The Lyon Firm reviews cases of pizza delivery driver under-reimbursement. If you are a pizza delivery driver and feel your employer has not been properly reimbursing you for related job expenses, contact us for a free consultation. Compensation may be available.
Pizza delivery drivers have employment rights that are violated frequently, and as a result lawsuits have been filed that allege companies take advantage of drivers to pad their own pockets.
If you are a pizza delivery driver and feel you have been cheated out of wages or driver reimbursements, contact our firm to discuss your legal options. Common violations include the following:
- Mileage under reimbursement
- Failure to pay minimum wage
- Tip-pooling violations
- Missed breaks
- Credit-card processing fees deducted from drivers’ tips
What is the Pizza Delivery Driver Reimbursement Law?
Under federal labor law, in the language of the Department of Labor (DOL), employers are urged to “reimburse a reasonable approximation of expenses incurred for the employer’s benefit rather than the actual amount of expenses incurred.”
Employers may use an “appropriate methodology,” which can be rather subjective. But some cases are clear-cut, and it is no secret that employers would want to pay out as little as possible to grow their corporate profits.
Approximations are generally used for pizza delivery driver reimbursement because exact calculations may not be practical, or possible. It may not be possible to calculate exact vehicle depreciation, fuel usage, especially in cases where a vehicle is used for both personal and business purposes.
The federal Fair Labor Standards Act (FLSA) and state minimum wage laws require employers to reimburse employees for business-related expenses to ensure they receive at least the minimum hourly wage after any other expenses are deducted from their pay.
The federal law allows employers to reimburse expenses at a rate lower than the IRS standard rate. Some companies use the IRS rate but it is optional, not required.
According to the DOL, a fixed expense like a vehicle registration fee might not need to be reimbursed, but variable expenses, like fuel costs, would be. The reimbursement schedule should align with the primary use of the vehicle, whether mostly personal or for business purposes. Many times an employer will approximate the expenses and reimburse delivery drivers accordingly.
Can You File a Pizza Delivery Reimbursement Lawsuit?
Several employers have faced legal action regarding how they reimburse hourly employees for use of their own vehicles for business-related operations.
A recent case in Cincinnati saw Domino’s Pizza as a defendant against a plaintiffs who claimed pizza franchise owners paid delivery drivers at or below minimum wage and, at the same time, required them to pay for their own delivery expenses like vehicle maintenance, insurance, vehicle wear and tear. The pizza chain settled and each member of the class will receive up to $6,000. A similar case in Dayton, Ohio awarded drivers roughly $2,000 each for labor violations.
In many cases, no portion of a delivery fee actually goes to the drivers, an issue that attorneys intend to remedy in the future. Large pizza chains like Pizza Hut and Domino’s have been named defendants in wage theft lawsuits, as have much smaller operations.
Plaintiffs have argued that employers are obligated to reimburse employees at (or near) the IRS mileage rate or pay for actual expenses, or whether their own “reasonably approximate” expense schedule was fair.
Many delivery drivers, for example are reimbursed a flat rate of $1.00 per delivery, yet that might fall well below the IRS suggested reimbursement rate if the average delivery route is four or five miles.
Lawsuits claim drivers are required to use their own vehicles to deliver and incur various expenses, including gasoline costs, replacement parts, repairs, maintenance, insurance, taxes, and license and registration expenses, and vehicle depreciation. These costs, lawyers argue, total far more than drivers are typically reimbursed.
Plaintiffs also argue the costs associated with delivery driving are higher than that of the average driver with frequent stopping, starting, and braking.
What is Lawful & Proper Pizza Delivery Driver Reimbursement?
In 2020, the Department of Labor issued Opinion Letter FLSA2020-12, which addressed the expenses and reimbursements for hourly delivery drivers.
The Department pointed to the plain language of its Wage and Hour Division regulation, which allows employers to reimburse employees for a “reasonable approximation of expenses” incurred for an employer’s benefit.
Importantly, the Labor Department says employers are not required to utilize the IRS’s annual standard mileage in calculating reasonable expenses, which can sometimes translate to a lower delivery driver reimbursement rate.
The opinion also noted that employers are not required to reimburse employees for expenses “normally incurred by the employee for his own benefit,” which muddies the water further when a personal vehicle is used for both personal and business-related purposes.
Why Should I Seek Legal Action?
American employees are regularly victims of labor violations that unfairly cheat them out of earned wages or incurred expenses. The most vulnerable employees are those in hourly positions, and generally with little management leverage. With the help of a wage and hour lawyer, delivery drivers may be able to join a class action lawsuit and recover unpaid expenses.
Class action wage and hour cases can result in large settlements or verdicts, and the U.S. Department of Labor (DOL) estimates wage and hour settlements since January 2007 have totaled over $3.5 billion.
Joe Lyon is a highly-rated wage and hour lawyer and Fair Labor Attorney representing plaintiffs nationwide in a wide variety of fair labor violations and delivery driver under-reimbursement claims.
What are Common Wage Theft Violations?
Wage and hour cases usually involve multiple labor violation allegations. When unscrupulous employers try to cut corners, it is usually not in a single act but in a systematic way that violates the law in many ways.
Any negligent employers can be held liable and Unpaid Expenses may be recovered through legal action. Common employer violations include:
