If you feel that you have a case or issue regarding business expenses that you were forced to pay for but were never reimbursed, please consult a California employment law attorney. California Labor Code § 2802. Id. CA 2802 I understand and agree that by clicking "Submit" and transmitting information to CROSNER LEGAL, P.C. Additionally, the reimbursement amount must reimburse the California employee for all expenses incurred. 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. 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. The Legislature’s intent is that employees should not bear losses or expenses incurred in the service of their employers. Contact Astanehe Law to discuss your options with an experienced California employment law attorney. Id. The employer knew or had reason to know of the expenditures; and, 4. Thus, employers must adequately reimburse employees. 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. Aside from DLSE opinion letters, the DLSE also published a manual, entitled the Department of Labor Standards Enforcements Manual. Our California employment law attorneys can discuss your options with you and help you learn your rights. This field is for validation purposes and should be left unchanged. But several cases do shed light on appropriate expense reimbursement practices. 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. Section 2802 does not specify how employers must reimburse employees. Reimbursement for mobile employees can be tricky and ambiguous for companies across the country. But very few employment attorneys have presented appellate courts with issues related to Labor Code, section 2802 and California Expense Reimbursement. . California Labor Code §2802. The DLSE has issued approximately 6 opinion letters regarding California’s expense reimbursement laws. Labor Code Section 2802 Requires Employers To Indemnify Employees. California Law Addresses Employee Business Expense Reimbursement. 9/11 Cancer: How is 9/11 and Cancer Connected? ", © 2020 Crosner Legal. The California Labor Code requires employers to indemnify employees for all expenses incurred in connection with their employment. 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. Wij willen hier een beschrijving geven, maar de site die u nu bekijkt staat dit niet toe. 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. But it does offer significant information with respect to how the DLSE approaches California’s expense reimbursement laws, even including several factual scenarios. 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. Gattuso at p. 571. Michael Astanehe has recovered millions on behalf of Californians. 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 no bills pending in the California Senate or House of Representatives to change Labor Code, section 2802 or Labor Code, section 2804. 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. Employers may reimburse employees in several ways. 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. 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 . 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. 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 The purpose of this statute is "to prevent employers from passing their operating expenses on … Alternatively, the employer may reimburse paying enhanced compensation. Lab. 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. . It’s simple: employers must reimburse employees for all expenses reasonably and necessarily related to work. The part that is not so simple, however, is how the employer calculates the employee’s reimbursement amount and how the reimbursement is paid. 2802. Thus, employer policies that waive an employee’s right to expenses after a certain deadline are not enforceable. California Overtime Law: Everything You Need To Know, Terms Of Use & Attorney Advertising Disclaimer. The attorney responsible for all communications herein is Zachary Crosner, Esq. California Labor Code § 2802. There are multiple ways to prosecute a claim under Labor Code section 2802. Privacy Policy | Terms Of Use & Attorney Advertising Disclaimer. California law mandates that employers reimburse employees for work-related expenses. Labor Code section 2802 requires an employer to “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 . California’s Labor Code, section 2802 has been on the books for decades. The Department of Labor Standards Enforcements (DLSE) is chartered with enforcing California’s employment laws. The law is more straightforward regarding other tools and equipment. 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 . The general reimbursement statute of the California Labor Code is Section 2802. This section reads, in relevant part: “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.” As is a frequent practice, the legislature left this question for future examination by the judiciary. The law therefore implies a "reasonable" time element into that obligation. 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. We went to court. 