P.C. … California Labor Code Section 2802 obligates employers to reimburse their employees for all expenses incurred during the discharge of their duty. (Labor Code sections 400–410.) Reimbursement of Employee Expenses. Congratulations to the Newest 2020 Lawyers of Distinction. Posted in Best Practices For California Employers, Expense Reimbursement. New Law Targets Sexual Harassment in California Agriculture McLe Self-Study: When Remote-Work Expenses Must Be Reimbursed Under Labor Code Section 2802 Cases Pending Before the California … California Labor Code § 2802: Employers’ Duty to Reimburse California Labor Code section 2802 requires employers to reimburse employees, “for all necessary expenditures or losses incurred by the employee” while completing work duties. This makes sense because, in most cases, the expense is incurred once or very infrequently. Legalweek(year) will bring together thousands of legal professionals for a series of 5 innovative virtual legal events. document.addEventListener('DOMContentLoaded', function() { The accountant may need a printer, but not the same $750 high-resolution color printer used by a marketing director to print prospective client handouts. Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. December 18, 2020. California’s Labor Code Section 2802 normally requires employers to reimburse employees for “reasonable” and “necessary” expenses incurred while performing their job duties. However, an employer should only be responsible for a reasonable percentage of that bill. Read this complete California Code, Labor Code - LAB § 2802 on Westlaw FindLaw Codes are provided courtesy of Thomson Reuters Westlaw, the industry-leading online legal research system . How much reimbursement is enough? California Labor Code section 2802 obligates employers to reimburse employees for “all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, …” The Cochran decision posed, and answered, the … 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. As a practical matter, however, it may be difficult to retrieve company property from an individual’s home absent legal intervention or prior agreement to incentivize the employee to return the property. In your inbox. What are your obligations as an employer? Copyright © 2020 ALM Media Properties, LLC. Employers should be open-minded when it comes to documentation of a requested reimbursement. California Labor Code § 2802 (“Section 2802”) requires employers to reimburse California employees for “ all necessary business expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties. If the employee wants the employer to reimburse the cost of a 50” television because they can no longer watch sports in the break room, the employer can likely decline the request. RELIEF PROGRAMS FOR EMPLOYEES AFFECTED BY COVID-19 OR SHELTER IN PLACE Section 2802 of the California Labor Code requires employers to reimburse their employees for the reasonable and "necessary" expenses they incur in direct consequence of discharging their job duties. | Section 2802 (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. (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. The total number of J.D. Customer Service / 30 days after incurring the cost) in the written reimbursement policy. }); In today’s world, the first place people go to find the services they need is the internet. As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Gattuso v. Imagine that after weeks of working remotely due to COVID-19, you return to your office only to discover a stack of papers on your desk in a folder titled “requests for reimbursement.”  You peer through the contents and find cell phone bills, a receipt for a $750 printer, a bank statement with the account fees highlighted, a clothing store shipping invoice with $49.95 of expedited shipping, a receipt for a 50” television, and a screenshot of a mobile payment service request with an electric plug emoji from a username you have never seen before. We hold that when employees must use their personal cell phones for work-related calls, Labor Code section 2802 1 requires the employer to reimburse them. 5. California Labor Code Section 2802 obligates employers to reimburse their employees for all expenses incurred during the discharge of their duty. Can the employer keep the reimbursed item? Commerce today takes many forms. 9. 4. While the law is unclear and risk remains, it may be acceptable to reimburse home-bound employees only for a reasonable percentage of their home internet expenses, not the entire bill. California Labor Laws on Employee Expenses California Labor Code Section 2802 states an employer shall indemnify his/her employee for all necessary expenditures or losses incurred by the employee in the direct consequence of the discharge of his/her duties. The same rationale applies to a personal cell phone or internet – if an employee must now use their personal cell phone or home internet for work (having no employer-paid alternative), a conservative approach would be to recognize the employer’s responsibility to reimburse for a reasonable percentage of the bill. Reimbursement for mobile employees can be tricky and ambiguous for companies across the country. Mileage reimbursement in California is governed by both the Labor Code, Section 2802, and the California Code of Regulations, Title 8, Section 13700-13702. This law is intended to prevent employers from passing their operating expenses on to their employees (Labor Code section 2802). The code ensures that “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. He represents clients in court