Wage Law

Tomorrow, the California Division of Labor Standards Enforcement will conduct hearings into new proposed regulations governing travel expense reimbursements. The regulations pertain to travel and automobile expenses, and reimbursements for meals and other expenses. They would authorize the Division of Labor Standards Enforcement ( DLSE) to take expense reimbursement claims, and for employees to recover attorney's fees on such claims.

The regulations appear to be a response to the holding in Gattuso v. Harte-Hanks Shoppers, Inc., a 2005 appellate case, currently under review by the Supreme Court (fully briefed and awaiting a hearing date), which permitted employers to purport that higher pay for an employee could be deemed to be inclusive of expenses, and pay such a rate in lieu of providing travel reimbursements..

The proposed regulations would prohibit the kind of arrangement authorized by the Court of Appeal in Gattuso. The proposed regulations further provide that employers will pay the IRS mileage allowance, currently set at 48.5 cents per mile. Travel expenses would be calculated under any of three standards: (i) payment of actual expenses; (ii) payment under the IRS standard meal and incidental expense allowance under Publication 1542; or (iii) a per diem at the IRS-set rate. To use the per diem method, an employer must notify the employee in advance. The proposed regulations also add to the employer's pay stub documentation, which would begin to require an (i) itemized statement in writing, (ii) explaining the computation of the mileage reimbursement, (iii) including the beginning and end of the time period for which the mileage reimbursement check is being issued, (iv) the rate of reimbursement used, and (v) the number of miles being reimbursed.

The DLSE has scheduled only this one public hearing on these proposed regulations. The hearing will be in San Francisco, as follows:

Date:  February 7, 2007
Time:  10:00 a.m.
Place:  Hiram Johnson State Building, Auditorium
455 Golden Gate Avenue
San Francisco, CA 94102

Public comment will begin promptly at 10:00 a.m. and will conclude at 12 noon or when the last speaker has finished his or her presentation, whichever occurs last. At the hearing, any person may present statements or arguments, orally or in writing, relevant to the proposed action. DLSE requests, but does not require, that persons who make oral comments at the hearing also submit a written copy of their testimony at the hearing.

The written comment period also ends tomorrow. Any interested person, or authorized representative, may submit written comments to DLSE relevant to the proposed regulatory action. The written comment period closes at 5:00 p.m. on February 7, 2007. All comments must be submitted in writing (by mail, fax, or email) and received by that time by DLSE's Regulation Coordinator. Submit comments to:

Susie Smith, Regulation Coordinator
Division of Labor Standards Enforcement
Department of Industrial Relations
801 "K" Street, Suite 2100
Sacramento, CA 95814
Email: [email protected]
Fax: (916) 322-1267