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Your Employer is Required by Law to Reimburse You for Certain Expenses: Are They?

Your Employer is Required by Law to Reimburse You for Certain Expenses: Are They?

Your Employer is Required by Law to Reimburse You for Certain Expenses: Are They?

California law requires employers to pay back employees for “any required expenditures or losses incurred by the Employee in direct consequence of the fulfillment of his or her duties.” If they don’t, employers risk being sued for unpaid wages and overtime.

The law stipulates that in addition to compensation, employees may also be entitled to attorneys’ expenses. Employees may organize a class action if the violation is widespread. If your employer is refusing to reimburse you for expenses you are entitled to reimbursement over, contact PLBSH at (800) 435-7542 to speak with an employment law attorney.

Do California employers have to pay back employees’ business expenses?

Yes, employer compensation for employee-incurred work-related expenses is required by California Labor Code section 2802. This section’s goal is to stop California employers from simply passing their employees’ costs for operating a business onto them.

Employees cannot be forced to give up their claim to these payments by their employers. Even if the employment contract contains language that denies employees the right to repayment, the court will not uphold the validity of that clause. Employers who dismiss employees for exercising their right to reimbursement may be held accountable for wrongful termination.

However, other states are not subject to these regulations. Unless the costs would cause an employee’s earnings to fall below the minimum wage, federal employment law does not mandate repayment for work-related expenses.

What kind of compensation is required by Labor Code 2802?

According to California Labor Code 2802, an expense must be both reasonable and required for the employee to perform his or her work in order to be eligible for reimbursement. Because of his or her job responsibilities, the employee is directly responsible for the costs.

Whether an expense is considered work-related and qualified for reimbursement depends on the specifics and criteria of an employee’s position. Numerous employers have reimbursement guidelines that specify which costs are acceptable.

Typical business-related expenses that qualify for reimbursement include: travel costs, costs associated with using a personal cell phone for work-related purposes, costs associated with using a personal cell phone for conferences, business registration fees, costs associated with a work uniform, costs associated with entertaining business associates, driving costs including mileage reimbursement for distance traveled and tolls paid in a personal vehicle, postage costs, and training or education costs.

Some of these costs, like the mobile phone fees for an employee’s personal phone that is regularly used for work, are frequently only marginally related to the employee’s business. A portion of the employee’s real expenses may be reimbursable in these circumstances. The percentage must fairly represent the frequency with which the expense is related to the job.

What impact does this have on California workers who conduct remote work?

Since the coronavirus pandemic, the right of an employee to reimbursement for business expenses has gained increasing significance. Due to the epidemic, offices are closed, and staff must work remotely. Many of these employees had to invest in home offices and telecommuting equipment in order to keep working. That equipment may be eligible for reimbursement because it is arguably required for the employee’s job.

Typical remote work expenses that can be reimbursed include the costs of online subscriptions, such a paid Zoom account, home utilities, like air conditioning and heating, and home internet bills, as well as office supplies like chairs and desks, printing equipment like the printer, paper, and ink.

These can be compensated by the employer because they are business costs. However, the business acquires the purchased property when the employer reimburses their employee. The item(s) may need to be returned if the employee is fired because it is considered company property.

If you are not being reimbursed then we recommend you contact PLBSH at (800) 435-7542 for a consultation with an employment attorney.

Certified Workers'
Compensation Specialist
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