Motus Guides

California Labor Laws and How They Put Your Organization at Risk

Issue link: https://resources.motus.com/i/1431929

Contents of this Issue

Navigation

Page 7 of 7

PRECISION MATTERS, AND LAWSUITS ARE SERIOUS Our experience shows that inaccurate, ballpark reimbursement policies can cost companies hundreds of dollars per month per employee in incorrect over-reimbursement. At the same me, as described in this ar cle, the risks of significant penal es for under-reimbursement in viola on of state or federal laws are very real. In Hines v. Cowabunga Inc, a Domino's Pizza franchisee se led federal wage and hour claims by drivers for just under $1 million. The Gattuso decision cost Harte-Hanks Shoppers nearly $7 million. There are many other examples of seven-figure se lements when vehicle expenses aren't properly managed. The Gattuso case established that California businesses can choose reimbursement models, including a fixed-rate or lump-sum reimbursement, as long as they disclose exactly how much of an employee's paycheck was earmarked for mileage. But this flexibility comes with a risk: if the employee documents that the amount they are being reimbursed falls short of the actual expenses, the employer will be found liable for the difference, plus interest and possible addi onal damages. MORE PRECISE METHODS LIKE FIXED AND VARIABLE RATE (FAVR) REIMBURSEMENTS – ALSO PERMISSIBLE UNDER GATTUSO – HELP AVOID THIS POTENTIAL PROBLEM. By including both fixed costs like car insurance and deprecia on with variable costs including maintenance, oil and re wear, employers have the best chance to ensure accurate (and defensible) reimbursements that account for all the unique costs employees incur when driving their vehicles for business. With interest in fair and transparent reimbursement growing in the wake of Cochran, this is the perfect me to take control of your own program. ABOUT MOTUS Motus is the defini ve expert in anywhere workforce solu ons. Its pla orm and proprietary so ware simplify the reimbursement and management of vehicle, device, work and living costs through personalized calcula ons. Powered by an unmatched pool of data, refined over more than 80 years, and updated in real me, Motus is the pla orm of choice for top Fortune 500 companies and organiza ons commi ed to workplace agility. Motus automo ve data, captured and analyzed across the world's largest retained pool of drivers, also underpins the annual Internal Revenue Service (IRS) business mileage standard, the amount an individual can deduct for business vehicle expenses. For more informa on please visit www.motus.com or connect with us on Twi er, Facebook, Instagram or LinkedIn.

Articles in this issue

Links on this page

Archives of this issue

view archives of Motus Guides - California Labor Laws and How They Put Your Organization at Risk