My boss is paying under the US standard mileage rate for cars, is this legal?

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My boss is paying under the US standard mileage rate for cars, is this legal?

Hi, my boss has been paying us .45 per mile for work but I read on the IRS
website that the standard mileage rate for cars is at .55 per mile. Is this legal?
Are there any loopholes he may be going through? I am working for this
company full time and for salary but drive my own car for more than half of my
job and get reimbursed every month. He explained to me and another employee
that because gas prices had gone down so much that he was going to change
our reimbursement rate and that the .55 he originally paid us is only for trucks. I
thought it was BS at the time but after talking to a few people, I’m wondering if
he has any right legally to pay us this amount. I plan on confronting him about
this, but want to make sure I do my due diligence before going to talk to him.
Thanks

Asked on April 21, 2016 under Employment Labor Law, New Jersey

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

You are mixing apples and oranges: the mileage rate on the IRS website is the tax deduction you may take for mileage, if not reimbursed for it. It is not the rate at which an employer is required to reimburse mileage and has nothing to do with actual reimbursement, which may be more, less, or the same. Indeed, an employer has NO legal obligation to reimburse mileage at all: it would be legal to make employees absorb their own mileage costs. So your employer may reimburse you only $0.45 per mile if it chooses. Speak to your tax preparer, howeve: possibly, you may be able to also get some tax deduction for the difference between the IRS rate and the rate you are actually reimbursed.


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