The federal government does not require that employers reimburse for mileage. When employees pay for work-related expenses, the employer has no obligation to pay them back. (There are exceptions like when expenses cause employees to fall below minimum wage.)
Except, that is, in California. Employers in California must provide their employees with mileage reimbursement.
California law protects employees from bearing the burden of business expenses and so they must reimburse their employees when they drive.
Mileage Reimbursement Rules
California employers do not have to reimburse the IRS rate. They may instead reimburse actual expenses incurred. If they choose to do it this way, they must keep meticulous records of mileage and receipts. Using the IRS rate is generally easier, however.
From the California Labor Code:
2802. (a) An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful.
(b) All awards made by a court or by the Division of Labor
Standards Enforcement for reimbursement of necessary expenditures under this section shall carry interest at the same rate as judgments in civil actions. Interest shall accrue from the date on which the employee incurred the necessary expenditure or loss.(c) For purposes of this section, the term “necessary expenditures or losses” shall include all reasonable costs, including, but not limited to, attorney’s fees incurred by the employee enforcing the rights granted by this section.
If you need to calculate your mileage reimbursement in California rates, read this article. Calculating your mileage doesn’t have to be difficult, and you can do it by hand. If you’re looking for an easier route, you can always try Timesheets.com. It’s a time and expense tracking system that keeps proper track of mileage and other reimbursements. Try it free today!
66 Responses
When youre considered as 1099 employee, what is the law for mileage reimbursement, expense reimbursement, traveling reimbursement?
There are no 1099 employees only 1099 contractors–
On a recent job offer which requires a plethora of driving, I was told the $0.55 per mile was to include an increase in insurance coverage to the requirements when doing work of their client (s).
The offer was somewhat of a joke, but this does not sound right to me. i had done work for a Telecom client as a consultant, but in acting as a consultant this was an expense of doing business which is a legitimate right off for the corporation, but I do not believe it is if you are an employee
I work for a independent mobile technical company that handles contracts in various hospitals across the state in CA. They recently decided to no longer pay our mileage expenses from our homes (which are considered our “office location” in our policy literature), and instead arbitrarily decided to claim the “nearest hospital location” as our “home” in order to reduce mileage expenditures incurred for those of us who commute to those facilities. My question: is this allowance considered fair practice in CA and can a mobile independent contract company impose these kinds of travel expense limitations legally?
I had to have this fight when I worked for Samsung a few years ago and won because the law does not support their argument. If your home is your office, then that is where your day, and your expenses, begin. I would fight this if I were you.
contact scott hardy. attorney only handles class action. you can email him on his site. he’s good.
I was told my my employer here in California they will only pay .35 cents they quoted – me this: 0.58 is the maximum rate the IRS would allow to be reimbursed tax free but the current approved rate for us is 0.35.
Is this true?
Employers are free to reimburse more or less than the IRS rate as long their state doesn’t have its own requirements and as long as any lack of reimbursement does not cause the employee’s wages to fall below minimum wage. California employers do not have to reimburse the IRS rate. They may instead reimburse actual expenses incurred.
My employer is saying that I can only expense mileage outside of a “regular commute,” so…the first 50 miles are not able to be expensed. Only those that I incur in between my travel to and from work. Is this true?
The IRS doesn’t require employers to pay for any mileage that an employee travels from home to work or vice versa. Since this is California law, you will want to talk to your local labor board to ensure that this is applies to California as well.
If California does not require employers to pay for mileage from home to work, but the work address is constantly changing, how is this handled? For example, construction crews work at one site for one week and drive from home straight to the job and next week they finish and start a new job in a different City. How is this handled? Would the employer just pay the difference in mileage from what it would take the employee to get to the office from their home and from their home to the workplace?
Ex. Home to office = 10 miles. Home to worksite = 15 miles. Employers pays for 5 miles?
Employers aren’t required to reimburse employees from their residence to their initial work station. According to the IRS, employees will not receive reimbursement between their homes and office (or temporary work stations)– which means employers aren’t required to reimburse employees even if the work station is only temporary.
If you live in California, you may want to consult an attorney, your local labor board, or reference CA 2802. California protects employees from incurring curtain costs.
