Mileage Reimbursement for California Employees in 2022 (Updated)

Posted on Wednesday January 04, 2023

California law requires employers to reimburse employees for business expenses the employees must cover, and this includes mileage reimbursement. While your employer does not have to cover the costs of your daily commute or unnecessary vehicle-related expenses, it does have to reimburse you if you use your personal vehicle for business purposes and for the benefit of the employer. 

Failing to properly reimburse you constitutes unpaid wages in California, and anyone who suspects their employer failed to fully reimburse them should speak with a California employment lawyer right away. 

How Reimbursement Works

If an employee uses a car they personally own for work, reimbursement should cover the costs of:

1. Fuel
2. Wear and tear causing vehicle depreciation
3. Repairs and maintenance
4. Auto insurance
5. Vehicle registration costs

Employers can determine how to calculate and provide the reimbursement, including:

1. Paying based on actual mileage traveled for work
2. Paying based on actual expenses and receipts
3. Using a combination of fixed rates, such as for insurance premiums, or variable rates for fuel expenses
4. Lump-sum payments as gas and expense “stipends”

Employers can choose any of these methods as long as they are fully reimbursing the employee.

The IRS Mileage Reimbursement Rate for 2022

The Internal Revenue Service (IRS) sets optional standard mileage reimbursement rates and adjusts them each year based on inflation and other factors. As of January 1, 2022, the mileage reimbursement rate was increased to $0.585 per mile if an employee uses a personal car, SUV, pickup truck, van, or panel truck for work purposes.

If a personal vehicle is used for work for charitable organizations, the rate drops to $0.14 per mile. For active-duty members of the U.S. Armed Forces or travel for moving or medical purposes, the rate is $0.18.

Employers do not have to use these standard mileage reimbursement rates. The IRS bases its rates on a national average, so the costs of personal vehicle use in California are often much higher. The IRS rate should not be the only factor considered when California employers are reimbursing employees.

What if I Think I Did Not Receive Enough Reimbursement?

Many employers underpay employees for mileage and other vehicle costs. If you think you are not receiving proper reimbursement for your mileage and other vehicle-related expenses, you should discuss the matter with an unpaid wage attorney in California. A lawyer will understand your rights under state law, and we can review all of your expenses and advise whether you were underpaid.

If so, we can assist you in taking steps to seek the unpaid wages you deserve by filing a wage and hour claim. Your employer’s reimbursement policies might be violating the rights of many employees who use their vehicles for work. In this situation, you might all be able to file a class action to seek your unpaid wages.

How Can a Wage Lawyer Help with a Reimbursement Case?

A California unpaid wage lawyer has a solid understanding of California law regarding reimbursements. If you feel that you have not been fairly compensated for business travel, we will sit down with you and review your receipts. In getting a clearer picture of all your expenses, we can determine if your employer reimbursed you fairly.

As of July 2022, California employers are responsible for paying the reimbursement rate of $0.625 per mile. This is in accordance with the IRS mileage reimbursement rate increase for employees using their personal vehicles for business and travel. This higher reimbursement level reflects the climbing cost of gasoline prices. Many reputable companies will even compensate their employees at a higher rate.

If your employer refuses to pay you the minimum reimbursement rate set by the federal government, then you may need to bring your case to court. In doing so, you will want to have detailed accounting of your mileage while performing work-related duties. If your records show which locations you traveled to for work and what the mileage was, then you will have a better chance of receiving the compensation you deserve.

What is the Process of Seeking Unpaid Wages in California?

If you are seeking unpaid wages, you will want to file your case with the Department of Labor Standards Enforcement, which is under the direction of the state Labor Commissioner.

An employee will need to file the Complaint, which is a document listing the relevant facts to your claim and why you should be legally compensated.

There is a process that needs to be followed when an employee is filing an unpaid wages claim:

• On the Complaint (in California, known as the “Initial Report or Claim” Form, the employee must include their legal name, location, and the form of business of the defendant (sole proprietorship, limited liability corporation, partnership, etc.)

• The employee should submit supplemental DLSE forms (if relating to their situation). These forms are DLSE Form 55, DLSE Form 155, and DLSE “Vacation Pay Schedule.”

• The employee should also submit one copy of the certain days/times and hours in dispute, paychecks/paystubs, and any bounced checks during the claim period.

*Although it is the employer’s duty to take accurate payroll and time records, if the employee has these records, it will better support their claim, especially for mileage claims.

• After all this information is submitted, the Deputy Labor Commissioner will be in touch with both parties within thirty (30) days of the complaint being filed.

The Labor Commissioner will take one of three steps:

• Refer both parties to a conference
• Refer both parties to a court hearing
• Dismiss the claim

If the case is not resolved at the conference, it will most likely be scheduled for a hearing shortly after. After the court hearing, the Labor Commissioner will make a decision within fifteen (15) days of that date, deciding on the final award amount, if applicable.

What is the Time Frame to File an Unpaid Wages Claim?

An employee must file an unpaid wages claim within three years of the dates in dispute. If the court process is not initiated within the three-year period, then you will be unable to seek any legal recovery.

The state does set a time limit for employees to file a claim since mileage records and other receipts will probably be lost after a lengthy amount of time has passed. If you feel that you have been underpaid for your travel, it is best to submit your claim as soon as possible.

Contact a California Unpaid Wage Attorney for More Information

At Mara Law Firm, we help employees at every stage of their unpaid wage claim. Whether you want to discuss concerns you have about unpaid wages, or you know that your employer violated your rights, our legal team is ready to help.

Our consultations are always free and confidential, so you have nothing to lose by reaching out so we can evaluate your rights. Call (619) 234-2833 or contact us online to learn more about our services and whether or not you have a valid claim.