IRS Increases Mileage Reimbursement Rate Effective July 1, 2026
In response to rising fuel prices, the IRS has increased the Optional Standard Mileage Rate used to compute the deductible costs of operating a personal vehicle for business purposes, and to determine the amount of employee reimbursement that is deemed substantiated.
As employers are well aware, California Labor Code section 2802 requires that employees be reimbursed for necessary expenses incurred in performing their job duties. This includes an employee’s use of a personal vehicle for business purposes, such as work-related travel or driving between job sites.
When determining how to reimburse employees for use of a personal vehicle, employers may choose from three methods: (1) actual expense reimbursement, (2) mileage reimbursement, or (3) a flat-rate stipend. The California Labor Commissioner has approved use of the IRS mileage rate as generally a satisfactory method of reimbursement, absent evidence to the contrary.
Effective July 1, 2026, the standard mileage rate for business use has increased to $0.76 per mile which is an increase from the $0.725 rate that took effect January 1, 2026 and which remained in place through June 30.
Employers and employees should divide their 2026 mileage logs into two periods — January through June and July through December — to apply the correct reimbursement rate to each half of the year.
Disability Accommodation At Work Fact Sheet Published
The California Civil Rights Department (CRD) (formerly the Department of Fair Employment and Housing) published a “Disability Accommodations at Work” fact sheet which provides guidance to employers and employees on workplace protections for people with disabilities.
The Fact Sheet addresses the following topics:
- Showing the Need for an Accommodation
- Requesting Accommodations and the Interaction Process
- Supporting Medical Documentation
- Granting and Denying Accommodations
- Leave From Work After Violence
The Fact Sheet sets out what must be shown to establish that the person has a disability recognized by the law and the connection between their disability-related need and their requested accommodation. This means explaining how the accommodation would help them do their job.
As has long been the rule, employers must respond promptly to requests for reasonable accommodation and initiate and continue the on-going interactive process with the employee. It is important to know that everyone – employee and employer alike- must participate in the process in good faith and in a way that does not delay the reasonable accommodation process.
This Fact Sheet also discusses the steps employers should take when requesting supporting medical documentation.
Also included is information pertaining to reasonable accommodations that might be needed if the employee or a family member is a victim of certain acts of violence, including a leave of absence.
Because this Fact Sheet is for informational purposes only, it is not mandatory for employers to distribute or display but it is a good idea to do so.
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