The Internal Revenue Service (IRS) has announced its 2019 optional standard mileage reimbursement rate for employee business use of a personal vehicle, effective January 1, 2019, increasing from 54.5 cents to 58 cents.

The IRS calculates the rate annually based on a study of fixed and variable automotive operating costs, including insurance, repairs, maintenance, gas and oil.

Under California Labor Code section 2802, employers must reimburse employees for all actual work-related expenses necessarily incurred.

According to California’s Division of Labor Standards Enforcement, using the IRS mileage reimbursement rate will satisfy an employer’s reimbursement obligation unless the employee provides evidence demonstrating otherwise. For example, if the employee can show the IRS reimbursement rate does not cover all of his/her actual and necessary business-related vehicle expenses, the employer must pay the difference.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin for more information.

Cindy Bamforth

December 27, 2018