So my husband took a new job about four months ago. The job entails driving around the North Texas area, installing high-tech machinery in machine shops that are anywhere from 10 minutes to three hours away from home, and training the employees there how to use them. When my husband was hired, he was told he would be required to drive around a lot, that he would make a base salary, and would receive a $450/month allowance for gas expenses. He does not get paid mileage, or for meals while he is traveling, etc.
I was under the impression that, when my husband took the job, all of his travel expenses would be paid (mileage, meals, etc.) and that the $450/month allowance (which was called a 'vehicle' allowance) was being paid to him in lieu of the company providing him a vehicle to drive (he's driving his own vehicle). There are times when he has to be out of town for a week or more, staying in a hotel, and acquiring huge food bills eating out, and that kind of thing, and all he is getting is $450/month.
He brought it up to his boss, and his boss told him that the $450/month was to cover gas only, and that if he spent more than that, his boss would reimburse all gas expenses, but he won't pay mileage or other travel expenses. The company does also pay for the hotel when he travels.
Okay... I'm thinking my husband needs to draw a harder line and tell his boss what's up. But I'm not really sure what the normal is. This is new territory for the both of us. Isn't it sort of unfair that my husband has to drive his own vehicle but isn't getting paid mileage?
What do you think? How do you think he should handle it? It's a small, family-owned company that contracts for a large corporation. There's only about six people who work for the company. BTW, the guy who held the position before my husband DID and DOES get paid mileage (he still works there and is a friend of my husband's).
SH.. that's not actually how sub-contracting works. I work for a broker. All of our clients are contract. They do NOT dictate how we pay our employees.
Also- By "huge food bils", I mean, if he's spending $7-$10 per meal (not including snacks- and my husband doesn't eat anything expensive), then he's spending $105-$150/week on food. He'd spend far less if he was getting his food in our kitchen.
At the very least, he should be keeping a record of his necessary expenses. Someone might be able to help me out and clarify this for you, but I think it's tax-deductible. Not helping per month right now, but if you itemize, it'll be nice come April.
I have worked several consulting jobs and every time that I traveled for work, all my expenses were paid. Usually I got either gas or mileage, but not both. I definitely got paid for my meals within reason. The job that I have now pays per diem based on the area that I travel to... It sounds like he needs to take a month and tally/document his expenses. Be reasonable...he should not be eating filet mignon every night for dinner. At the end of the month, he should show his boss what the actual costs for travel are...and request a per diem amount.
Don't take a hard line until there's another job lined up. Otw it's not a hard line, it's begging, and the end result is flip a coin on increase, nothing - but having ticked off his boss (no more 10 minute trips but ALL the long ones, just as an example, another is being passed over for promotion), or lost job.
To hard line, you need a bargaining position you're willing to take (aka leaving).
P r o b a b l y not a good idea for him to complain to his boss, or for you to encourage it.
He should have found all of this out before accepting the job!
If he wants another job, he can start looking.
He needs a paid off car, and he needs to find ways to take food, use the hotel fridge, coupons, etc.
The company should be paying for the hotels and gas. He can write off the other expenses on your taxes. If they did not offer a company car then it’s not likely he will get one now.
My hubby used to travel a lot for work (mostly flying) national and international and he used his company Amex card for food only if he took out the other people in his department for dinner all other meals he paid for out of pocket.
It is possible that the other guy getting paid mileage has been there for a while, maybe they changed how they pay now.
Added: Buy hubby a cooler that plugs into the ac adapter in the car and have him bring his food (they sell them in Wal-Mart). That will save you a lot and it is much healthier.
When your husband was hired, the employer made him an offer and your husband agreed to the terms of that offer. So unless something has changed, like he wasn't told he would required to stay overnight, then hubby really doesn't have anything to agrue about. It's not unfair, if that's what hubby agreed to.
Just another way to look at things, what if hubby only uses $200 a month in gas. He would still get the $450.
In general most companies that require travel in which you use your own vehicle will reimburse you at the IRS rate. I beleive it's about $.55 per mile (that rate includes, gas, wear the tear on the vehicle/maintenance and insurance). Meals vary, but usually the employer picks up a portion of the cost.
