Parts Authority Under-Reimbursed Delivery Drivers for Business Expenses, Lawsuit Alleges

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A proposed class and collective action claims Parts Authority has failed to properly reimburse delivery drivers for business-related expenses, and thereby caused their wages to fall below the federal and state minimum.

According to the case out of New York, although the car parts distributor reimburses delivery drivers for the use of their own vehicles to make deliveries to customers, the reimbursements are insufficient to cover the workers’ actual expenses. Per the lawsuit, the federal Fair Labor Standards Act (FLSA) and state minimum wage laws require employers to sufficiently reimburse employees for business-related expenses to ensure they receive at least the minimum hourly wage after any unreimbursed expenses are deducted from their pay.

The lawsuit claims defendants Parts Authority, LLC; Parts Authority, Inc.; and an individual executive have “systematically under-reimbursed” drivers in amounts sufficient to trigger minimum wage violations.

According to the suit, Parts Authority hires W2 employee drivers at its more than 200 nationwide stores for the “last mile” or “last leg” portion of deliveries, i.e., from the defendants’ stores or warehouses to its customers. The case claims drivers are required to use their own vehicles to deliver Parts Authority’s products and in the process incur various expenses, including costs for gasoline, replacement parts and fluids, repairs, maintenance, insurance, taxes, and license and registration expenses, not to mention vehicle depreciation.

Instead of reimbursing drivers’ actual expenses, however, Parts Authority pays them a flat rate of roughly $0.75 to $1.00 per delivery, the case relays. With an average delivery distance of five miles, the defendants therefore reimburse drivers between approximately $0.15 and $0.20 per mile, according to the suit.

The lawsuit argues that the defendants’ reimbursement rate falls well below the IRS standard mileage reimbursement rate of between $0.575 and $0.56 from 2015 to 2021, which represents “a reasonable or conservative approximation” of the average driver’s costs to own and operate a vehicle for business purposes. Moreover, the costs associated with delivery driving are higher than that of the average driver, the suit adds, noting that the nature of the delivery business includes frequent stopping and starting, frequent braking, short routes and driving under time pressures.

The case claims that because Parts Authority’s delivery drivers were paid at or close to the minimum wage, the defendants were legally obligated to reimburse the full amount of their business-related expenses. Parts Authority’s failure to do so constitutes a “kickback” to the defendants such that the hourly wages paid to delivery drivers “are not paid free and clear of all outstanding obligations to Defendants” and fall below the federal and state minimum.

The lawsuit goes on to claim that Parts Authority has caused delivery drivers to work past the end of their scheduled shifts without pay and failed to provide adequate overtime wages for the hours worked in excess of 40 each week. The case alleges the defendants owe spread-of-hours pay to drivers who work more than 10 hours in a day.

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