Payroll for a field service crew is more complicated than a standard office payroll, and the mistakes we see most often come from treating it like it isn't. Overtime rules, per diem payments, and travel time all have specific requirements that trip up trades businesses regularly.

Overtime is the one that causes the most exposure. Under federal law, non-exempt employees are owed one and a half times their regular rate for hours worked beyond 40 in a week, and that regular rate has to include certain types of additional compensation, not just base hourly pay. If a tech earns a bonus or commission on top of hourly wages, that can affect how overtime should be calculated for that pay period, and getting this wrong across a whole crew for months adds up to real back-pay exposure if it's ever audited.

Per diem and travel pay create their own gray areas. Time spent driving between job sites during the workday is generally compensable, while a normal commute from home to the first job of the day usually isn't, though the exact rules can depend on your specific setup. Contractors who pay a flat per diem for fuel or meals need to make sure that payment is structured correctly, because treating it as non-taxable when it doesn't meet IRS requirements for an accountable plan can turn it into unreported taxable income.

Misclassifying any of this doesn't usually surface immediately. It tends to surface when a former employee files a wage claim, or when a workers' comp audit or payroll tax audit digs into how hours and pay were actually calculated over the past year or two. At that point, you're not just fixing the mistake going forward, you're potentially owing back pay and penalties for time that's already passed.

Getting payroll set up correctly from the start, with clear policies on overtime calculation, travel time, and per diem, protects you from this kind of exposure and makes audits, if they happen, far less stressful.

Jeremy Brewer is the founder of 911 Bookkeepers LLC in Baton Rouge, Louisiana. He worked in the field as an HVAC tech before building books for the trades, and he serves as a licensed paramedic in EMS. He is a Xero Certified Advisor.