Any cost hubby incurs over and above the $450 per month can be claimed on your income taxes as unreimbursed travel expenses.
How should hubby handle it? He needs to keep track of all this expenses for the entire month. Keep all receipts and keep a milage log. At the end of the month, he can then take this information to his boss and renegotiate the terms of his employment.
Just another thought... why doesn't hubby take food from home? He could save a lot of money. (not for a full week, but for a few days)
That does not sound right to me. My hubby has been in outside sales for almost 30 yrs and we've had our own company over 3 yrs.
In the past he has been paid a base plus commissions PLUS 100% of travel and entertainment expenses. In the past he always had a company car and would submit all receipts for gas, lodging, rental cars, airfare, etc in for reimbursement.
With our company, I pay 100% travel and the only difference is that I pay mileage vs paying gas. The mileage rate I pay is based on the IRS at .555/mile. We drive our own cars.
If you look at the bottom line, travel expenses are huge, even if you don't do the seasons tickets for sporting events, entertain clients at high end places, etc.
Maybe your hubby could produce an excel sheet with ALL expenses related to this job and present it to the boss after 1 month or better yet.. do it for 1 week so you can see how much you are truly spending on travel expenses.
Ours range anywhere from $300 a week to $4000 a week, depending on what we are doing and paying for as in conferences, airfare, etc.
I don't know what your hubby's salary is but it sounds like a chunk of his salary is going toward travel expenses.
I've not read any of the other responses yet but small meals and snacks add up quickly, hotels and taxes do too.
Good luck
He could take a hard line and lose his job. Are you prepared for that? If so, and he feels right about it, he could say something. If not, he needs to hang in there and look for something else.
OK, your husband is being paid a base salary. His hotel is paid for. His gas is paid for, and if it is over $450, his boss will pay that too. So the only thing that you are having to pay for, is the car and food. I would personally not like to use my own vehicle for this sort of job, but your husband agreed to that when he accepted the job. I know lots of people that get paid mileage. It pays more. As for the food situation, your husband needs to learn to eat on a budget. Do you have HUGE food bills for him at home? I doubt it. Your husband is probably eating out every night, and possibly every meal, that he is gone. He has to stop that. Lots of hotels have free breakfast, and they have a fridge in them too. Utilize that. If this job is important to your family, he is going to have to learn how to spend less on the road. My husband travels every day, and he only eats home cooked meals, and we make lots and lots of good food for him to take with him. He takes a cooler with him, filled full of salads and cooked chicken and lots of fruits. And he drinks mostly water. I bet in one week, he does not even spend $5 out on the road for food or drinks. He says he wants to bring home the money for the family and not waste it out on the road. Just plan it out, and don't wimp out and say it takes too much time to do that. If you don't like something like that, maybe he needs to look for a different job. Good luck.
Oh, and if I were you guys, I'd keep my opinions to myself when it comes to your husband's friend, and how he gets paid. Recipe for end of friendship.
Also, when you file your taxes, you can file a per diem. Check that out.
Things may be different in Texas, but here in California, it's required that an employer cover wear and tear costs, and gas. (And if you don't employees are within their rights to sue, and they will win.) Typically employers use the IRS reimbursement rate, which is $0.55/mile. Some employers opt to do a standard car allowance plus gas - for instance, $300/month allowance, plus a company gas card. In that example, the $300 would cover oil changes plus depreciation of the vehicle. However, in our business (construction, where our employees drive all over half the planet to go to work in the morning), we choose to reimburse at $0.55/mile - and per the IRS, that covers both gas and wear-tear.
One thing I will point out about this is that we are not legally required to cover door-to-door in terms of mileage. CA state law allows us to deduct up to the first 60 miles of travel going to work, and coming home from work (so, we could deduct up to 120 miles per day, provided that the job site is more than 60 miles away from the employee's home). There are some additional laws around that, and it actually changes due to the type of work the employee is engaged in. (I know, confusing, right?)
The best thing you can do is try to find out what legal precedent there is in Texas, and go from there.
Your husband will get paid whatever he is able to negotiate. It doesn't hurt to document, do some research to find out what others at his company and in similar businesses receive for travel expenses, and ask for what he wants.
Anything that isn't paid for by the company might be tax-deductible. Talk to your acct and keep all receipts.
I work at a small family owned machine shop. We use the IRS standard mileage reimbuirsment rate which is 55.5 cents/mile. I don't know the legality of all this but since it's a small business, I would try to work with them. As Tracy said, keep track of the expenses and show them how it compares to $450/month. Good luck!
ETA: I think it's a given that all travel expenses should be covered - including mileage and meals. As others have said, at least save your receipts for tax deductions.
Definitely talk to the accountant and find out what he can take as a tax deduction. Also, find out if there's some other way to get paid for mileage, like maybe through petty cash.
Ultimately he may have to change his habits and/or look for a new job. My uncle is a truck driver and keeps a cooler. This provides many meals on the road without stopping for food at restaurants and he eats better than if he ate nothing but fast food. He can have an apple for a snack instead of a doughnut. He's also a frugal guy, so he was not eating well at all until he started carrying the cooler.
Gas reimbursement is in lieu of mileage - it's one or the other in most cases. He can write off expenses on his taxes that he was not reimbursed for - not sure what the limit is on that though, if any. Have him keep detailed records. Contact your tax person, if you have one, to confirm the reimbursement of the expenses but I know I have that option each year. It is odd that sustenance isn't reimbursed, he may need to clarify that specifically since it is not an expense he would have if were not out of town. Other than the food reimbursement, it sounds like everything else is reimbursed. Unfortunately, when you work for a small family run company, they just don't have the pockets as bigger companies do.That's kind of a trade off...
Sounds like your husband was told everything up front, before accepting the job. Unless I misunderstood what you wrote, he's going to have to just deal with it or find another job that's more fitting for him. Sorry you're going through this.
Car allowances for people that I know that have them mean that the vehicle allowance covers the car, maintanence, insurance, and gas (so everything car-related). So they do not get mileage on top of that. They do get reimbursed separately for meals if the travel is overnight.
I wouldn't think you would get both $450.00 per month AND mileage. I can see it being one or the other, BUT I would think you'd get gas too. Either $450.00 plus gas or mileage plus gas. The vehicle allowance or mileage should go toward wear and tear on the vehicle...NOT gas.
I knew there are laws on this type of thing, so maybe check on that. There are also laws on what one must be reimbursed for when traveling out of their "home area" and how that area is determined.
I've worked several traveling jobs... typically it's either or.... but not both.
The vehicle allowance is for the wear and tear, maintenance for the vehicle. It's basically like when you set your gas bill up for economy average..... they take your total gas bill from each month of the previous year and then average it out so you pay the same amount each month.
I would say $450 is *competitive* (I've had vehicle allowance that was $250 and I drove from Chicago as far as northern WI and central IL - so about 1500 miles or so per week) but I only know retail district management - so I'm not sure how it compares to the business your husband is in.
For mileage reimbursement, you *should* also have to claim stuff on his income tax, if he travels over a certain amount. This is usually the LEAST preferable way to manage travel. It also adds to his workload because he'll have to submit receipts / logs and wait for reimbursement.
If the other guy gets paid mileage, he probably doesn't get the vehicle allowance. And if he does the company is screwing themselves. That's like paying someone commission PLUS a bonus on the same sale.... it doesn't make sense from a business perspective.
I've never worked anywhere and had the vehicle allowance include my food per diem. As far as food expenses - he shouldn't be incurring HUGE bills eating out. There is a way to be reasonable. Your husband just needs to find it.
He needs to find out if the company has a travel policy in their HR paperwork. Even if they are small, they should still have the policy in writing.That might clear things up for him.
It sounds like he learned an icky lesson and didn't get all the details up front about how it "works". Now he's going to have to either re-negotiate, suck it up or find a new job. Uggggh
He should track what his costs are now - hold on to every single receipt.
I'm sure the company is happy with the money they are saving by not paying out what they paid the other guy.
He should ask his friend what he did to get the travel related costs covered.
