Mobile Workforce Guidelines

The construction industry, by its very nature, depends on mobility and getting to where the projects are located, whether that is across a city or region, state, or country. Costs related to mobility are unique and there are various methods of covering or reimbursing your workforce for those costs. The methods you use and your compliance with the related regulations can impact the ultimate cost to your organization as well as your employees and the difference can be significant.

Accountable vs. Non-accountable Plans

Contractors with employees working in various locations often results in those employees incurring some out‐of‐pocket business expenses. A contractor can either reimburse an employee for actual travel and business expenses or pay the employee a per diem or other expense allowance. The treatment for both the employer and employee of these reimbursements or allowances depends on whether the arrangement is an accountable plan or a non-accountable plan.

Commuting Costs  

Construction companies may reimburse travel expenses as either local transportation costs or travel requiring overnight stays. Determining business vs. commuting travel can sometimes be difficult. To make this determination, there must be an establishment of the employees’ workplace. Under the IRS rules an employee can have a Regular Workplace, Temporary Workplace or Multiple Workplaces. Evaluating the category the employee fits into will help determine if and how much of their mileage and travel expenses (i.e. meals and lodging) will qualify as travel or commuting.

Company-Provided Automobiles 

If an employee’s business‐related travel is extensive, a contractor may determine it is more cost effective to provide the employee with a company owned automobile vs reimbursement for use of their personal auto. All expenses the company incurs related to the ownership and operation of the automobile are deductible by the company; however, the IRS requires the value of the personal use to be included in the compensation of employees. The IRS allows various methods for the calculation of the personal use of company automobiles. Companies must determine how to handle the personal use of company‐provided automobiles. As with other travel related deductions, the qualified business use is required to be substantiated.

Company-Provided Lodging

Contractors may also provide housing or lodging for employees that is deductible as a business expense and excluded from the employee’s income provided certain criteria are met.

Depreciation

Contractors have gotten familiar over the last few years of the ability to take 100% bonus depreciation on new and used fixed assets put into place by the Tax Cuts and Jobs Act (TCJA). Starting in 2023, bonus depreciation began to phase out to 80% and continued to step down to 60% in 2024 and 40% until Jan. 19, 2025. However, the One Big Beautiful Bill Act reinstated 100% bonus depreciation permanently for assets placed in service after January 19, 2025.

HTB delivers an unparalleled level of experience serving the construction industry. Contact us today to discuss how we can serve your business needs and mobile workforce strategy.