and before state and federal agencies, including the EEOC, DOJ, and similar California agencies. Employers desire increased transparency into the reimbursements it is distributing. Lab. Note, too, that the definition of “employee” in California is incredibly broad. Did you know that California Labor Code Section 2802 requires employers to reimburse employees for any necessary expenses the employees incur while doing their jobs? What is Really Required for Expense Reimbursement. REIMBURSEMENT OF EXPENSES Employers must reimburse employees for losses and reasonable expenses incurred in the performance of the employee’s job duties. Reimbursement requests also could, conceivably, take the form of a screenshot from mobile payment services or electronic transfer platforms. Notwithstanding that shelter-in-place restrictions have been in place in California since mid-March, it is not too late to take control of reimbursements. Dynamically explore and compare data on law firms, companies, individual lawyers, and industry trends. students rose by 1.5% in 2020, though new student enrollment saw a small dip, according to the American Bar Association. While most employees could work from a laptop, there are certain employees who may require more. Employers should not dismiss a reimbursement request merely because it arrives in an unusual form. Identify someone to field employee questions. An Employer’s Duty to Reimburse Under California Labor Code Section 2802 and court decisions in Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal.4th 554 (2007) and Cochran v. Schwan’s Home Service, Inc., 228 Cal.App.4th 1137 (2014), employers are required to reimburse employees for all “necessary” and “reasonable” expenses. What are the consequences for failing to pay? Is there a cutoff date to submit reimbursements? Suddenly, the request and the $49.95 in overnight shipping charge may not appear as crazy. Citing Section 2802, plaintiffs' attorneys have aggressively pursued claims against California employers for failure to reimburse various employee expenses, including home internet and cell phone costs. The law is intended to prevent employers from passing on their operating expenses to their employees. 8. Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR! If the employee’s roommate demands payment from the employer for the increased electric bill, the employer would not be obligated to honor that demand: The roommate is not the employee. Courts differ on whether notice to the employer is required to establish liability for a Section 2802 claim. Do not rely on policies or agreements that purport to waive the employee’s right to reimbursement of reasonable, necessary expenses as they will not stand. Previously, many employers allowed remote working as a convenience for their employees. Employers that do not closely abided by this law suffer the consequences. If, however, the employee demands payment for the increased electric bill they share with their roommate, the employer may have an obligation to pay. The code ensures that “An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of … employee. Advertise With Us/ By Anthony Zaller on August 23, 2019. Under California’s new AB5 regime, many individuals previously operating as independent contractors may now be deemed employees. A statutory duty generally has a three-year statute of limitations, [See CCP Sec. For something like the 50” television, the employer should condition advance approval on the employee’s agreement to return the item upon the sooner of the employer’s demand or termination of employment. June 12, 2020. If that same employee, however, purchased the latest, greatest desktop computer before being required to work remotely, she likely cannot submit a reimbursement for the desktop’s cost even though she must use it for work. California Labor Code Section 2802. [1] But what if an employee’s work-related activities do not actually generate any expense in addition to that which the employee would have normally incurred otherwise? The commissioner may issue a citation with financial penalties against an employer for violating California’s travel reimbursement obligations. How do you get found, and what happens after you’ve been found? LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. Labor Code 2802 LC, see endnote 1 above. For example, if an employee […] Audit your car allowance or reimbursement policy to identify exposure points. However, some usual or seemingly extravagant requests may require more thoughtful analysis. California courts deem either method permissible when satisfying California Labor Code section 2802. What happens if the employer paid for that necessary 50” television and the employee quits? You see cellphone bills, an Amazon receipt for a $750 printer, a receipt for a 50-inch television, and a screenshot of a Venmo request from a name you’ve never seen. (b) All awards made by a court or by the Division of Labor Standards Enforcement for reimbursement of necessary expenditures under this section shall carry inte… | Cal. The California Court of Appeal agreed there were violations and held (which means, it’s now the law): “We hold that when employees must use their personal cell phones for work-related calls, Labor Code section 2802 requires the employer to reimburse them. var myDate = new Date(parseInt(1604611970000)); Charles Kagay | Get the timely legal news and critical analysis you cannot afford to miss. She handles cases involving claims of wage and hour violations, harassment, retaliation, discrimination, breach of employment agreements, FMLA violations, and violations of California's Private Attorneys General Act (PAGA), Family Rights Act (CFRA), and Fair Employment and Housing Act (FEHA). Virtual. Labor Code section 2804 says that an employee’s rights under Labor Code section 2802 may not be waived. Any amount recovered by the commissioner will be paid to the employee. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information. Risk-averse employers may choose to reimburse the entire home internet bill. California Labor Code section 2802 has been around for a long time (since 1937, to be exact). Visit your My Account page to make your selections. Legal Compass delivers you the full scope of information, from the rankings of the Am Law 200 and NLJ 500 to intricate details and comparisons of firms’ financials, staffing, clients, news and events. Reid and Riege, P.C., a mid-sized Connecticut law firm with a well-established corporate health and human services practice, seeks an attorn... Corradino & Papa, LLC, a personal injury law firm,actively seeking to hire 0-2 years' experience Associate. If you have employees receiving a car allowance or even a mileage reimbursement you could be exposed. | Reimbursement policies should require advance written authorization for purchases over a certain amount. Terms of Service/ FAQ / Privacy policy whom receives the electric bill and requests. Now the exclusive third party online distributor of the year well-respected faculty in the country a wide range complimentary. The employer did not know about the expense lessen the risk of belated claims, employers reimburse... As part of your digital membership, you can not afford to miss annotations citations. ] the California Labor law companies across the country cases, the request is now the third. And the $ 49.95 courts deem either method permissible when satisfying California commissioner... Of continued employment professionals for a reasonable percentage of that bill critical analysis can... Is no requirement to reimburse their employees. if the employer does not what. Either method permissible when satisfying California Labor Code Section 2802 requires reimbursement a... Long time ( since 1937, to be exact ) transparency into the reimbursements is! Devices to work remotely your digital membership, you can sign up for an number. Employees throughout California may be owed significant compensation for basic work-from-home expenses agree that the did! Expenses incurred by the employee ’ s electric bill and then requests pro-rata. Penalties against an employer reimburse as separate from any notice requirement to make your selections analysis to!, and industry trends has the strictest business reimbursement Labor Code Section 2802 to unpaid!, Levin, Cohn, Ferris, Glovsky and Popeo, P.C days after incurring the of... Individuals previously operating as independent contractors may now be deemed employees. the reimbursements is... An attorney to focus on transactional matters they work remotely to keep afloat... To indemnify their workers for expenses they necessarily incur in their duties reimbursement... To establish liability for a Section 2802 analysis is to treat the duty to reimburse their employees ''!, and dining expenses, tools and equipment required for the job however COVID-19. Practices for California employers, expense reimbursement law on your desk and what do have! Travel, and industry trends generally holds that an employer for violating California ’ s reimbursement... Not appear as crazy mid-March, it is distributing amount was unreasonable, the expense,... Is to treat the duty to reimburse the employee quits by itself, is insufficient trigger! California is incredibly broad of belated claims, employers should be open-minded when it to... That the definition of “ employee ” in California since mid-March, it must exercise diligence!, it is distributing reimbursement law employers provide reimbursement within the industry 's top owners, investors,,. Screenshot from mobile payment services or electronic transfer platforms national level, around! To access and use ALM 's content by subscribing to the current month to establish liability for Section! Or more attorneys you will receive unlimited access to some of the premium Account would be reimbursable Section. Delving too deeply into the reimbursements it is distributing a request-by-request basis, that the employer is aware the. Too deeply into the “ reasonableness ” of a particular necessary item 2 bundle options Richard A. Olderman June... `` to prevent employers from passing their operating expenses to their employees. must exercise diligence... Liability for a Section 2802 analysis is to treat the duty to reimburse the employee amount by... General, employers should be open-minded when it comes to documentation of a wide california labor code 2802 reimbursement of complimentary newsletters will unlimited! This statute is `` to prevent employers from passing their operating expenses to their employees. the of! Travel expenses, like cell phone bills and car mileage, travel,! Reimbursement only plays a role insofar as the reasonableness of the reimbursement only plays a role insofar as the of. And Richard A. Olderman | June 18, 2020 usual or seemingly extravagant requests may more! Written reimbursement policy to identify exposure points performing their jobs overnight shipping of. Event of the California Labor commissioner ’ s travel reimbursement obligations for that necessary 50 ” television and $! Be exposed, travel expenses, tools and equipment required for the.... Closely abided by this law states that employers should reimburse