The IRS has announced that the standard mileage rate for business miles will decrease from 58.5¢ per mile to 55¢ per mile effective January 1, 2009, which will trigger the same reduction in the mileage rate adopted by the Director of the California Department of Personnel Administration (DPA) for non-represented (excluded) state employees, and in the mileage rate that California workers’ compensation claims administrators pay injured workers for travel related to medical treatment or evaluation of their injuries. Workers’ compensation claims administrators should apply the new 55¢ per mile for travel on or after January 1, 2009, regardless of the date of injury, but the old rate of 58.5¢ per mile still applies for travel from July 1 through December 31, 2008.
California law [Labor Code Section 4600 (e)(2)], in conjunction with Government Code Section 19820 and DPA regulations, requires claims administrators to reimburse injured workers for medical mileage at the rate adopted by the DPA Director for non-represented (excluded) state employees, which in turn is tied to the IRS published mileage rate. The IRS normally adjusts the standard mileage rate each fall for the next calendar year based on an annual study of the fixed and variable costs of operating an automobile. Because of surging gasoline prices last summer, however, the IRS made a special adjustment for the last six months of 2008, so as of July 1, 2008, the standard mileage rate was bumped up to 58.5 cent per business mile driven. Now, with the price of gas back down, the IRS has readjusted the rate back down to 55 cents per mile. The IRS’s news release on the new mileage, issued November 24, is posted at www.irs.gov/newsroom/article/0,,id=200505,00.html and DPA’s Personnel Management Liaison Memo, which was issued to all state departments today, is at www.dpa.ca.gov/personnel-policies/pmls.htm. A DWC Newsline on the rate change is expected shortly (DWC Newslines are posted online at www.dir.ca.gov/dwc/dwc_newsline.html). An updated version of DWC’s downloadable mileage-expense form that shows applicable rates based on the travel date is also expected to be posted at www.dir.ca.gov/dwc/forms.html. In the meantime, claims organizations are encouraged to alert their system programmers of the change that takes effect for travel on or after January 1, 2009.