Yes, this is true. Employers do not have to reimburse your mileage to and from work. Only mileage once you’ve arrived at work. (Like if you have to drive a client around, or run errands for the office, etc). Commute miles do not count as this.
Do you have a list of states that require travel and expense reimbursements? I can’t seem to find a list anywhere.
We wouldn’t be the right place to find a list like that. You’ll have to research this one on your own, unfortunately. Side note: I’m not sure there’s a law anywhere that specifies expenses paid by an employee must be reimbursed, as wouldn’t there first need to be a law that specifies an employer can require an employee to pay company bills? Without the horse, you might not need the cart.
For company fleet vehicle drivers who have a payroll fixed personal use deduction, & also record monthly personal usage mileage; is it appropriate for them to not allow gas card usage when on leave or vacation? If so, what if the recorded personal mileage is less than the personal use monthly charge?
My new employer is training me at a store that is 35 miles from the store that I was hired for (although there is a much closer location, only 16 miles away). I asked about mileage reimbursement during my interview and they said they’d look into it. They later verbally agreed that I would be reimbursed for my mileage until my home store opened.
I have been working for them for a month now and after asking several times, they have finally told me that they will not be reimbursing me for any of my mileage. I am making minimum wage, so I believe this would qualify as work related expenses causing me to fall below minimum wage.
Are they legally required to pay me for my mileage/travel time?
I quit my job and my employer didn’t include my mileage reimbursement in my final paycheck. I was told that I would get the reimbursement 24 days after I quit. The date is the regular payment date I would have been paid if I would have still been working with the company. I am in California and I thought the law requires employers to pay all final reimbursements and pay within 72 hours of quitting otherwise a waiting time penalty would apply. Is this not the case if it’s mileage reimbursement I’m waiting for?
I believe the waiting period is 30 days for compensation. To be sure, I would check with a legal counsel or the CA state labor board for more guidance.
I am an employer. My employee drives my van and now wants me to pay for all the gas including his normal commute from home to the job. Am I obligated to pay for the commute as well?
Employers are not required to pay for reimbursement from the employee’s residence to the official work station and vice versa. You are only required to reimburse the employee when they are traveling from job site to job site.
My employer asks that we first deduct 60 miles from any mileage reimbursements we submit; I was told by HR that they do not pay for the first 60 miles as that’s considered allowable commuter mileage to get to work’s location.
I rarely have any mileage to submit as I’m mostly in the office however on occasion I’ll need to visit a job site that is generally more than 30 miles away. So this means if I drive to a job site that is 40 miles away (80 miles roundtrip), I’ll only be reimbursed for 20 miles worth? Is this accurate/legal?
California employers are required by law to reimburse employees for any miles driven for work purposes; however, they do not have to reimburse employees when they’re traveling from their residence to their official work station. Employers either have to reimburse for all mileage using the IRS rate, or they must reimburse the employee based on mileage and receipt records. I’m unfortunately not familiar with “allowable commuter mileage”– you may want to consider speaking with your local labor board to ensure that your work’s policy is legal.
I work in California and my work is saying they will only reimburse .40 cents per mile. Is that true? I’m confused?
If you are a resident of California employers do not have to reimburse the IRS rate. In fact, as long as you’re getting a full reimbursement, your employers are fine. They have the option to reimburse actual expenses incurred or they can use their own reimbursement rate. In some cases, they might reimburse you with their own reimbursement rate rather than your actual expenses incurred, but that method is a hassle for an employee and employer because an employer’s reimbursement rate might not cover the cost of Gasoline, The cost of maintenance (oil, lube, routine maintenance), insurance (liability, damage, comprehensive and collision coverage), licensing and registration, and the depreciation and all other costs associated with operation of the vehicle to your actual expenses incurred. If your employer’s reimbursement rate doesn’t equal the cost of your actual expenses incurred, that’s not acceptable. This is why a lot of employers choose to pay the federal mileage rate instead, because gathering the employee’s vehicle cost can be time-consuming.
When determining the actual expenses incurred, it is not as clean cut as only deriving expenses from the price of gas. So the deal is not so sweet when you figure all the costs that need to be compared. As illustrated below by an analysis of the California case, Gattuso v. Harte-Hanks Shoppers, Inc.
