June 29, 2022

Volume XII, Number 180

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Reminder Regarding California Expense Reimbursement & IRS Increase of Its Mileage Rate

Under California Labor Code 2802, employers are required to reimburse employees for necessary expenses incurred in executing their job duties for their employer. This reimbursement requirement may apply to the use of the employee’s personal vehicle for work purposes, such as driving between work sites. An employee’s regular commute does not typically require reimbursement, just as commute time generally is not deemed hours worked.

When determining how to reimburse an employee for use of their personal vehicle, employers may select between different methods for reimbursement including actual expense, mileage reimbursement, or a stipend method.

The California Labor Commissioner has opined that the use of the Internal Revenue Service (IRS) mileage allowance will satisfy the expenses incurred in the use of an employee’s car for work purposes, in the absence of evidence to the contrary.

Usually, the IRS announces any changes to the mileage allowance rate in the fall in connection with increases to take place at the beginning of the year. However, in response to increases in fuel prices, the IRS recently announced on June 9, 2022, that it would increase the business travel rate to 62.5 cents per mile, effective July 1, 2022. This is a special adjustment for the final six months of 2022.  Employers who reimburse using the mileage reimbursement method should consider increasing their reimbursement rate accordingly.

Jackson Lewis P.C. © 2022National Law Review, Volume XII, Number 173
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About this Author

Susan E. Groff, Jackson Lewis, disability accommodation lawyer, protected absence attorney
Principal

Susan E. Groff is a Principal in the Los Angeles, California, office of Jackson Lewis P.C. She advises and counsels management on various employment related issues.

Ms. Groff advises employers on complying with federal and California requirements for disability accommodation and protected leaves of absence.

In addition, Ms. Groff counsels employers on a host of other employment issues, including wage and hour laws, harassment and discrimination complaints, workplace investigations,...

213-689-0404
Cecilie E. Read KM Attorney Los Angeles
KM Attorney

Cecilie E. Read is the Knowledge Management (“KM”) Attorney for Jackson Lewis P.C.’s California Advice and Counsel Resource Group, and is based in the Los Angeles, California, office of Jackson Lewis P.C. She uses her expansive understanding of the complexities of California employment law to ensure all Jackson Lewis attorneys are consistently ahead of the curve and working efficiently to serve clients.

Prior to joining Jackson Lewis, Ms. Read defended employers in a wide range of industries in employment claims from single-plaintiff harassment claims to wage...

213-689-0404
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