Does a Company Have to Reimburse Mileage?

Employer mileage reimbursement programs can require odometer readings to confirm miles driven.

An employer mileage reimbursement program provides monetary compensation to an employee when he travels for work using his personal vehicle. While required in some jurisdictions by law, other areas leave it up to employers to agree to provide such reimbursement. When gas prices rise, reimbursement becomes more of a pressing issue for employees who travel.

Types

Any type of contractual relationship between an employer and employee can include a term for travel mileage reimbursement if desired by both parties. However, few employees know to ask for such a benefit during the hiring process. Contracting for the term should cover time and distance traveled, format of the claim process and scheduling of payment.

Features

Some jurisdictions require employee mileage reimbursement under state law. California Labor Code § 2802, for example, specifies that an employer will reimburse an employee of any required costs to do her job duties. Another statute spells out the specific reimbursement requirement for mileage driven by an employee.

Considerations

Some confuse the Internal Revenue Service rate as the benchmark for required mileage reimbursement. This is not the case. The IRS rate ($0.50 per mile as of Jan. 1, 2010) represents a tax deduction rate used by businesses on their tax filings. It just happens to be an easy reference for employers to use rather than calculating their own reimbursement rate.

References

• Lawzilla: California Auto Mileage Expense Reimbursement
• Kindvater: Auto Mileage Expense Reimbursement
• U.S. Internal Revenue Service: IRS Announces 2010 Standard Mileage Rates
• CA Labor Law Attorneys: California Expense Reimbursements
• HR Hero: When Must Employers Pay Mileage Reimbursements?