“In examining the different methods of reimbursement, the Supreme Court held that the actual expense method is the most accurate, but it is also the most burdensome for both the employer and the employee. Gattuso, at 478. Under the actual expense method, the parties calculate the automobile expenses that the employee actually and necessarily incurred and then the employer separately pays the employee that amount. The actual expenses of using an employee’s personal automobile for business purposes include: fuel, maintenance, repairs, insurance, registration, and depreciation.”
Forty cents is not such a sweet deal when you consider thousands of miles added to your insurance policy while you watch your cars value constantly depreciate.
For work I basically gave away 75 percent of my vehicles value in mile depreciations dedicated to work tasks. When my car inevitably fails to be reliable, my mileage reimbursement will not soften the financial blow of getting a down payment ready for purchasing a new vehicle because I will have no trade in value to bargain with. I try to make my 35 cents a mile stretch to cover all my vehicle costs. I had to learn now to change my oil on my own just to stretch my mileage reimbursement, that also doesn’t help the value of my vehicle.
Yes, Robert, that’s very true. Thank you for sharing your feedback and knowledge.
Lindsay, I have a question piggy-backing on the CA reimbursement. My company reimburses $538 per month and $0.28 per mile. That’s it (no gas, no insurance). Because my vehicle will be more than 90% business miles (1,610 business/244 personal in January ‘20), can I write the gas receipts (at the business %) and the lost IRS mileage reimbursement off on my taxes? Thank you.
That’s a great question for a local accountant.
Hi Lindsay,
Thanks for providing such useful information. I’m a California resident working for a non profit. Sometimes additional driving to and from destinations during work is required. (not speaking of to and from work from home)
It’s usually accepted in the office that this is “on the employee”, i.e. no one speaks of reimbursement. However, my wage is low enough already, and if there’s a law in place to aid employees in this position, I’d like to utilize it. In addition, I want to make sure my organization is aware of and engaging in appropriate practices.
What’s the best way for me to figure this out in my work place? Reimbursement rate, procedure, etc.. How do I avoid the guilt I may receive when “asking a poor non profit about additional money” ?
Thanks Lindsay!
Appreciatively,
D
Great question. I’d check with your local labor board about the law. We’re not lawyers. But they can probably advise you on what a company is legally responsible for. It’s best to tread lightly when talking to your company about such matters. You don’t want to create any animosity.
I have a question: I work for a company as an employee and get paid per job or house that I do. When I was hired, they had me sign a contract saying that I would record my miles but that they would then deduct that from my pay as non taxable income. So if I made $500 that week and drove $200 in miles, they would only tax the $300 in income, and I would get my mileage tax free. Is this okay? Or should I be getting paid per unit plus my mileage? I’m in California.
Technically under CA law employers are either supposed to pay the federal rate or they are supposed to pay you your actual expenses incurred. If they are not compensating you accordingly, or if they are underpaying you, they might be in trouble. I would recommend speaking with your local labor board about your current situation so they can let you know whether or not it’s legal.
Do companies based outside of CA also have this requirement to reimburse? I’m looking at an offer from a company in MA, all personal vehicle driving daily, with no mileage reimbursement or car allowance mentioned (for reference, my previous positions in the same field with large and small companies either had a car allowance and paid gas, or a mileage reimbursement at the federal rate).
The FLSA doesn’t require employers to give employees mileage reimbursement, however, most states do have mileage reimbursement policies in place. According to the Massachusetts government website, employees who use their vehicle for work purposes may apply to their agency for reimbursements, but the rate is different than the IRS rate. You may want to speak with their local labor board to get more insight.
I am employed by a staffing agency in California and receive a W-2 from them. I am an employee of the agency but contracted out to a local business. My “base” is only 5 miles from my home. I had to travel 120 miles away from home recently on business and was told that I would be reimbursed for mileage after the first 50 miles EACH way. Is this legal? In addition to putting in a normal 8 hour work day, I also spent a total of 5 hours commuting back and forth and I was not compensated for the travel time. Is this legal? Also, now the business that I am working at has requested that I travel to deliver goods to other branches in the area using my car. Aren’t I entitled to mileage reimbursement for this too?
Thank you.
Is it illegal or unethical if a company pays half of the IRS rate in California yet deducts the full IRS amount as a business expense (and profits from this).