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. What does this mean to employers and employees? While DLSE opinion letters are not binding on courts, they suggest how the DLSE will address the issue during administrative proceedings. However, Labor Code section 2802 does not state how employers must provide reimbursement. This site is protected by reCAPTCHA and the Google While discharging their job duties; 3. Are employees able to reimburse California employees through increased base pay, or must reimbursement be a separate reimbursement? Under California Labor Code section 2802, employers must reimburse California employees for reasonable and mandatory business expenses incurred while carrying out job duties. Employers are not permitted to force employees to accept “direct deposit” of their wages. There also appears to be no legal basis supporting employers’ policies denying reimbursement when expense reports are submitted untimely or incorrectly. However, this is likely to only be awarded in a State Court case, not with the Labor Board. Employees' Business Use Of Personal Property, The Department Of Labor Standards Enforcements' Position On California Employment Expense Reimbursement Laws, filing a complaint with the California Labor Board, Legal Guide to California Meal Break Laws in 2019, DFEH Complaints: Everything To Know in 2019, Wrongful Termination Laws in California: Everything You Need To Know. will have no duty to keep confidential the information I am now transmitting to CROSNER LEGAL, P.C. This rule, embodied in California Labor Code Section 2802, prohibits employers from shifting their costs of doing business onto the backs of employees. The penalties over the period of non-payment, plus the attorney’s fees can be substantially greater than the expenses. California Employment law requires employers to reimburse employees for all “necessary” expenses they incur while performing their jobs. The employer did not exercise due diligence towards reimbursement. Fortunately, the Division of Labor Standards Enforcement has said that the IRS’ mileage reimbursement rate is a “presumptively reasonable” reimbursement rate. and CROSNER LEGAL, P.C. Necessary expenditures include any attorney fees or costs incurred by employees to recoup expenses … If the employer requires the employee to have a home office, the employer must cover certain expenses reasonably and necessarily related to that office. The Court held that enhanced compensation could take the form of increased base salary, increased commission rates, or both. This issue often arises when employees use their personal vehicles to perform their duties. A California employee forced to use personal property for mandatory business-related activities is entitled to reimbursement. App. Given the various costs associated with owning a vehicle, it would be quite complicated to calculate the actual cost that must be reimbursed. Refreshed: 2018-05-15 Information on this website may not constitute the most up-to-date legal information. 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). The California Chamber of Commerce and other large business interests have repeatedly sought to change the law to relieve businesses of their obligations. Privacy Policy and He lost. . I am agreeing to Terms of Use, Privacy Policy, and Attorney Advertising Policy. 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.” Its purpose is to prevent employers from passing their operating expenses to their employees. California Labor Code Section 2802. An Employer’s Duty to Reimburse. California Labor Code section 2802 requires employers to reimburse employees for their expenses. This manual also sets forth the DLSE’s position regarding California’s expense reimbursement laws, including Labor Code, section 2802. California Labor Code § 2802: Employers’ Duty to Reimburse. Although not expressly required, California employees receiving enhanced compensation for reimbursements should receive wage statements that separately identify the reimbursement amounts. This article examines California employee reimbursement methods that satisfy 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 … Additionally, employees can file a class action on behalf of all similarly situated employees who were also not reimbursed properly, as well as representative action under the Private Attorney General Act “PAGA” in California. 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. In response, the DLSE may issue “opinion letters” detailing the DLSE’s position regarding the law and the facts put forth to them. There is a narrow exception to this requirement. What is reasonable for one employer and employee might be different for others. Id. 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. 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. The Industrial Welfare Commission’s wage orders require employers to furnish all tools and equipment necessary to do the job. by clicking "Submit. © 2020 Astanehe Law || This website includes general information about legal issues and developments in the law. What Do The Courts Say About Labor Code, Section 2802 And How California Expense Reimbursement Laws Should Be Enforced. Under California Labor Code section 2802, employers must reimburse California employees for reasonable and mandatory business expenses incurred while carrying out job duties. 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, …” 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. In the state of California, these lawsuits are fast becoming the rule, not the exception, because California Labor Code section 2802 is particularly strict. If you haven’t enacted a fair, accurate, and defensible vehicle reimbursement program, you may already be at risk. California Labor Code Section 2802 outlines employer responsibilities concerning business expense reimbursement. In Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal. 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. (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. When a California employee receives commission-based enhanced compensation, the employer chooses to link expense reimbursement with employee performance. 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