Massachusetts Mileage Reimbursement Basics

Introduction

From the lively streets of Boston and the idyllic landscapes of Cape Cod, Massachusetts is a state teeming with vitality, vibrant culture, and a thriving business sector. As companies endeavor to retain exceptional talent within the Bay State, ensuring fair reimbursement for employee mileage emerges as a pivotal factor in fostering a contented workforce. But what is the Massachusetts mileage reimbursement rate for 2023? What is the Massachusetts state law on mileage for jobs? Does such a thing even exist? 

This article addresses these questions by unraveling the web of rules, regulations, and optimal approaches needed to equip employers and employees with the knowledge and confidence to navigate fair reimbursements in the Commonwealth of Massachusetts.

Do you have to reimburse for mileage in Massachusetts?

Absolutely. When it comes to mileage reimbursement and its enforcement through legal channels, Massachusetts stands alongside Illinois and California as one of the three states that mandate employers to provide reimbursement for work-related travel. There are labor and tax laws in play that require workers to be reimbursed for their business-related vehicle costs, laws which we will describe in detail in the sections below. So, suppose you have employees who hit the road in the Bay State. In that case, it’s essential to have a robust mileage reimbursement policy to meet these legal obligations and maintain a positive employer-employee relationship – otherwise, a company could face steep fines and other detriments.

What is the Massachusetts mileage reimbursement rate in 2023?

Massachusetts follows the federal standard mileage rate the Internal Revenue Service (IRS) set. The IRS determines this rate yearly by considering global fuel costs, maintenance expenses, and more. For 2023, the rate is $0.655 per mile driven for business purposes – most courts recognize this figure as the appropriate rate. However, it’s important to note that different organizations within the state may have their own specific mileage reimbursement rates for their employees. 

For instance, government agencies or certain private companies may establish a different rate based on their internal policies or agreements. Therefore, it’s crucial to consult your organization’s specific guidelines or contact the appropriate authorities to determine the exact reimbursement rate applicable to employees in Massachusetts. Understanding and adhering to reasonable mileage reimbursement rates ensures that your employees are adequately reimbursed for their travel expenses, encourages accurate record-keeping, and helps maintain compliance with state and federal regulations. 

Massachusetts average mileage reimbursement rates

When it comes to average mileage reimbursement rates, Massachusetts falls roughly in line with the national average, which is approximately $600.[1] Employers in Massachusetts typically follow this benchmark when calculating the reimbursement amounts for their employees’ business-related travel. While the average mileage reimbursement rate may provide a starting point, assessing your organization’s unique circumstances is crucial, as is considering any applicable state or industry-specific regulations. 

By offering a competitive mileage reimbursement rate that aligns with or surpasses the average, companies can attract and retain talented employees more inclined to perform business-related travel, run errands, or meet with clients and customers. Providing adequate reimbursement not only demonstrates your commitment to fair reimbursement but also fosters employee satisfaction and loyalty, ultimately benefiting your organization as a whole.

Massachusetts mileage reimbursement tax and labor laws

What are the rules for mileage reimbursements in Massachusetts? The state has specific labor laws to protect employees. Meanwhile, employers ought to make themselves aware of these laws to maintain compliance and avoid potential legal issues. 

Code of Massachusetts Regulations 27.04

According to the Code of Massachusetts Regulations, employees must receive vehicle reimbursements. Not only that, workers must be fairly paid for the time and resources they invest in work-related travel. The code specifically uses broad wording: “An employee required or directed to travel from one place to another after the beginning of or before the close of the workday shall be reimbursed for all travel time and shall be reimbursed for all transportation expenses.”[2] There are limitations, however, as this requirement only applies to individuals in specific positions. Excluded from this list of jobs are professional services, agricultural and farm work, rehabilitation or training programs, seasonal camp counselors, counselor trainees, members of religious orders, and outside sales workers who sell products away from their employer’s premises without making daily reports.

The Massachusetts Wage Act

The Massachusetts Wage Act serves as the primary legal framework for employee reimbursement, including mileage and transportation expenses reimbursement. Under this act, employers must provide fair refunds for expenses employees incur while performing their job duties, including mileage and transportation costs. Failure by employers to reimburse employees for expenses, including mileage, constitutes a violation of the act. The Massachusetts Wage Act imposes severe penalties for such violations, including the mandatory tripling of unreimbursed expenses. These types of claims can have significant value. This is particularly relevant for delivery drivers, visiting nurses, home health aides, salespeople, and others who extensively drive during their workday.[3]

Employers who fail to comply with Massachusetts mileage reimbursement labor laws, including the Massachusetts Wage Act, may face legal consequences. The Wage Act penalizes employers, including mandatory triple damages, attorney’s fees, and other potential liabilities. Employees denied proper mileage reimbursement can pursue legal remedies to recover the unreimbursed expenses and seek appropriate reimbursement.

Conclusion

Massachusetts mileage reimbursement labor laws play a crucial role in safeguarding the rights of employees. By understanding these laws, employers and employees can confidently navigate the complexities of mileage reimbursement. Employers must fulfill their obligations to provide reasonable reimbursement for transportation expenses. At the same time, employees should be aware of their entitlements and take appropriate action if they are not receiving proper refunds. Adhering to these laws fosters a harmonious work environment and upholds the principles of fairness and equity in the employment relationship. Ultimately, by staying informed and seeking legal guidance when necessary, employers and employees can navigate the landscape of mileage reimbursement in Massachusetts with clarity.

Sources

[1] Mileage Reimbursement Rates for Workers’ reimbursement | Mass.gov

[2] Department of Labor Standards, Code of Massachusetts Regulations (CMR), 27.04(4)

[3] Massachusetts General Law (MGL) – Part I, Title XXI, Chapter 151, Section 2 

Disclaimer

Nothing in this blog post is legal, accounting, or insurance advice. Consult your lawyer, accountant, or insurance agent, and do not rely on the information contained herein for any business or personal financial or legal decision-making. While we strive to be as reliable as possible, we are neither lawyers nor accountants or agents. For several citations of IRS publications on which we base our blog content ideas, please always consult this article: https://www.cardata.co/blog/irs-rules-for-mileage-reimbursements. For Cardata’s terms of service, go here: https://www.cardata.co/terms.