be provided by an employee? How often do expense reports needs to be submitted?
• What is considered a wage or a taxable commute benefit?
• The IRS guidelines regarding commute costs
• "Breaks in service" allowing travel expenses to avoid reclassification as wages?
• The concepts of "co-locating" and "tax turtles" also will be addressed
• The "One-Year" rule: Is there such a thing as breaking residency and restarting the reimbursement clock?
• Typical problems that arise with travel and other FLSA issues, such as meals during travel

Why should you attend?

This webinar is essential for professionals seeking to effectively navigate the complexities of travel pay compliance. By participating, you will gain a comprehensive understanding of the latest IRS regulations and FLSA provisions, equipping you with the knowledge needed to manage travel-related compensation confidently and avoid costly compliance errors.

The session will provide practical insights into tracking and reimbursing travel expenses, such as meals, accommodations, and transportation, while ensuring compliance with IRS guidelines for accountable plans. This is especially crucial in today’s landscape, where remote and hybrid work arrangements have made travel pay administration more complex than ever.

Additionally, the webinar will address common challenges, such as distinguishing between compensable travel time and standard commuting, as well as understanding the tax implications of various travel-related expenses. Mastering these concepts will enable you to implement best practices that enhance compliance and operational efficiency within your organization.

With increased regulatory scrutiny on travel pay practices, staying informed is not just beneficial but necessary. This webinar presents an opportunity to gain valuable knowledge, ensuring your organization remains compliant with evolving regulations while supporting overall business success.

Who will benefit?

This webinar is designed for professionals responsible for managing and overseeing travel pay compliance within their organizations. Professionals include

• Payroll Managers
• Human Resources Directors
• Compliance Officers
• Finance Managers
• Corporate Travel Managers
• Business Owners
• Compensation and Benefits Manager
• Employee Relations Manager
• Accounting Manager
• Tax Manager
• Administrative Services Manager
• Training and Development Manager