Sixth Circuit says Pizza Hut-style drivers need full vehicle reimbursement
Pizza Hut drivers who use their own cars can slip below minimum wage if reimbursement is too low. The Sixth Circuit put that risk front and center.
For Pizza Hut managers, the legal risk is not the posted wage alone. It is whether the store’s mileage policy keeps a driver’s total pay above the federal floor once the car, gas, and wear are paid for.
A Sixth Circuit opinion issued March 12, 2024, made that question central in two pizza-driver cases, Parker v. Battle Creek Pizza, Inc. from Michigan and Bradford v. Team Pizza, Inc. from Ohio. The court, which covers Michigan, Ohio, Kentucky and Tennessee, vacated both lower-court rulings and sent the cases back for further proceedings. It rejected the idea that an employer can automatically satisfy minimum-wage rules by using the IRS mileage rate or by calling a reimbursement a reasonable approximation without proving it actually covers the cost of the vehicle.
That matters because the IRS standard mileage rate for business use was 67 cents per mile in 2024, and 30 cents of that amount was tied to depreciation. The U.S. Department of Labor had said in a 2020 opinion letter that employers may reimburse a reasonable approximation of vehicle expenses. But the Sixth Circuit said the real question in a minimum-wage case is simpler and tougher: does the reimbursement actually cover the cost of using the car so wages do not fall below minimum wage?
For Pizza Hut drivers, that turns a routine reimbursement line into a wage-and-hour issue. A driver can look fine on paper and still lose money after fuel, tires, oil changes, insurance and depreciation are counted. That is why the issue lands not just with paychecks, but with store-level decisions about delivery zones, run length and how often workers are asked to absorb the cost of driving their own cars.
The risk is not theoretical. In 2024, MUY Pizza-Tejas, a Pizza Hut franchisee that operated more than 300 locations across eight states, agreed to a $4.75 million settlement over allegations tied to under-reimbursed gas, vehicle upkeep, insurance, cell phones and wear on personal vehicles. That settlement showed how quickly a reimbursement policy can turn into a class-action problem when drivers believe the company is shifting operating costs onto them.
For managers, the practical defense is documentation. Stores should keep mileage logs, the reimbursement formula in use, payroll records showing hourly wages and tips, and route or zone records that show how far drivers are sent and how often they are on the road. Franchise operators should review whether a flat per-run payment, a mileage rate or another formula really matches the miles drivers cover in their market.
In the Sixth Circuit states, the lesson is already clear: if the car is part of the job, the cost of the car has to be treated like part of the wage equation.
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