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LawTalk
LawTalk, Attorney
Category: California Employment Law
Satisfied Customers: 27889
Experience:  I have 30 years of experience in the practice of law, including employment law and discrimination law.
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My company requires me to provide a vehicle for company use

Resolved Question:

My company requires me to provide a vehicle for company use my position requires extensive off road travel requiring four wheel drive. For the last 8.5 years our compensation package has paid us the IRS rate per mile plus a flat rate of $4800 a year to off set the additional depreciation and ware and tare that a off road vehicle takes. This last week we had a conference call announcing a new vehicle reimbursement package for all employees nation wide starting 2/18/13. In this package employees are split into two categories. The first is all employees that drive under 7000/year will receive the IRS rate. the second (which I'm in) will receive a combination of a flat rate of $252.52 and a per mile rate of 19.8 cents. They also have specific requirements as follows:
1 Minimum Vehicle age of 2008 or newer.
2 Minimum retail value of $18545 or grater.
3 minimum insurance requirement of 100K/300K/100K

They base the per/mile amount and flat rate on driving a 2012 TOYOTA CAMRY SE FWD 4 DR SEDAN 2.5L 4 CYL and not my actual vehicle ( I drive a 2004 chevy truck). As part of the program you must register your vehicle with a website and if your vehicle does not meet the standards listed above your reimbursement rates may be lowered. Mileage tracking is also done on my personal phone by GPS.
This package does not fully reimburse me for my actual expenses. Further more I have never had proof presented that my actual expenses are lower that my current reimbursement rate or IRS rate as seems to be deemed necessary Under Title 8. California Code of Regulations Division 1. Department of Industrial Relations Chapter 6, Division of Labor Standards Enforcement Sub-chapter 12, Travel Expense Reimbursement, Section 13701 part b.
The question is does this new policy look to be in compliance with section 2802 and any other reverent California labor Law?
Submitted: 1 year ago.
Category: California Employment Law
Expert:  LawTalk replied 1 year ago.
Good afternoon,

I'm Doug, and I'm very sorry to hear of your situation. My goal is to provide you with excellent service today.

What other expenses are you expected to absorb? All oil changes repairs tires, etc:

Doug
Customer: replied 1 year ago.

I must absorb everything related to operating the vehicle


 


Allyn

Expert:  LawTalk replied 1 year ago.
Good afternoon Allyn,

I have to say that at first blush I have to say that the travel expense reimbursement proposed by the company doesn't come close to what is required under CA law.

They don;t get use us biased IRS numbers and guesstimates based on an average car. Labor Code, section 2802, subdivision (a) specifically holds: “An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful.”

Essentially, that means that you will be entitled to provide your actual costs associated with your vehicle and demand they pay your actual out of pocket expenses----not some pie in the sky manipulated figure they happen to like.

If they insist on this reimbursement rate, and you can show that you expend more---then they are violating the law---and you may file a complaint with the local office of the CA Department of Labor. Additionally, as mandatory reimbursements are considered wages under CA law, you may sue directly.

You may actually sue the employer in court and recover your wages/commissions. Additionally, if you sue in court, under federal laws (FLSA), you are also entitled to seek what is called Liquidated damages. Liquidated damages is equal to the amount of back wages that they owe you and must be paid in addition to the wages themselves---so you essentially get double the wages owed you in the claim based on their willful failure to pay you. http://labor-employment-law.lawyers.com/wage-and-hour-law/Liquidated-Damages-and-FLSA-Claims.html

Here is an excellent article which deals with pursuing an FLSA claim---which you may do in either state court or federal court. Do take the time to review it:

http://www.thefreelibrary.com/Pursuing+an+FLSA+claim%3a+many+employers+have+figured+out+how+to+skirt+...-a0183316511



You may reply back to me using the Continue the Conversation or Reply to Expert link if you need any clarification of my answer.


Please remember to rate my service to you when our communication is completed, so that I will be compensated for my time in providing you with the information you requested. I will be happy to continue further, and to assist you until I am able to address your concerns, to your satisfaction.

I wish you the best in 2013,

Doug
Customer: replied 1 year ago.

That is about what my research told me. thank you for confirming what I thought. Does the 8.5 years of previous reimbursement at the IRS rate plus an added allowance hold any water in the discussion? Can they compel/force me to buy and operate a specific vehicle by only offering to pay a lower rate or do they have to accept the vehicle I provide and pay accordingly?

Expert:  LawTalk replied 1 year ago.
Hi Allyn,

The law requires that you be compensated your actual expenses---not the IRS guesstimates. IRS figures are nothing more than estimates based on averages and they do not reflect your actual expenses. So the IRS figures are in my humble opinion useless, and dangerous for an employer to hang their hat on.

Again, the threshold is that you must be reimbursed ALL of your necessary expenditures or losses incurred and sustained in using your vehicle for work purposes which benefit your employer.

Now, the employer can require that you buy a million dollar monster truck for the job---but they have to pay for your actual expenses in operating it for the benefit of the employer. You do not have the legal right to substitute your 55 Chevy concerted to 4-wheel drive.


Thank you for your kind words. They are appreciated. Please keep in mind that until you rate me highly for my service, I will not be credited with helping you.

Thanks again.

Have a great day,

Doug
LawTalk, Attorney
Satisfied Customers: 27889
Experience: I have 30 years of experience in the practice of law, including employment law and discrimination law.
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