California Employment Law
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Do you have an employment contract with your employer that states that you are entitled to a car allowance or are you an at-will employee?
Unfortunately, it can only be one or the other. If you are an at-will employee, your employer is free to change the terms and conditions of your employment at any time for any reason with or without any prior notice.
However, if you have a contract with your employer, then the terms and conditions of your employment can only be changed with a new employment contract, or your employer would be in violation of those terms of the contract.
Since you mention you are an at-will employee, most likely, your employer is able to take away your car allowance for any reason (or no reason at all), including you having a DUI even though it was on your own time and doesn't have anything to do with work.
However, if you have a contract guaranteeing you a car allowance, then your employer would need to substantiate that you somehow breached that agreement through getting a DUI. Otherwise, you would have a cause of action against your employer for taking away your car allowance.
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