I would advise that you speak to an accountant who understand tax law in order to assist you
I am considering to start with a company in Southern California 8/1/2020 that does not reimburse for mileage or any car allowances, as well as not providing health insurance. It is 100% commission. Company says i will be a W2 employee instead of 1099/ independent contractor, since i will be receiving leads from the company and they don’t have to reimburse for mileage because of that. Also, they say they will only take out 70% of my taxes from my check, and the other 30% is basically used to reimburse my car expenses. Do you have any information on this? Thanks for any advice you can give.
First, I want to state that under CA law, an employer must reimburse an employee for all expenses incurred while on the job. Your employer does not have to reimburse you when your driving from your residence to your first work station and vice versa, however, they must compensate you for your other travel time. As a W-2 employee, your employer should have to reimburse you just like any other employee. Regarding your statement about health insurance, there isn’t necessarily a law that requires an employer to provide employees with health insurance. But, some employers may have to give employees health insurance benefits in order to receive IRS penalty forgiveness. This sounds a little complicated– I suggest that you speak with an HR expert who knows about laws specifically within the field you’re trying to get into.
I recently started working as a delivery driver for a small company in California , I asked the manager once I applied if I was going to be reimbursed for any gas or mileage on my own car. He said yes, but he didn’t seem too sure so I emailed the onboarding specialist and she said “We do not reimburse gasoline. If you were to get into an accident while driving, all damages to your car would have to be paid for by your personal car insurance.” I really need the job but if they’re not going to reimburse me is it worth it? I’ve tried to do research but I’m still confused should I demand for a reimbursement or am I in the wrong?
Hi Armando. To clear things up, the IRS does not require employers to reimburse employees when they’re traveling from their residence to their first work station and vice versa. If you’re going to drive from job site to job site during your shift, under CA law, your employer does have to reimburse you for the expenses you’ve incurred. Here’s a link to learn more about CA reimbursements: https://www.calhr.ca.gov/employees/pages/travel-reimbursements.aspx. I suggest that you speak with an HR rep within your area to familiarize yourself with the CA reimbursement laws.
HI Lindsay,
I live in CA and regularly drive 12,000 business mile a year. My employer reimburses me the 57.5 rate for my business miles, and I don’t claim business miles on my state or tax returns. Question – since the actual mileage cost in CA is much greater than 57.5 cents – can I claim business miles on my federal return for the difference in actual cost vs the national average? I estimate that my actual cost per mile is 30 cents higher than the national average – could I claim this difference ? Thanks,
Hi John, unfortunately I cannot answer that for you. I suggest speaking with a tax expert to get an answer.
Hello, I had a recent experience with my employer. I get a car allowance of $1000 a month non taxed for using my vehicle for work. I recently went to New Mexico from California which was a 1,610 mile trip. They are only paying my gas since they are claiming i got my mileage allowance for the 2 weeks included. ($500 every two weeks thus being $1000 a month). I asked them to rent me a car or i can use my car but mileage paid for the trip and they said ok. Now they’re claiming I get a salary of $500 biweekly so that means no extra mileage of 1,610 can be paid for. Is this legal to do? do they owe me the extra 1,610 mileage reimbursement?
Technically a CA employer is supposed to pay an employee for all expenses incurred when traveling for business purposes. I’m not sure what type of car you drive, but assuming you have a vehicle that gets about 24 mpg on average, and with gas prices around $3.20 average, the gas cost of your trip both ways was probably anywhere between $300.00-$600.00 total. In my opinion, it seems like your $1,000 allowance covered that trip entirely. I cannot give legal guidance on this matter, so if you have questions you may want to speak with an HR consultant.
Gas in Cali is 4-5 dollars a gallon
Yes, gas prices have changed since I last commented. Gas prices will continue to vary depending on the supply and demand of gasoline.
Greetings,
We currently employ a sales rep located remotely in MN, but our corporation is located in San Diego – my question is…….do we have to reimburse him for miles driven to and from customer visits? His “office” is at his residence and he racks up mileage upwards to his salary. As a sales rep, visiting customers is a part of his job and should be done daily to prospect new business. Hopefully, you can help me out on this matter, as I have tried reaching out to other sources in MN and have been unsuccessful.
