Contributors

Jennifer Woo Burns

Of Counsel

The IRS has released the new standard mileage reimbursement rate for the new year, raising the 2024 rate of 67 cents per mile to 70 cents for 2025. Employers are obligated to reimburse employees for reasonable expenses associated with the employees using their personal vehicles for work purposes (excluding their normal commute to/from work), such as offsite meetings, training, and work-related errands. This reimbursement allowance is generally regarded as sufficient to cover the costs associated with the employee’s personal vehicle maintenance, gas, and insurance for miles driven for work-related use of the vehicle, although exceptional circumstances may require the employer to cover additional actual expenses incurred by the employee.

Employers should update their mileage reimbursement rate accordingly and should review their expense reimbursement policies to ensure that they also adequately reimburse employees for other travel-related expenses, such as the reasonable cost of meals, travel fare, remote electronic device use, and other incidental expenses. In addition, time spent traveling when the employee is not free to engage in their own personal activities (including time spent in transit) is generally compensable time, as such, it is important that non-exempt employees record the time of their travel-related activity so they are properly compensated. Employers should seek the input of counsel in preparing compliant expense reimbursement policies.