California Employers Must Reimburse Employees for Necessary Business Expenses
Employers Must Reimburse Employees for Business Expenses
In California, employers are not allowed to pass through business-related expenses to their employees. As such, employers are required to reimburse employees "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." (Lab. Code § 2802.) An employer faces significant financial exposure for refusing or failing to reimburse an employee for these expenses.
What Are Business Expenses?
As stated above, any expense incurred by the employee to complete their work for the employer. Common business-related expenses include:
Use of personal vehicle, tolls, gas
Use of personal cell phones and data plans
Use of personal computer
Business-related travel - flights, hotels, taxis, etc.
Was the business-related expense “Necessary?”
Labor Code § 2802 requires that the expense be necessary – not all expenses are “necessary,” as other cost-free alternatives may be available. For example, if an employee chooses to work or print from their home office instead of going to the office, out of convenience, he or she would likely not have a claim that the work or printing was necessary. He or she could have gone to the employer’s office to perform the work but chose not to, out of convenience.
The employer must know of the work-related expense.
If an employer does not know about a business-related expense, it has no way of knowing that the employee needs to be reimbursed and cannot be penalized for not doing so. However, if the employer knows or should have known about the business-related expense, it can be held liable. In essence, the labor code was designed to prevent employees from concealing from the employer business-related expenses and then later bringing a lawsuit regarding those expenses. As such, for an employer to be liable for failure to reimburse business-related expense it must have been aware that the employee was incurring business-related expenses.
Can employees waive their rights to reimbursement for work-related expenses?
No. Courts have concluded that any waiver of the right for reimbursement is a violation of public policy.
What should I do if I haven’t been reimbursed?
If your employer has required that you use your personal property for business or work-related activities and, then, has refused to reimburse you, you may be able to bring a legal action for reimbursement. The employer may be liable for the reasonable costs of the work-related expenses, interest, and your attorney’s fees. (Labor Code § 2802). You should consult with an experienced Business-Expenses reimbursement attorney. Often, in claims for reimbursement, we find that the employer who has refused to reimburse its employees has also committed other labor code violations.
Lansdown Law - Experienced Business Reimbursement Attorney
Lansdown Law has experience in handling cases where an employer has failed or refused to provide reimbursements for business-related expenses. Therefore, if your employer has not reimbursed your business-related expenses, call us and we can discuss your options and your next steps!
Disclaimer: All materials have been prepared for general information purposes only to permit you to learn more about Lansdown Law, its services, and experience. The information presented is not legal advice, is not to be acted on as such, may not be current and is subject to change without notice.