Hi Kat. Generally, an employee would follow the state law where he/she actually completes their work. That being said, I would highly recommend that you try to speak with an HR representative in MN https://mn.gov/portal/government/local/
I am a home inspector in Orange County, CA. My employer recently changed me from a 1099 contractor to a W2 employee. All 6 inspector employees work out of our own homes, there is no office to report to. My employer says they will not reimburse our mileage to our first home inspection of the day or home from our last inspection, as they say that’s considered ‘commuting’. The only mileage they will reimburse is the mileage between inspections on the same day. My understanding is that ‘commuting’ is from your home to an office and back. As we do different homes everyday, we are always driving to different locations. Isn’t our employer required to reimburse our mileage starting from our homes as we leave for our first inspection (essentially from our offices) until we return home from our last inspection?
Hi Brent. Typically your commute is considered going from your place of residence to your initial work station, whether it’s a temporary work station or not. That being said, if your starting point changes daily and your employer isn’t reimbursing you when you’re driving to your first work station, then he or she is in the right.
My husband works for a construction company. He’s being sent to job sites that are 75+ miles away from the company headquarters. Sometimes requiring my husband to haul equipment needed for the job in his personal truck. They’re not reimbursing for any expenses. Is that legal?
That depends on which state he works in and whether or not he’s traveling directly from home to his work station. I suggest that you speak to your local labor board or an HR expert in your area to see if he qualifies for the “50 Mile Offest Rule” reimbursements.
Hello, I drive 47.7 miles to work and from work. Round trip 95 miles. My employer says that mileage reimbursements start at 50. Is this true?
Thank you
Hi Elizabeth. Under IRS rules, employers aren’t obligated to compensate employees mileage when they’re traveling from their residence to their initial workstation and vice versa. Therefore, your employer shouldn’t have to reimburse you when you’re driving to work and home. There is an IRS rule about traveling 50 miles called the 50 Mile Offset Rule, however that only applies in certain situations. You can read more about it here/. If you have more questions, I suggest that you speak with your employer to clarify their policy or speak with your local labor board.
If you are a W-2 employee and working at a distant location being put up in a hotel, is that considered your homebase when traveling to and from location? I am being told I will not be reimbursed for my mileage traveling from the hotel to location. (In California)
Hi Franklin. Under federal law, an employer doesn’t have to reimburse an employee when they’re traveling from their residence to their initial work station. However, your work location may technically count as a “Temporary work location”, and the IRS states “If you have one or more regular work locations away from your home and your commute to a temporary work location in the same trade or business, you can deduct the expenses of the daily round-trip transportation between your home and the temporary location, regardless of distance.”. Meaning, you may deduct the expenses because this isn’t your normal workstation; however, your employer is most likely still not obligated to pay you mileage. Because CA mileage reimbursement laws are so complex and changing often, I suggest that you speak with your local labor board about CA mileage and temporary work location reimbursements.
I work in California and I am a W2 outside sales employee. I have worked there for 3.5 years and I have never been reimbursed for travel expenses. I drive about 20,000 miles a year for work. I recently found out that the other outside sales employee is reimbursed by the employer so the Employer is aware that he must reimburse me. Are there penalties for this and what does he owe me now- 57.5 per mile? I will be getting advice from a labor attorney. Thank You!
Most employees are entitled to mileage reimbursements in California, so it’s likely that your employer will have to backpay you for the missing reimbursements. CA employers do not have to pay you the IRS reimbursement rate, which is currently $0.56 per mile; your employer only has to reimburse you for your actual incurred expenses. However, CA employers usually reimburse employees the IRS rate because it’s a bit easier than calculating all expenses. In order to figure out how much your employer owes you, you would need to find records of all mileage when you traveled from job site to job site, including any other personal vehicle expenses. Your labor attorney should be able to assist you with this process.
In California, Is employer required to reimburse exempt employees mileage? Or the mileage reimbursement requirement only applies to non-exempt employees?
CA employers are typically supposed to reimburse all employees for their work-related expenses.
Hi is there a minimum requirement of miles needed to make a reimbursement report. My job have us drive between buildings which are only 1.5 miles apart but have us do it sometimes multiple times a day.
I don’t know of any requirement for a minimum distance. Money is money, and miles are miles, regardless of the amount.