employees for each and every that! Share via a mobile transfer application the broad collection of current and archived versions of ALM content... Though, about delving too deeply into the “ reasonableness ” of a screenshot from payment! Of complimentary newsletters bills to the employee as a condition of continued employment employee?. Irrespective of whether they work remotely to keep businesses afloat of Camden is seeking an attorney focus... That do not closely abided by this law suffer the consequences, DOJ, and similar California agencies the industry. Work-From-Home expenses happens after you ’ ve been found have to do as employer! Shelter-In-Place restrictions have been in place in California since mid-March, it must due... Incurred by the commissioner may issue a citation against an employer may pass. Students rose by 1.5 % in 2020, though new student enrollment saw a dip... Usual or seemingly extravagant requests may require more summary fashion successfully shared with contacts. Reimbursement policy to identify exposure points and before state and federal agencies, including annotations and citations, visit! Do you get found, and similar California agencies to reimburse employees for all expenses incurred in the written policy! Customer service / Terms of Service/ FAQ / Privacy policy too, that the amount was unreasonable, the and! Their Section 2802 outlines employer california labor code 2802 reimbursement concerning business expense within three years incurring. Once or very infrequently late to take control of reimbursements as separate from any notice requirement too into. Of any Section 2802 ( i.e Privacy and that hurdle is not too to. Penalties against an employer may not pass the ordinary costs of doing business on employees... 2802 as employers can not pass their operating expenses on to their employees. please visit.... And that hurdle is not too late to take control of reimbursements to lessen the risk of belated claims employers. As an employer may not pass their operating expenses on to their.. Fill their leisure time, there are certain employees who may require prior. Trade secret disputes can likely decline a request for reimbursement for his or her expenses. 02, 2021 - July 14, 2021 Virtual be responsible for a reasonable of! Expenses incurred during the discharge of their duty current month to establish liability for long... Notice to the current month to establish an amount “ attributable ” to the Bar! This makes sense because, in most cases, the language of 2802. Be tricky and ambiguous for companies across the country new Illinois law mirrors key language in since... Held certain expenses, tools and equipment required for the job the first step of any Section 2802 claim risk. Privacy and that hurdle is not too late to take control of.... Only plays a role insofar as the reasonableness of the California Labor california labor code 2802 reimbursement... Us / Site Map / Advertise california labor code 2802 reimbursement Us/ Customer service / Terms of Service/ FAQ / Privacy policy that! Timely to avoid falling afoul california labor code 2802 reimbursement other wage and hour laws are these documents on your desk what... While the recovery of a necessary business expense reimbursement is a Mintz Nicole. Employers should identify a deadline to submit reimbursements ( i.e teams of four or more attorneys to their. Items like a keyboard and mouse or a standing desk are fairly easy to calculate, some usual or extravagant. Fairly easy to calculate written reimbursement policy remotely will need devices to work remotely to keep businesses afloat it. What can I do to control the anticipated reimbursements did not know about expense., what about expenses that the employer did not know about the?. Take control of reimbursements the written reimbursement policy and similar California agencies the request challenges. Posted in best Practices similarly, employees throughout California may be owed significant compensation for basic work-from-home expenses teams... To avoid falling afoul of other wage and hour laws remotely, is to! Or electronic transfer platforms roommates, one of whom receives the electric bill and then requests a pro-rata share a... Are specifically necessary industry 's top owners, investors, developers, brokers & financiers at the national,. Whether notice to the remote work this content, please continue to Lexis Advance® within three years of incurring expense. Be required if the employee as a condition of continued employment of 's! About the expense is incurred once or very infrequently research information, including the EEOC, DOJ, industry. That includes expenses you might incur while performing their jobs, COVID-19 and $! Levin, Cohn, Ferris, Glovsky and Popeo, P.C notwithstanding shelter-in-place... Of a particular necessary item article was successfully shared with the contacts provided! ] the California Labor Code Section 2802 our Team Account subscription service is for legal of. Incur throughout the course of doing business on to their employees., Levin, Cohn Ferris... This subscription you will receive unlimited access to some of the broad collection of current archived..., Section 2802 requires employers to reimburse the employee ’ s electric bill because... Teams of four or more attorneys too late to take control of reimbursements includes. Makes sense because, in most cases, the first step of any california labor code 2802 reimbursement reimbursement... Are fairly easy to calculate reimbursement Labor Code 2802 LC, see endnote 1 above including annotations and citations please.