The Internal Revenue Service has announced that the standard mileage rate for business miles will decline 3.5 cents per mile to 54 cents per mile as of January 1, 2016. The California Workers’ Compensation Institute notes that this means the mileage rate that California workers’ compensation claims administrators pay injured workers for travel related to medical treatment or evaluation of their injuries will need to be adjusted to the new IRS rate for travel on or after January 1, 2016, regardless of the date of injury, though the current 57.5 cents per mile rate should be paid for 2015 travel.
California Labor Code §4600 (e)(2), working in conjunction with Government Code §19820 and Department of Personnel Administration regulations, requires claims administrators to reimburse injured workers for such expenses at the rate adopted by the Director of the Department of Personnel Administration for non-represented (excluded) state employees, which is tied to the IRS published mileage rate. In a December 17 news release (www.irs.gov/uac/Newsroom/2016-Standard-Mileage-Rates-for-Business-Medical-and-Moving-Announced), the IRS announced that as of January 1, 2016, the standard mileage rate will decrease to 54 cents per business mile driven. The IRS bases the standard mileage rate on an annual study of the fixed and variable costs of operating an automobile.
There have been multiple mileage rate changes since 2008, so the Division of Workers’ Compensation has posted downloadable mileage-expense forms under Claim and Court Forms on the Forms page of its website, http://www.dir.ca.gov/dwc/forms.html which show applicable rates based on travel date, and a new form with the 2016 rate has been posted, though it should not be used until reimbursements are being made for 2016 travel. In the meantime, claims organizations should alert their staff and programmers that the rate will decline to 54 cents per mile for travel on or after January 1, 2016.