He might not be able to negotiate a better deal.
As far as meals go, he can make his own sandwiches, take some apples or other fruit that travels well, pack things in a cooler and if the hotels he stays in don't have microwaves, he can bring a hot pot with him for a little bit of cooking in his room.
He can travel with a little picnic back pack - has dishes and real cutlery and is easy to take with you.
There are ways to cut down on his traveling food bills.
Standard is either gas or mileage, not both. He may be able to claim the mileage costs over and above his gas reimbursement as a business expense on his taxes. I'm super-tired and now and can't remember the nuances of that.
Regarding meals, I can see why that's not a covered expense. He has to eat regardless of whether or not he's traveling. A larger company might cover that but he's not working for a large company.
FWIW my husband drives for a living, seeing smashed up cars all day. He can deduct his mileage on taxes but does not get reimbursed for gas or mileage by the companies he works for nor do they cover meals. If he's gone overnight on a catastrophe team (following a big storm) then they'll pay for a cheap motel.
IMO your husband is not getting screwed. This is what he signed up for.
My sister, brother, and soon to be BIL work for a small family owned company that sounds just as shady as the one your husband works for.
They also do not pay mileage, but send their guys to work in NC from MD...they give them $75 total. Okay, that would cover the gas in my hybrid, but not in the trucks these guys need to drive to carry all of the materials down. They also give them $12 per day per diem. Government is MUCH higher than that. The owners purchased a small house in between the two job locations there and that is the sleeping accomodations they offer them - even if there are more people than beds. They tell them to bring sleeping bags. REALLY?!? I wish they would all quit, but they are normal and have bills.
I think your husband needs to be looking for a new job, because it doesn't sound right to me.
Most companies I have worked for pay mileage and per diem, plus hotels. If I didn't use my per diem rate, I could make money.
One company paid more than per diem, but we had to spend it - no opportunity to make money. But you can believe I ate WELL when I worked for them!
Okay, so he's getting $450 per month to buy the gasoline to drive to and from his appointments. He is getting his rooms covered when he has to stay in one area to take care of several things.
You are upset because he is eating out every meal during the time he is not at home? Right? I think that he can choose how he eats when he's out.
He could eat off the dollar menu at Mcdonalds. If his room has a mini fridge he can buy fruit and fresh veggies at Walmart and keep them on hand to fill out the menu and to snack on. He can eat a granola bar and an apple for breakfast instead of an egg McMuffin at McDonalds...just some ways I save money on meals when we travel.
I can feed my family of 4 at McDonalds for less than $20 ($17-$18) and get the kids Big Kids Happy Meals.
I also have bananas and other fresh fruit in the room. We hardly ever spend much on food eating out.
You are not spending that money on him in your home budget either, so you should not be spending that much money while he's gone. If he was at home he'd be eating too. It may be costing you more in the long run but he needs to be smart about what he's spending too.
I think that they told him when he took the job what he would be getting. It's up to him to spend less than they are giving him. If he took the job agreeing to those terms then he needs to suck it up if they refuse to look at his expenses.
I have had friends who traveled for work and they flew them there, put them in hotels, paid each meal at the restaurant of their choice, also paid for prostitutes, and paid them overtime for anything over the regular 40 hours they worked. My friend was very happy her husband chose to not select one of the ladies that showed up the first evening at the company's request to "take care of the guys".
The reason so many companies are implementing pay scales like this is that they get taken advantage of. For instance, someone mentioned Filet Mignon. He could eat out every meal like that and just turn in an expense voucher at the end of every trip. They would be stuck with it. Or would stick it to him. This way he eats what he wants when he wants and is in control of how much he spends.
Part of this expense is on him and part of it is on them.
I don't think that is unreasonable if they are paying his hotel and for gas and he is able to stay within the $450 then it sounds right, but I do think that the other guy getting paid milage is because he has been with the company longer and your husband just started, so maybe eventually if he stays there he will get the milage.
