In Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal. Otherwise, the California employee has a claim under California Labor Code section 2802. . Reimbursement of employee cell phone expenses is governed by California Labor Code Section 2802, which provides: 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 . Under California Labor Code Section 2802 and court decisions in Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal.4th 554 (2007) and Cochran v. California Labor Code § 2802. California Appeals Court Verifies that Employers Are ... Labor Code section 2802 requires 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." Employers desire increased transparency into the reimbursements it is distributing. California Labor Code § 2802: Employers’ Duty to Reimburse. The employer is also required to pay interest at a rate of 10% per year on any unreimursed expenses incurred by the employee. 4th 554, 559 (2007). Blog || Employee Rights Guides || Investor Rights Guides || Wrongful Termination || Stock Broker Fraud || Newsroom || Terms of Use || Privacy Policy || Site Map Michael M. Astanehe || ASTANEHE LAW || 71 Stevenson Street, Suite 400, San Francisco, California 94105 || Astanehe Law Knows Your Rights.Phone Numbers San Francisco   ||   (415) 226-7170           Oakland   ||    (510) 822-2111Email || contact@astanehelaw.com. Lab. California Labor Code §2802. California Labor Code, Section 2804, states that any agreement, implicit or explicit, to waive an employee’s right to full reimbursement for expenses is unlawful and not enforceable. 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. First, you can bring an individual action in State Court or by filing a complaint with the California Labor Board. What is reasonable for one employer and employee might be different for others. California Labor Code § 2802. We went to court. 2802. Please upgrade today! If the employer requires the employee to have a cell phone and make calls on that phone, the employer must cover the cost of the business related calls (private calls are not eligible for reimbursement). While discharging their job duties; 3. California Tenants: Click for our Complete Guide to COVID-19 California Tenant Protections, California Employee Coronavirus/COVID-19 Disability Discrimination, California Employee Expense Reimbursement Lawsuit. How much reimbursement is enough? Thus, employer policies that waive an employee’s right to expenses after a certain deadline are not enforceable. The time limit is not defined in days. This article provides employers with analysis and tips related to expense reimbursement of remote workers in California. The purpose of this statute is "to prevent employers from passing their operating expenses on … Where an employer offering enhanced compensation for reimbursement fails to satisfy the above-mentioned requirements, the California employee has a legal claim. Additionally, the reimbursement amount must reimburse the California employee for all expenses incurred. While DLSE opinion letters are not binding on courts, they suggest how the DLSE will address the issue during administrative proceedings. This means if the out of pocket cost was required for you to complete your job duties, or your boss directed you to spend your own money to accomplish a task for your employer, your employer must pay you back. Where an employer fails to reimburse a California employee for mandatory business expenses, the employee has a claim for damages. by clicking "Submit. 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 … California has seen the cycle of this disconnect for decades. This Labor Code section permits individual to not only recover the amount of the reimbursement they are owed, but also attorneys’ fees as well. Id. The law seeks to prevent employers from unfairly passing operational expenses onto employees. Refreshed: 2018-05-15 Where a wage statement containing enhanced compensation fails to include this, the California employee may have an inaccurate wage statement claim under California Labor Code section 226(a). The Obligation to Reimburse Business Expenses. Division 3, Employment Relations; Chapter 2, Employer and Employee; Article 2, Obligations of Employer; Section 2802. This site is protected by reCAPTCHA and the Google Thus, employment attorneys have had relatively little guidance from the courts on how Labor Code, section 2802 should be interpreted. I am agreeing to Terms of Use, Privacy Policy, and Attorney Advertising Policy. 4th 554 (2007), the California Court of Appeal determined that California employees may receive reimbursement under Labor Code section 2802 as a separate reimbursement or through enhanced compensation. 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. 9/11 Cancer: How is 9/11 and Cancer Connected? Here, the employer risks that an employee could earn less commission income than anticipated, and have the effect of failing to provide sufficient reimbursement for total expenses incurred. In response, the DLSE may issue “opinion letters” detailing the DLSE’s position regarding the law and the facts put forth to them. The California Labor Code requires employers to indemnify employees for all expenses incurred in connection with their employment. What do they say? Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal. The law therefore implies a "reasonable" time element into that obligation. 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. There are a number of laws and regulations that require employers to reimburse expenses that employee incur or to pay for employees use of their own property. There are no bills pending in the California Senate or House of Representatives to change Labor Code, section 2802 or Labor Code, section 2804. . By law, employees are entitled to reimbursement for up to four (4) years from the date the expense is incurred. The general reimbursement statute of the California Labor Code is Section 2802. The primary case is Gattuso v. Harte-Hanks Shoppers, LLC, in which the California Supreme Court outlined the employer’s obligation with regard to California’s Expense Reimbursement Laws. California law mandates that employers reimburse employees for work-related expenses. The penalties over the period of non-payment, plus the attorney’s fees can be substantially greater than the expenses. 