Why a corporate travel alcohol policy is essential
It's pretty common to see drinks and business go hand in hand—whether it's closing a deal over a glass of wine or celebrating a successful day with a round of cocktails. In many corporate settings, alcohol is mostly a given during business dinners and events. However, without a clear corporate travel alcohol policy, this common practice can quickly spiral into a host of issues. What starts as a casual drink can lead to inconsistent expense claims, unprofessional behavior, and even legal trouble.In this guide, we help you create a corporate travel alcohol policy that safeguards your business while allowing your team to enjoy social interactions responsibly.What to include in your travel alcohol policy?
Corporate travel policies outline a business's preferences for employee travel arrangements and related expenses. From the moment an employee books their flight to the time they submit their expense report, every step of the journey should be guided by clear and precise instructions.When it comes to travel expenses, your policy should leave no room for confusion. Whether it’s specifying the class of airfare that different levels of management are permitted to book, or detailing allowable meal expenses—every guideline needs to be thoroughly outlined. Clarifying the process for mileage reimbursement is equally important. For example, if senior executives are allowed to fly business or first-class while other employees are expected to stick to economy, this distinction must be crystal clear in your policy. This will help avoid any misunderstandings or disputes.1. Setting alcohol boundaries
The first step in crafting a corporate alcohol policy is determining whether to permit alcohol consumption during office hours and business trips at all. Striking the right balance can be challenging. A policy that’s too lenient could lead to employees becoming inebriated and finding themselves in potentially dangerous situations. On the flip side, a policy that’s too strict might make team members feel disrespected or stifled. Ultimately, the decision should reflect your company culture and the nature of your work.Opting for a policy that encourages employees to stick to non-alcoholic beverages is certainly the safest, most cost-effective, and least risky approach. However, this might not sit well with employees who consider themselves responsible drinkers and expect to enjoy an alcoholic beverage at work events.An honest discussion with human resources and other key decision-makers can help decide what approach is best for your organization.2. Reimbursement guidelines
When creating a reimbursement policy for alcohol expenses during business travel, it's essential to align with Internal Revenue Service (IRS) regulations to ensure compliance and avoid any issues with tax deductions.Here are some key IRS guidelines to consider:- Deductible alcohol expenses: The IRS allows alcohol expenses to be deducted if they are "ordinary and necessary" business expenses incurred during business travel. However, only 50% of meal and alcohol expenses can generally be deducted, provided they are not "lavish or extravagant" based on the circumstances.
- Documentation requirements: Employees must provide detailed receipts that clearly separate the cost of alcohol from other expenses. These receipts should include information about the business purpose of the meal or event where the alcohol was consumed. Proper documentation is crucial to justify the expense and ensure it's eligible for tax deductions.
- Accountable vs. nonaccountable plans: If your company reimburses alcohol expenses under an "accountable plan," where employees provide receipts and justifications, the reimbursement is not considered taxable income. However, if the plan is non-accountable, the reimbursement could be treated as taxable income to the employee. This means, the employee should pay from out of pockets.
- Per diem rates: Some companies opt to use per diem rates for meal expenses, which include a set amount for meals and incidental expenses. These rates are established by the General Services Administration (GSA) and vary by location. If you use per diem rates, any alcohol expenses would need to be included within these limits.
- Limits on alcohol expenses: Setting clear limits within your policy can help manage costs and ensure compliance with the IRS's 50% deduction rule. This might involve capping the number of drinks that can be reimbursed or setting a maximum dollar amount per meal.
3. Acceptable drinking conditions
When do you consider it acceptable for an employee to drink alcohol? These guidelines should help maintain professionalism, ensure safety, and respect cultural norms. They should also protect the company's reputation and relationships with clients and partners.Here are a few aspects you can include in your alcohol policy:- Business-related events: Alcohol consumption is permissible during client dinners, networking events, and official company functions. These are settings where having a drink or two can help build relationships and foster a relaxed atmosphere. However, the expectation is that employees will drink moderately—typically limited to one or two drinks—to maintain their professionalism and focus on the business at hand.
- Timing considerations: Alcohol should only be consumed after the completion of all work-related activities for the day. Drinking during business hours, particularly before meetings or during work tasks, is discouraged as it can impair judgment and reduce productivity. This approach ensures that employees are always performing at their best during critical business interactions.
- Appropriate locations: Drinking should be confined to appropriate settings, such as restaurants, bars, or event venues. It's advisable to avoid consuming alcohol in informal or isolated settings like a hotel room or while in transit, where the context may be less controlled.
- Legal compliance: Employees must adhere to the alcohol regulations of the location they are visiting. Even if local laws are more lenient, employees should consider the expectations set by their home country’s regulations. For example, an American employee under 21 should not drink alcohol during business travel, even in countries where the drinking age is lower.
- Cultural sensitivity: Employees should be aware of and respect cultural attitudes toward alcohol in the region they are visiting. In some cultures, alcohol consumption may be an integral part of social interactions, while in others, it may be frowned upon or even prohibited. The policy should provide guidance on how to navigate these cultural differences, so employees remain respectful and appropriate in all social settings.
- Non-alcoholic options: The policy should emphasize the importance of offering non-alcoholic options at all business-related events. This ensures inclusivity for employees who choose not to drink due to personal, health, or religious reasons. It also reinforces that alcohol consumption is not expected or required, allowing all employees to feel comfortable and included.
Achieve 100% compliance on travel policies with TravelPerk
Incorporating an alcohol policy into your overall corporate travel guidelines is essential to ensure safety, professionalism, and compliance during business trips. Although important, alcohol policies might not get the attention they deserve due to the many moving parts involved in managing business travel.By automating compliant booking with TravelPerk, you can streamline travel management and free up time to focus on enforcing other critical aspects of your travel guidelines, such as alcohol policies.TravelPerk allows you to create and customize travel policies in under two minutes, integrating them directly into the booking and approval process. The platform’s built-in compliance features ensure that your guidelines are adhered to while giving travelers the autonomy to manage their bookings without unnecessary micromanagement.?)
?)
?)
?)
?)
?){kind=icon}
?){kind=icon}