Question

An employer of 300 visiting nurses that provide hospice and in-home nursing care in a rural community is facing rising travel expenses. Currently, the employer reimburses its visiting nurses at a rate of .50cents per mile for all employment-related mileage. This particular employer routinely receives complaints from its staff that the cost to them as an employee exceeds their mileage reimbursement rates and often it is an issue that the employees site as a reason for their terminating their services. On average, each nurse logs approximately 10,000 business miles per year. Please analyze this situation and provide the employer with an alternative to the current mileage reimbursement arrangements for its employees that will be of financial benefit for both the employee and employer.

Answer 1

As per the current arrangement, the employer is providing a flat rate reimbursement of 0.50 cents per mile which is not sufficient for the employees for covering their costs.

The following Alternatives may be applied by the employer:

1. Increase the reimbursement rate per mile (IRS Mileage reimbursement rate in 2018 is 54.5 cents per mile)
2. The employer can enter into a contract with a Transport Agency to provide free transport facilities to the nurses whenever they travel for work. In this way, the nurses would not be incurring any personal expenses.
3. The employer could acquire a fleet of cars and hire drivers to drive the nurses for work related travel. This could substantially reduce the cost to the company and provide greater comfort and benefits to the nurses.