I don't see that he's being underpaid at all. Your husband was told up front how things work, and that's how things are working. So what needs to happen is you and your husband need to budget his menu better. He needs to not "eat out" and maybe learn to purchase and prepare simple meals while he's in the hotels/motels such as he would when at home. You could even pack a cooler for him for trips when he's gone for just a couple of days. Make sure he always brings his own drinks from home. If he MUST eat out at times, then clip coupons and find online coupons for places that will be on the way during his trips and he'll have to make sure that he only eats at those places. If he goes to grocery stores, make sure he uses the family grocery stores with the member cards and tries to buy on their sales. You can get duplicate cards to put on his key chain.
The guy who held the position before your husband has nothing to do with this, except that maybe they realized it was costing them too much to cover all of the on-the-road expenses and they decided that with the next person they simply couldn't afford to any longer.
Generally, a company provides either a vehicle allowance or mileage expense. Mileage typically is meant to reimburse all of the expenses you'd pay for with a vehicle, including gas. For example, I am paid 55cents per mile if I have to use my car for business purposes. I do not receive an additional amount for gasoline; the 55cents covers it. The only thing related to a car that would be over and above that mileage is paid parking and tolls. For those in our company who receive a vehicle allowance, that is intended to cover the cost of their lease/loan, any maintenance or repairs and any insurance expense. Gasoline is a separate expense.
In my experience, what your hubby should be getting:
one or the other....mileage OR vehicle allowance + gasoline
tolls reimbursed
paid parking reimbursed
Lodging expense when lodging is necessary (as determined by compan guidelines)
meals when out of town with loding required, except for those meals that would fall within the normal workday. So, basically, don't expense lunch, but breakfast and dinner is ok when staying out of town.
meals when out of town but not requiring lodging IF the meal falls within 2-3 hours or the normal workday. So, if he's on the job at 8a.m and ends up on a job that finishes up at 10p.m, then the company should pay for dinner.
If he is a full time employee then he should be earning 55 cents per mile which is supposed to cover gas and maintenance on the car. It is normal to also have the company reimburse hotel, tolls, and reasonable food expenses while traveling. $450 per month would be about 818 miles per month. Does he go more than that?
On another note, employers can not treat one employee one way and another a different way. There has to be one consistent policy related to travel expenses for the company. Executives may get additional perks, but you can't pay mileage to one employee and not to another.
Now - the reality is he has to handle it delicately because I assume he wants this job. One way to draw attention to the situation and get his boss to compromise is to defer all the jobs that are further away for awhile. Then when he gets asked about it, I would tell them that it simply isn't worth doing because of the reimbursement policy and he is focusing on jobs close to home. He can perhaps use that as an opportunity to explain that they really need to come up with a better all-caompany policy.
*Edit: at the companies I worked for, and for my friend, that is how it was.
And it depends on what industry, it is. The company I worked for, was not a "Broker." They subsisted, on getting contracts with companies. This was not sales or anything. The Organization who hired a company to provide a service to them, was their client. Not the other way around.
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The Company that has them on contract, pays a certain amount.
To the Company. Per the contract.
Then the company, decides how to pay their employees, per that contract and the stipulations in it. If the company, loses their contract, with that large corporation, then they won't have anyone to pay them.
The company your Husband works for, is getting their income, per that contract with the large corporation.
I really don't think the employer needs to give extra for food, since your DH is already given an expense allowance. Can't he bring his own food, or cook in the hotel room? Or bring items that can be refrigerated & prepared? 7-10 bucks a meal is RIDICULOUS and definitely could use some work.
Also, who is the one that's upset about this? Your DH, or you? Because I personally think that it's a really bad idea for a new employee to complain to his boss about how his expense account isn't big enough. And I really hope that you aren't one pushing your DH to cross the line with his boss. "Tell him what's up"? Really? Until your DH owns the company, he has no right, especially as a newbie, to tell anyone what's up. You have no idea why the other guy gets mileage, and there's probably a good reason for it.
I guarantee you there is someone waiting in line for that job, and who won't complain, and who will be just fine with the 450 a month. In a crappy job market & economy, I'm honestly surprised that you'd get upset about this. I think you should both be happy that he has a job. If he's not happy, then he is free to look for something with an infinite expense account & mileage.
