The Legislature’s intent is that employees should not bear losses or expenses incurred in the service of their employers. Under section 2802 of the California Labor Code, “[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.” Cal. So CLC 2802 is not a sure thing, just a big hill for the employer to climb. CA 2802 To prevail on a failure to reimburse claim, California employees must show: 1. California Labor Code section 2802 requires employers to reimburse employees, “for all necessary expenditures or losses incurred by the employee” while completing work duties. California has seen the cycle of this disconnect for decades. California Employment law requires employers to reimburse employees for all “necessary” expenses they incur while performing their jobs. It’s simple: employers must reimburse employees for all expenses reasonably and necessarily related to work. In Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal. Employers that follow California Labor Code section 2802 must promptly reimburse California employees for mandatory business expenses. 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. 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. 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." 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. App. 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. What is reasonable for one employer and employee might be different for others. California law mandates that employers reimburse employees for work-related expenses. 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. Under California Labor Code Section 2802 and court decisions in Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal.4th 554 (2007) and Cochran v. Thus, employer policies that waive an employee’s right to expenses after a certain deadline are not enforceable. The Obligation to Reimburse Business Expenses. 4th 554, 559 (2007). Employee desire reimbursement for his or her actual expenses. There are always two side to any dispute and CA-DLSE always listens to both sides. 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. Fortunately, the Division of Labor Standards Enforcement has said that the IRS’ mileage reimbursement rate is a “presumptively reasonable” reimbursement rate. 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. Alternatively, the employer may reimburse paying enhanced compensation. For example, when an employer requires the employee to maintain a certain level of insurance coverage, the DLSE has said the IRS mileage reimbursement rate would not be sufficient. 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. 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. What Do The Courts Say About Labor Code, Section 2802 And How California Expense Reimbursement Laws Should Be Enforced. 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. 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, …” There are multiple ways to prosecute a claim under Labor Code section 2802. 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. While discharging their job duties; 3. Lab. 4th 1137 (2014). As is a frequent practice, the legislature left this question for future examination by the judiciary. Section 2802 does not specify how employers must reimburse employees. 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.” The part that is not so simple, however, is how the employer calculates the employee’s reimbursement amount and how the reimbursement is paid. Where an employer offering enhanced compensation for reimbursement fails to satisfy the above-mentioned requirements, the California employee has a legal claim. 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. All Rights Reserved. He lost. will have no duty to keep confidential the information I am now transmitting to CROSNER LEGAL, P.C. 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. 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. 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.” Labor Code Section 2802 – California Employment Law Report. To clarify this indemnification obligation under section 2802, the California Division of Labor Standards Enforcement has proposed new travel and expense regulations. California Labor Code §2802. The Department of Labor Standards Enforcements (DLSE) is chartered with enforcing California’s employment laws. Thus, employers must adequately reimburse employees. No legal advice is intended. This article examines California employee reimbursement methods that satisfy California Labor Code section 2802. The law is more straightforward regarding other tools and equipment. The DLSE has issued approximately 6 opinion letters regarding California’s expense reimbursement laws. The courts have said that “necessary” means “reasonable” under the circumstances. The California Supreme Court confirmed that employers must reimburse employees for all necessary and reasonable expenses. California Overtime Law: Everything You Need To Know, Terms Of Use & Attorney Advertising Disclaimer. This article provides employers with analysis and tips related to expense reimbursement of remote workers in California. The law seeks to prevent employers from unfairly passing operational expenses onto employees. However, this is likely to only be awarded in a State Court case, not with the Labor Board. The general reimbursement statute of the California Labor Code is Section 2802. 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