. This website is an advertisement for Crosner Legal, P.C. The law is more straightforward regarding other tools and equipment. If the employer requires the employee to drive, such as a courier driver, an outside sales person, the employer must cover the employee’s mileage. Labor Code Section 2802 Travel Expense Reimbursements Title 8 of the California Code of Regulations Sections 13700 through 13706 Notice of Proposed Rulemaking, Title 8 of the California Code of Regulations, Sections 13700 through 13706 Text of regulation sections 13700 through 13706 Initial statement of reasons While the Gattuso Court stated that potential adverse tax consequences on the employee did not affect an employer’s method of reimbursement decision, the tax consequences resulting from the employers’ choice of reimbursement must be considered in determining whether the payment provides a sufficient reimbursement. Lab. Employers may require employees to supply their own hand tools (1) if the employees earn at least twice minimum wage, and (2) the hand tools are customarily required in the trade. In the state of California, these lawsuits are fast becoming the rule, not the exception, because California Labor Code section 2802 is particularly strict. However, Labor Code section 2802 does not state how employers must provide reimbursement. What is reasonable for one employer and employee might be different for others. Necessary expenditures or losses include all reasonable costs. California Labor Code section 2802 requires employers to reimburse California employees, using personal utilities, including personal internet, while working from home, a claim under California Labor Code section 2802. Under section 2802 of the California Labor Code, “[an] employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.” Cal. California Labor Code § 2802. The employee wanted both hourses replaced at company expense (what with them being matched Arabians) and used CA labor code 2802 as part of the justification. Refreshed: 2018-05-15 Thus, employers must adequately reimburse employees. In Gattuso, the California Court of Appeal concluded that California employers could satisfy their California Labor Code section 2802 reimbursement obligations through separate reimbursements, or paying California employees enhanced compensation. What costs are subject to expense reimbursement? If you haven’t enacted a fair, accurate, and defensible vehicle reimbursement program, you may already be at risk. Given the various costs associated with owning a vehicle, it would be quite complicated to calculate the actual cost that must be reimbursed. Privacy Policy and Employers that follow California Labor Code section 2802 must promptly reimburse California employees for mandatory business expenses. Under California Labor Code section 2802, employers must reimburse California employees for reasonable and mandatory business expenses incurred while carrying out job duties. Where the employer fails to provide reimbursement, the employee may recover the amount owed, interest, and attorney fees incurred by the employee enforcing their right to reimbursement. “The Court concludes that a fair interpretation of [Labor Code] §§ 2802 and 2804 which produces “practical and workable results,” consistent with the public policy underlying those sections, focuses not on whether an employee makes a request for reimbursement but rather on whether the employer either knows or has reason to know that the employee has incurred a reimbursable expense. Division 3, Employment Relations; Chapter 2, Employer and Employee; Article 2, Obligations of Employer; Section 2802. I am agreeing to Terms of Use, Privacy Policy, and Attorney Advertising Policy. Section 2802 does not specify how employers must reimburse employees. © 2020 Astanehe Law || This website includes general information about legal issues and developments in the law. California law also requires employers to cover any legal expenses (attorneys’ fees) an employee incurs to enforce the rights granted by Section 2802. While DLSE opinion letters are not binding on courts, they suggest how the DLSE will address the issue during administrative proceedings. Where an employer fails to reimburse a California employee for mandatory business expenses, the employee has a claim for damages. One common reimbursement method is to provide the California employee separate reimbursements for actual expenses. Where a California employee receives enhanced compensation reimbursements, the employer must utilize an apportionment method delineating between compensation for labor and reimbursement for business expenses. Our California employment law attorneys can discuss your options with you and help you learn your rights. In response, the DLSE may issue “opinion letters” detailing the DLSE’s position regarding the law and the facts put forth to them. Id. The IRS rate may not always be viewed as reasonable, however. Labor Code Section 2802 Requires Employers To Indemnify Employees, Employees’ Business Use Of Personal Property, California Expense Reimbursement Law Does Not Allow Employees To Waive Their Rights, What Do The Courts Say About Labor Code, Section 2802 And How California Expense Reimbursement Laws Should Be Enforced, The Department Of Labor Standards Enforcements’ Position On California Employment Expense Reimbursement Laws, How To Prosecute Labor Code Section 2802 Claim. California Labor Code §2802. 4th 1137 (2014). California Law Addresses Employee Business Expense Reimbursement. California law mandates that employers reimburse employees for work-related expenses. Under California Labor Code Section 2802 and court decisions in Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal.4th 554 (2007) and Cochran v. Employers in California must reimburse remote employees for expenses they necessarily incur in ... expense they incur under California Labor Code Section 2802. Expert Opinion A Refresher on California Reimbursement Requirements in a COVID-19 World California Labor Code Section 2802 requires employers to reimburse California employees for … Alternatively, the employer may reimburse paying enhanced compensation. The attorney responsible for all communications herein is Zachary Crosner, Esq. Cochran v. Schwan’s Home Services, Inc., 228 Cal. Labor Code Section 2802. Under such circumstances, the employer must make up the difference. Please upgrade today! California Labor Code section 2802 requires employers to reimburse employees for their expenses. Employers desire increased transparency into the reimbursements it is distributing. The Department of Labor Standards Enforcements (DLSE) is chartered with enforcing California’s employment laws. This rule, embodied in California Labor Code Section 2802, prohibits employers from shifting their costs of doing business onto the backs of employees. This is a unique website which will require a more modern browser to work! The California Supreme Court confirmed that employers must reimburse employees for all necessary and reasonable expenses. California law protects employees who use their own money or equipment at work. Please contact Astanehe Law for advice on specific legal issues. As stated above, an employer must reimburse an employee for 100 percent of any “necessary expenses,” which California law defines as for the actual costs incurred in … (a) An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful. Terms of Service apply. App. ... California Labor Laws on Employee Expenses. However, this is likely to only be awarded in a State Court case, not with the Labor Board. The employer is also required to pay interest at a rate of 10% per year on any unreimursed expenses incurred by the employee. The employer did not exercise due diligence towards reimbursement. 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