royster13:
Gregster I am having a hard time trying to figure out what you are trying to say…Are you saying an employer has to pay an employee that uses their car 58.5 cents per mile?..If so, I can not see anything that says that is the law…As I see it, the rate you are quoting is the amount an employee can deduct from their overall pay if they use their car for business without requiring them to keep track of expenses…So if they are paid $x.xx per hour and $X.xx per trip and at the end of the shift they have driven XX miles then they can deduct XX x $0.585 and only the remainder is considered income…
Now if you are saying most employers do not pay enough to cover actual costs, you may be right and that sucks…But the employer would not be breaking any laws…
No, I am not saying that an employer has to pay an employee that uses their car 58.5 cents per mile. That IS the law in California no matter how much someone is paid, but is not federal law. However, it is federal minimum wage law that requires that employees be paid at least minimum wage, and they be fully reimbursed for expenses they incur that are business related. In other words, their wages minus business expenses must not fall below minimum wage.
If an employee is paid minimum wage, they must be fully reimbursed for the use of their vehicle. Not just for gas, but the total cost of ownership. The DOL sets two methods that are allowed to calculate this cost, the rate set by the IRS (which is also the same rate to calculate deductions on your taxes) or actual cost. As far as I know, no one in the pizza delivery industry takes the time to actually track all of the documents required to calculate ‘actual cost’, so the only other acceptable method is the IRS rate.
“Now if you are saying most employers do not pay enough to cover actual costs, you may be right and that sucks…But the employer would not be breaking any laws”
If an employer is under paying mileage to a minimum wage employee, then a minimum wage violation has occurred. That underpayment causes the employer to break minimum wage laws.
If an employee is paid well OVER minimum wage, and incurs expenses out of pocket, but the net wage remains ABOVE minimum wage, no minimum wage law is broken.
For those of you who say tips make up for that loss, you are incorrect. “Tips in excess of statutory tip credit may not be credited against uniform purchase and maintenance costs”
Here is a detailed explanation of what the law says on the matter including references:
From page 31 of the DOL Field Operations Handbook (FOH) chapter 30
http://www.dol.gov/esa/whd/FOH/FOH_Ch30.pdf
Car expenses - employee’s use personal car on employer’s business.
In some cases it is necessary to determine the costs involved when employees use their cars on their employer’s business in order to determine MW compliance. For example, car expenses are frequently an issue for delivery drivers employed by pizza or other carry-out type restaurants.
(a) As an enforcement policy, the Internal Revenue Service (IRS) standard business mileage rate found in IRS Publication 917, “Business Use of a Car” may be used (in lieu of actual costs and associated recordkeeping) to determine or evaluate the employer’s wage payment practices for FLSA purposes. The IRS standard business mileage rate (currently 28 cents per mile)(EDIT: Now it is 55 cents per mile as of Jan 1 2009) represents depreciation, maintenance and repairs, gasoline (including taxes), oil, insurance, and vehicle registration fees. In situations where the IRS rate changes during the investigation period, the applicable rates should be applied on a pro-rata basis.
(b) The IRS standard business mileage rate may be used in lieu of actual costs for FLSA purposes whether or not the employee will be able to take a deduction on his or her tax return for the business use of the employee’s car.
From page 38 of the DOL Field Operations Handbook (FOH) chapter 30
http://www.dol.gov/esa/whd/FOH/FOH_Ch30.pdf
“Tips in excess of statutory tip credit may not be credited against uniform purchase and maintenance costs”
From: Fact Sheet #16: Deductions From Wages for Uniforms and Other Facilities Under the Fair Labor Standards Act (FLSA)
https://www.dol.gov/esa/whd/regs/compliance/whdfs16.pdf
Other Items: Employers at times require employees to pay or reimburse the employer for other items. The cost of any items which are considered primarily for the benefit or convenience of the employer would have the same restrictions as apply to reimbursement for uniforms. In other words, no deduction may be made from an employee’s wages which would reduce the employee’s earnings below the required minimum wage or overtime compensation.
Some examples of items which would be considered to be for the benefit or convenience of the employer are tools used in the employee’s work, damages to the employer’s property by the employee or any other individuals, financial losses due to clients/customers not paying bills, and theft of the employer’s property by the employee or other individuals. Employees may not be required to pay for any of the cost of such items if, by so doing, their wages would be reduced below the required minimum wage or overtime compensation. This is true even if an economic loss suffered by the employer is due to the employee’s negligence.
No, I am not an Attorney, but I can read.
