Posted on October 31st, 2019
Below is a complete transcript of this video.
What’s happening, fellow entrepreneurs? Today, I wanted to talk about reimbursement of business expenses to your employees.
This is one of those things that it just seems so small and unimportant that people forget about it. But, once an employee gets upset with you and then wants to sue you for something. They don’t have anything related to harassment, discrimination overtime, any of the usual.
Business expenses is one of those ones that they can get you for, because people just don’t think about it. So you have your assistant drive down the street to deliver something to a client or pick something up that the office needs.
Well guess what? You’re supposed to reimburse her for those expenses. Not only if she paid for whatever needed to be picked up from the store, but the mileage on her car.
You need to figure out, because it changes all the time, so I don’t want to state it here. But, there’s a rate that California requires that you reimburse for mileage. You need to figure out what that rate is, get the mileage, reimburse it.
Cell phones, laptops, there’s all types of equipment that your employee … It’s easy for your employee just to use their own and it really doesn’t cost them anything. For example, for unlimited minutes on their cell phone, what is it going to cost extra if they call the client from their cell phone or whatever, probably nothing.
However, what’s it going to cost you? A lot of money if you have to defend for not reimbursing. If they use their cell phone, if they use laptops, if they do anything like that, have a separate one that they use. Have a policy in place that says, “Use company equipment for company work. Use your own equipment for your personal things.”
If they make a claim, if they say, “Hey, I was using my cell phone all of these days or whatever.” Even though you don’t like it, pay it anyway. It just isn’t worth it. Then, write them up and say, “Don’t ever do this again. It’s against company policy and you can be terminated if you do it again.”
That way, you cover yourself. This few dollars here and there for not reimbursing expenses, it just seems like more trouble than it’s worth. But, at the end of the day, if this is brought up, it’s just going to cost you a ton of money, especially if it’s somebody that you terminate, because now you’re going to have wait time penalties.
So take my advice, separate business from personal equipment, and anything that they use that’s theirs personally, reimburse them as soon as you find out about it.
Oh, and most importantly, have a policy that doesn’t allow them to even do that. All right, fellow entrepreneurs, until next time, be productive.
