Q. Some of my construction employees must drive their personal cars to and from various work sites during work hours. Am I required to reimburse these employees for the miles they drive during this travel? If so, what is the amount per mile?
A. Under Labor Code 2802, employers are required to reimburse employees for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of their duties or while obeying the directions of the employer.
As of 2015, the standard federal mileage reimbursement rate is 57.5 cents per mile for all business-related travel. The IRS recognizes this rate, and reimbursement at this rate would be deemed “reasonable.”
However, you are not required to reimburse your employees’ mileage at this rate. You can pay more or less.
You may pay less as long as the rate is based on objective evidence reflecting the average cost in the geographic area where the work is performed. However, the employee must be permitted to challenge the resulting reimbursement payment. If an employee can show that the reimbursement amount is less than the actual expenses incurred, you must make up the difference.
If you do not pay the required reimbursements, a court or the Division of Labor Standards Enforcement may order payment of the employee’s necessary expenditures or losses, including attorneys’ fees incurred by the employee enforcing his or her rights to reimbursement, plus interest at the same rate as judgments in civil actions.