Cheapity, Cheapity, Cheap

I know what the IRS mileage rate is ($.55 per mile for 2009). My question is what is the LEAST amount I can pay an employee for mileage reimbursement? She hardly ever drives but needs to a couple times a month for client meetings. Can I pay ½ the IRS rate? Seems like labor law 2802 is very vague about this so I thought I’d come to your HR department since we don’t have one.

I so do not know the answer to this and furthermore, I'm not even going to attempt to look it up. So, you might ask, why am I bothering to even post about this?

Well, the title I've chosen might give you a clue.

If your employee is a good one, your attempt to save a few dollars will increase the probability that she will leave you for another job.

I know, I know, the economy is in the toilet, so you can treat your employees like--ummm, like toilet contents. (Okay, I've crossed into crude territory. I should stop now.) This is false, false, false. This is the time when you need to treat your good employees as well as you possibly can. Your good employees are going to be able to pull your business through tough economic times.

Everybody says, "there are no jobs out there!" True, there are fewer jobs available. But, fewer doesn't mean zero and your good employees are far more capable of finding a new job than your bad employees.

Let's say your employee has to go 100 miles month to meet clients. At the IRS rate of $0.55 per mile, that's $55 a month, or $660 per year. Do you want to have a disgruntled employee over $660 a year? Do you? Do you? Because while it's only a little bit of money, she'll complain about it--maybe not to you, but to her husband and her friends. And once you've decided there is something that annoys you about your boss, everything else begins to grate on your nerves.

And so, what if it's not 100 miles a month, but 1,000 miles a month. Is $6,600 a year worth having to find and train a new employee? This, by the way, is far more expensive than $6,600.

Stop trying to figure out how to be cheap and start figuring out how to maximize your employees' productivity. And remember, a happy employee is a good employee.