Quality healthcare can no longer just be found in hospitals, clinics, nursing homes or other care facilities. Everyday, thousands of Americans receive visits from home health aides in the comfort of their own homes. These patients may be recovering from surgery, going through chemotherapy, dealing with chronic illness and disabilities or requiring assistance with daily tasks such as cleaning and grocery shopping.
Everyday, home healthcare (HHC) workers rack up miles on the road ensuring that their patients are cared for and their needs are met. But what happens to these miles? Are you reimbursing your employees for their work-related travel? If the answer is no (or yes, but you lack a formal home health mileage reimbursement program), you’re missing out on several key benefits, both for your employees and your organization.
The Basics: Home Health Mileage Reimbursement
A mileage reimbursement is a payment you give to your employees that is calculated based on the number of miles they drove for work. Each year, the IRS announces a standard mileage rate (for 2020, it’s $0.58 per mile), that taxpayers can use to determine the cost of a reimbursement. Employees keep contemporaneous mileage logs of their trips and use these to submit expense reports for each pay period.
There is no federal law that says you have to reimburse mileage at the IRS standard mileage rate or that you have to reimburse mileage at all. However, some states do have their own laws on the books mandating it. Even if you aren’t legally required to issue a home health mileage reimbursement, it’s still a good policy to have a mileage reimbursement program in place.
The Many Benefits of Mileage Reimbursement
Just because there is not necessarily a law requiring mileage reimbursement, failing to appropriately compensate employees for this expense could have serious consequences. If you don’t pay them at all for work travel, or if you pay them too little, this will put your company at risk of violating labor laws and open you up to litigation.
For instance, if you have employees who work at or near the minimum wage and you don’t reimburse their travel, these uncompensated expenses could push their wages too low. There have been several class-action lawsuits in the past on this very issue. In one case, Domino’s Pizza delivery drivers were being paid a flat $1 per-delivery fee. They claimed they were being underpaid by $1.30 per delivery and $3.25 per hour.
The cost of dealing with possible lawsuits will ultimately be much more expensive than simply providing a proper home health mileage reimbursement to your aides.
If you aren’t reimbursing mileage, but you have recognized that your HHC workers should be compensated in some way for their travel, you may have turned to other solutions such as a car allowance or investing in company cars.
A car allowance is a set amount that you give to your employees to cover a period of time; it’s intended to cover typical costs of owning a vehicle, such as maintenance, wear-and-tear, insurance, fuel and depreciation. Factors such as distance traveled for work do not change the amount from month to month. Company cars can be a great perk for potential employees on top of giving you extra control. However, company cars cost a lot of money to maintain and open you up to liability should your vehicles be in an accident.
Unlike other options, mileage reimbursement is completely dependent on how much your employees travel. A car allowance is the same no matter what, and company cars come with fixed costs you’re always responsible for paying.
If you don’t have a system in place to reimburse mileage for your employees, then you’re basically operating in the wild west. Many employees may not even be aware that you will cover these expenses, and for the ones that do, there aren’t any rules to help the process along. When do they submit expense reports? Who do they go to? Who reviews them to make sure everything checks out? How are employees supposed to fill out mileage logs? Without standardized processes in place, you’re likely losing thousands of dollars each year as people inaccurately document mileage, rounding up or estimating trip distances or including travel that never happened or wasn’t work-related into their totals.
When you start providing mileage reimbursements, they come with the benefit of learning the routines of your workers: how many patients they visit a day, how long a visit lasts on average, what routes they take, etc. Data like this will allow you to discover what works best in your organization, and identify and make changes as necessary such as routes that will be more beneficial to patients and aides.
Make Everyone Happy
While you don’t need to reimburse for mileage driven for work, it’s a good practice that makes everyone happy. A reliable reimbursement program increases employee satisfaction, productivity and loyalty. If employees have to use their own vehicles for their jobs, knowing that they will be compensated makes them more likely to make that extra stop and go the extra mile.
An effective home health mileage reimbursement program brings your company many benefits, and when that program includes SureMileage by CompanyMileage, those benefits only grow. Our novel software solution calculates trip mileage for employees, so they can focus on their jobs and less on keeping track of odometer readings. At the end of the day, they simply submit their trips, and our system handles the rest. Our customers also use SureMileage as an opportunity to learn more about their mobile workers.
If you’ve decided it’s finally time to enact a home health mileage reimbursement program, request a demo with CompanyMileage today to learn how to do it the right way.