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 employer knew or had reason to know of the expenditures; and, 4. Labor Code Section 2802 Requires Employers To Indemnify Employees. California Labor Code section 2802 requires employers to reimburse California employees, “for all necessary expenditures or losses incurred by the employee” while completing work duties. ", © 2020 Crosner Legal. Employees’ failure to comply with expense reimbursement policies should be treated as disciplinary issues rather than grounds for refusing to pay the expense. I also understand and agree that I am not forming an attorney-client relationship with CROSNER LEGAL, P.C. Thus, employers must adequately reimburse employees. California Labor Code Section 2802 outlines employer responsibilities concerning business expense reimbursement. As is a frequent practice, the legislature left this question for future examination by the judiciary. There are always two side to any dispute and CA-DLSE always listens to both sides. Astanehe Law has experience handling California failure to reimburse claims. Our California employment law attorneys can discuss your options with you and help you learn your rights. Necessary expenditures or losses include all reasonable costs. Employers that follow California Labor Code section 2802 must promptly reimburse California employees for mandatory business expenses. Section 2802 does not specify how employers must reimburse employees. Are employees able to reimburse California employees through increased base pay, or must reimbursement be a separate reimbursement? Gattuso at p. 571. If you are a bona fide employee in California and have to pay costs out of your own pocket in order to perform your essential job duties, California Labor Code 2802 is designed to protect you. California Law Addresses Employee Business Expense Reimbursement. The part that is not so simple, however, is how the employer calculates the employee’s reimbursement amount and how the reimbursement is paid. So CLC 2802 is not a sure thing, just a big hill for the employer to climb. What Is Sexual Harassment In The Workplace? There also appears to be no legal basis supporting employers’ policies denying reimbursement when expense reports are submitted untimely or incorrectly. This is a unique website which will require a more modern browser to work! However, Labor Code section 2802 does not state how employers must provide reimbursement. Privacy Policy | Terms Of Use & Attorney Advertising Disclaimer. This field is for validation purposes and should be left unchanged. California Expense Reimbursement Law Does Not Allow Employees To Waive Their Rights. California’s Labor Code, section 2802 has been on the books for decades. Typically, California employees are entitled to reasonable reimbursement for mandatory business expenses such as, traveling for work in a personal vehicle, using a personal cell phone for calls, email, or messaging, using a personal computer for work, using personal utilities, including personal internet, while working from home, and purchasing tools and inventory for the employer. The California Chamber of Commerce and other large business interests have repeatedly sought to change the law to relieve businesses of their obligations. If your employer has failed to reimburse you for mandatory business expenses, contact Astanehe Law. This manual also sets forth the DLSE’s position regarding California’s expense reimbursement laws, including Labor Code, section 2802. Gattuso at p. 575. In general, employers must reimburse the cost of uniforms, travel expenses, tools and equipment required for the job. California Labor Code section 2802(a) states: “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.” This website is an advertisement for Crosner Legal, P.C. The courts have said that “necessary” means “reasonable” under the circumstances. Labor Code Section 2802 – California Employment Law Report. The attorney responsible for all communications herein is Zachary Crosner, Esq. An Employer’s Duty to Reimburse. Expense reimbursement may seem like a small issue in comparison with the other areas of liability facing California employers, but the exposure for not appropriately reimbursing employees can be substantial. It’s simple: employers must reimburse employees for all expenses reasonably and necessarily related to work. Under California Labor Code section 2802, employers must reimburse California employees for reasonable and mandatory business expenses incurred while carrying out job duties. Cochran v. Schwan’s Home Services, Inc., 228 Cal. Reimbursement for mobile employees can be tricky and ambiguous for companies across the country. Given the various costs associated with owning a vehicle, it would be quite complicated to calculate the actual cost that must be reimbursed. Thus, employers must adequately reimburse employees. Employers in California must reimburse remote employees for expenses they necessarily incur in ... expense they incur under California Labor Code Section 2802. 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. 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. There are multiple ways to prosecute a claim under Labor Code section 2802. Necessary expenditures or losses include all reasonable costs. Privacy Policy and Code § 2802(a). The Legislature’s intent is that employees should not bear losses or expenses incurred in the service of their employers. 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 . 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