The Car and Truck Fleet and Leasing Management Magazine

Pizza Hut Driver Sues Over Mileage Reimbursement

August 31, 2004

Reimbursement to employees driving personal vehicles on company business is becoming increasingly contentious, especially if you deliver pizzas. This is a summary of story from on August 24. On June 20, seven lawyers representing delivery driver Franklin Castillo filed a complaint in the Superior Court of the State of California (Los Angeles) claiming Pizza Hut, Inc. failed to reimburse him fully for work-related auto expenses. According to the 14-page complaint, Castillo receives 50 cents per delivery run, which he alleges is well below the actual cost he absorbs operating his personal vehicle on behalf of Pizza Hut. Lawyers representing Castillo are confident the suit will become a class action representing as many as 1,000 Pizza Hut drivers working the chain’s 270 California units. Pizza Hut officials call the complaint unfounded, noting that it is common pizza industry practice to pay drivers 50 cents per order. Castillo’s lawyers say California law requires employers to reimburse employees for all expenses necessarily incurred in the direct discharge of their responsibilities. Fifty cents per delivery doesn’t cover that. IRS media relations spokesperson John Lipold said by phone from Washington, D.C., that he wasn’t aware of any government regulations for delivery-driver reimbursement. The IRS has no power to set or enforce reimbursement standards, he said. All the agency can do is set deductions drivers and operators are allowed to take on their tax returns. Pizza Hut spokesperson Patty Sullivan said that since the company pays drivers at its corporate stores (franchisees are free to pay more if they choose) 50 cents per customer order delivered — not 50 cents per run as stated in Castillo’s complaint — reimbursement per run could be $1 to $1.50. When combined with minimum wage and tips, the total package is fair, she said. Either way, it’s far less than the American Automobile Association’s 2004 cents-per-mile estimates for operating a car (which include charges for depreciation, wear, maintenance and fuel).
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