Brian Schaaf knows a lot about restaurant delivery driver reimbursements. He became an expert the hard way - suffering through a grueling Department of Labor audit of 2 years worth of delivery payments to drivers for his multi-unit restaurant franchise. Now, Schaaf has taken that knowledge and turned it into software to help other delivery-focused restaurants avoid the pain he went through.
Most restaurant owners look at delivery fees as “I’m just passing along most of what the customer pays to my driver.” But the government doesn’t look at it that way. If you don’t adequately reimburse the drivers enough to cover their vehicle expenses, you could be violating the Fair Labor Standards Act by not paying minimum wage. Conversely, if you pay them too much, the excess could be considered taxable wages subject to payroll tax and income tax.
Watch our virtual interview video below to learn more about delivery fee reimbursements.
The first key to keeping it legal is to track the mileage your employees are driving for your deliveries. Luckily, with Thrive POS, you can track and record mileage (as per Google maps) for each trip. This goes a long way to helping you keep the documentation needed in case of an audit.
If you are currently paying your drivers a flat fee per delivery, or a % fee, you can then look at the total fees paid vs. the total miles driven to determine what your effective per mile reimbursement rate is. Is it higher or lower than the IRS standard? (56¢ / mile in 2021).
How do you know if the rate you are paying is adequate to cover your driver’s vehicle expenses? If it's not, any shortfall could mean you are paying drivers less than minimum wage. This is where Shaaf’s company, Mileage Scout, comes in.
Mileage Scout is software that helps you accurately calculate and document the appropriate mileage reimbursement rate for each driver, based on their individual vehicle data. In Schaaf’s case, he was able to pay an average of 33¢ per mile, and get this approved by the Dept. of Labor as an appropriate rate. That 23¢ per mile can add up over a year’s worth of deliveries!