Reimbursing Delivery Drivers’ Mileage Just Got More Confusing

A recent federal appeals court ruling on how to reimburse drivers who make deliveries with their own vehicles is sowing confusion after it stopped short of clarifying the proper standard.

Federal district courts have been divided over whether the IRS’ standard mileage rate or the US Labor Department-endorsed “reasonable approximation” of the actual expenses drivers incurred satisfies the Fair Labor Standards Act’s minimum wage requirements. The US Court of Appeals for the Sixth Circuit concluded it was neither in a dispute that included a Domino’s franchisee and its pizza delivery drivers.

The March 12 decision—the first from a federal ...