The Division of Labor Standards Enforcement proposes to adopt regulations regarding Travel Expense Reimbursement policies. The proposed regulations (available at http://www.dir.ca.gov/dlse/2802Regs/2802Regs-ProposedText13700-13706.pdf) cover expense reimbursement requirements for mileage, travel, lodging, meals and other expenses related to business travel.
Under the proposed regulations, employers can either pay the actual costs employees incur for travel or they can pay the applicable Internal Revenue Service rate. The meal and lodging rates differ depending on the city to which the employee travels and is based on IRS Publication 1542 (available at www.irs.gov/pub/irs-pdf/p1542.pdf). If the employer wants to pay the applicable Internal Revenue Service rate for meals and lodging as opposed to the actual amounts incurred, the employer must inform their employees of the policy before the expenses are incurred.
For mileage reimbursements, employers must pay the IRS mileage allowance. The IRS recently increased the mileage allowance to 48.5 cents per mile. Under the proposed regulations, employers can pay less than 48.5 cents per mile, but only if they can prove that the specific employee’s mileage reimbursement rate is less than the applicable IRS rate. This would require the employer to keep track of the employee’s mileage as well as his or her service records. Similarly, employees could demand a higher rate if they can prove it costs more than 48.5 cents to run their car (including maintenance).
Employers must keep records of the expense reimbursement and requests, provide a pay stub identifying the expenses and pay the expenses by the end of the month following when the expenses reimbursement requests are submitted. Additionally, employees bringing a claim for expense reimbursement at the Labor Commissioner will be entitled to recover their attorneys’ fees even at the administrative level.
The DLSE is holding a public hearing on the proposed regulations on February 7, 2007, in San Francisco. The regulations may be revised depending on the public comments received.
Employers should review their expense reimbursement policies with a qualified attorney.
Original article by Robert E. Nuddleman of Phillip J. Griego & Associates
Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
Your use of this blog does not create an attorney-client relationship between you and Phillip J. Griego & Associates. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Phillip J. Griego & Associates cannot guarantee the confidentiality of anything posted to this blog.