Inflation is at a 40-year high – reaching 8.6% in May, according to a Bureau of Labor Statistics (BLS) news release earlier this month. The rise of consumer product costs, including food and gasoline, have all contributed to this increase. For the most recent one-year period (May 2021 – May 2022), the CPI (consumer price index) is up approximately 8.3%, with food up more than 10% and gas up a whopping 48.7%!
This rate of inflation is affecting both employees and employers. Workers are, of course, finding it ever more difficult to make ends meet. Meanwhile, employers operating in a tight labor market are faced with demands for higher wages while facing pricing pressures of their own.
Fuel prices are of particular concern, and the federal government recently took action to assist workers who incur automobile expenses in connection with their jobs.
Specifically, the Internal Revenue Service (IRS) issued Announcement 2022-13 this month, which increased the standard mileage reimbursement rate to the highest ever announced by the agency: 62.5 per mile. This is the first time in more than a decade that the IRS has made a mid-year adjustment to the reimbursement rate; the new rate is effective July 1, with the old rate (58.5/mile) applicable for the time period January 1, 2022 – June 30, 2022.
Unfortunately, simply reimbursing employees for their mileage expense is not likely to retain top talent; rather, employers must look at other compensation adjustment strategies to maintain...
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