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Employee Reimbursement Under the FLSA

The Fair Labor Standards Act (FLSA) establishes a federal minimum wage, overtime pay, record keeping and more. Several states have added protections and increased minimum wages above what the FLSA provides. Some of these states have separate reimbursement requirements, but even for those that do not, the FLSA can still offer relief for those that are not reimbursed properly. There are many reasons that employers fail to reimburse their employees, but whether the employer did it on purpose or not, they should not be allowed to profit and their employees’ expense.

Employees often use their own vehicles to the benefit of their employer and then they are reimbursed at very low rates or not at all. The IRS suggests a standard mileage reimbursement rate that employees often fail to meet. Aside from mileage, employers may also be failing to reimburse their employees’ travel, computers, phones, and much more.

A California court found that RadioShack was liable for reimbursing employees for the expenses incurred while using their own vehicles to travel for store related transfers, even when the employees did not make proper reimbursement requests. These situations are not limited to any one kind of employer. Employers in the private sector and in Federal, State, and local governments are subject to FLSA standards.

There have been many delivery driver cases where even though the drivers were reimbursed, courts have approved settlements for failure to reimburse at a minimum-wage rate. Many delivery drivers are reimbursed per mile or per delivery, however, these drivers tend to also get paid a lower out-of-store per-hour rate. Because of the low out-of-store and the low reimbursement rates, their wages often fall below minimum wage. This combination causes FLSA violations which allows employees to seek relief from their employer. Some states provide greater employee protections which may allow employees to seek relief through state law as well.


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