Effective January 1, 2023, the IRS standard mileage reimbursement rate for cars, vans, pickups or panel trucks increased as follows:
These rates apply equally “to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles.”
California Labor Code section 2802(a) requires employers to reimburse employees “for all necessary expenditures or losses incurred…in direct consequence of the discharge of [their] duties…” This includes reimbursing employees for their work-related mileage driven in their personal vehicles, other than their normal commute to and from their first and last work locations. If the commute to and from work on any particular day will exceed the employee's normal commute, the employer must reimburse mileage for the difference between the employee's normal commute and the extended commute required on that day.
As a general rule, payment of the IRS standard rates noted above is deemed to be reasonable and sufficient reimbursement. If the employer chooses to pay rates lower than the standard IRS rates, the employer must be able to prove that the chosen rates fully compensated employees for their travel-related costs (including fuel, insurance, repairs and depreciation). Remember that providing a fuel card is not considered sufficient reimbursement, as fuel is only one component of reimbursable travel expenses.
You can find additional information about the 2023 IRS rates here.
For questions regarding reimbursement of employee expenses, or assistance with other employment law issues, contact the attorneys at LightGabler.