Updated: Sep 11, 2020
A federal court agrees that delivery drivers must be reimbursed for actual expenses or at the IRS mileage rate.
Biller & Kimble is proud to announce a decision that will change the game for pizza delivery drivers.
On November 5, 2019, a federal court ruled that because a pizza company did not track their delivery drivers’ actual automobile expenses and reimburse for those expenses, they were required by law to reimburse drivers at the IRS mileage rate. The IRS mileage rate is currently $.58 per mile.
Under the ruling, pizza shops now have two choices when reimbursing their minimum wage delivery drivers:
- Option 1: the shops can track each expense incurred by their drivers, and reimburse for those expenses down-to-the-penny.
- Option 2: the shops can reimburse at the IRS mileage rate for each mile driven.
The delivery drivers argued to the court that employers should have to follow the Department of Labor’s Field Operations Handbook. The drivers claimed Papa John’s should either reimburse for the drivers’ actual expenses (based on receipts, etc.), or reimburse at the IRS standard business mileage rate.
The defendants, a Papa John’s franchisee, argued that they should be permitted to “reasonably approximate” the drivers’ expenses. =
The Court agreed with the drivers, recognizing that only the DOL’s standard ensures no one will be paid less than minimum wage:
The Department’s approach recognizes that—when an employee is standing on the minimum wage fault line—an employer cannot and should not be allowed to guess, estimate, or come “close enough” to reimbursing for these substantial expenses. Instead, the law should provide a clear directive of how to comply with the minimum wage laws. The Department’s approach creates a bright line for employers to follow. The “IRS rate or actual expenses” method is the appropriate measure.
– U.S. District Judge Thomas M. Rose, November 5, 2019
Read the full opinion here: Hatmaker v. PJ Ohio.
This is the first court in the United States to rule on a motion for summary judgment that employers must reimburse actual expenses or at the IRS rate as a matter of law.
Pizza delivery drivers around the country are subject to the same basic terms of employment. They are paid minimum wage, or sometimes less, as an hourly rate. They drive their own cars to complete deliveries. And they are reimbursed for their expenses at some amount set by the company—usually a set amount per delivery (e.g. $1.00 per delivery) or a set amount per mile ($.30 per mile).
Our firm represents thousands of pizza delivery drivers around the country who claim that this pay structure violates their minimum wage rights.
Yesterday’s decision in Hatmaker will go a long way toward ensuring that all delivery drivers are reimbursed for their expenses at the IRS standard business mileage rate, instead of whatever number their employer believes is “reasonable” at the time.
If you are a delivery driver, contact Biller & Kimble today for a free consultation.
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Past results obtained by Biller & Kimble, LLC are no guarantee of future results. Each case or matter is different and must be judged on its own merits.