Sixth Circuit Clarifies FLSA’s Minimum Wage Requires Employers to Reimburse Drivers Their Actual Vehicle Costs
The Sixth Circuit, in Parker v. Battle Creek Pizza, Inc., __ F. 4th __, 2024 WL 1068871 (6th Cir. Mar. 12, 2024), issued a recent decision which resolved a split in how district courts address expense reimbursement for personal vehicle use by minimum wage employees under the FLSA. District courts addressing the issue have largely reached two different conclusions. Some courts have found that employers can comply with the FLSA by reimbursing minimum wage employees using the mileage rate published by the IRS. Other courts have found that an employer can comply with the FLSA by using a “reasonable approximation” of vehicle costs to reimburse minimum wage employees.
In Parker, the Sixth Circuit rejected both approaches when it held that the FLSA requires employers to reimburse a minimum wage employee the “actual costs incurred on his employer’s behalf.” In reaching its conclusion, the Court acknowledged that vehicle costs “are undisputedly hard to calculate” and offered little guidance to employers on how to calculate actual vehicle costs to ensure adequate reimbursement.
Despite the Sixth Circuit’s attempt to bring clarity to this issue, the Court’s opinion may end up generating more questions than answers. It remains to be seen how district courts in the Sixth Circuit will interpret Parker.
Scopelitis continues to monitor this and other issues regarding the FLSA. For questions regarding this development, contact Scopelitis Attorneys Steve Pletcher, Kelli Block, Chip Andrewscavage, and James Eckhart.
News from Scopelitis is intended as a report to our clients and friends on developments affecting the transportation industry. The published material does not constitute an exhaustive legal study and should not be regarded or relied upon as individual legal advice or opinion.
Sixth Circuit Clarifies FLSA’s Minimum Wage Requires Employers to Reimburse Drivers Their Actual Vehicle Costs
The Sixth Circuit, in Parker v. Battle Creek Pizza, Inc., __ F. 4th __, 2024 WL 1068871 (6th Cir. Mar. 12, 2024), issued a recent decision which resolved a split in how district courts address expense reimbursement for personal vehicle use by minimum wage employees under the FLSA. District courts addressing the issue have largely reached two different conclusions. Some courts have found that employers can comply with the FLSA by reimbursing minimum wage employees using the mileage rate published by the IRS. Other courts have found that an employer can comply with the FLSA by using a “reasonable approximation” of vehicle costs to reimburse minimum wage employees.
In Parker, the Sixth Circuit rejected both approaches when it held that the FLSA requires employers to reimburse a minimum wage employee the “actual costs incurred on his employer’s behalf.” In reaching its conclusion, the Court acknowledged that vehicle costs “are undisputedly hard to calculate” and offered little guidance to employers on how to calculate actual vehicle costs to ensure adequate reimbursement.
Despite the Sixth Circuit’s attempt to bring clarity to this issue, the Court’s opinion may end up generating more questions than answers. It remains to be seen how district courts in the Sixth Circuit will interpret Parker.
Scopelitis continues to monitor this and other issues regarding the FLSA. For questions regarding this development, contact Scopelitis Attorneys Steve Pletcher, Kelli Block, Chip Andrewscavage, and James Eckhart.
News from Scopelitis is intended as a report to our clients and friends on developments affecting the transportation industry. The published material does not constitute an exhaustive legal study and should not be regarded or relied upon as individual legal advice or opinion.