California has specific labor laws related to the reimbursement of employee business expenses. The expense reimbursement law can be found in California Labor Code Section 2802.
- California Labor Code Section 2802:
- Section 2802 of the California State Labor Law requires employers to reimburse employees for “necessary” expenses they accrue as part of his or her duties.
- The law states that an employer will compensate employees “for all necessary operating expenses or losses incurred by the employee.”
- Necessary Expenses:
- Expense reimbursements refer to such expenses that are reasonable costs and that are directly related to the employee’s job duties. This can include, but is not limited to, business-related travel, an employee’s telephone service, business mileage, attending conferences, meals, personal cell phones, internet access, and other required job-related equipment.
- Business-Related Mileage Reimbursement:
- California employers are generally required to reimburse California employees for business-related mileage at a rate set by the state, or California court. This rate is adjusted annually by the California Division of Labor Statistics and Research.
- Receipts and Documentation:
- Sometimes, an employer requires that employees submit appropriate receipts or documentation for common work-related expenses, or to fill out an expense reimbursement form. However, the lack of receipts does not absolve the employer of their obligation to reimburse workers if the expenses were necessary for work duties.
- Employer Policies:
- Employers may establish written policies for the submission and reimbursement of employee expenses.
- Civil Penalties:
- Failure to comply with the reimbursement requirements under Section 2802 can result in penalties against employers. Employees may pursue legal action to recover a reasonable amount of any unpaid expenses.
- Enforcement and Legal Action:
- Employees who believe they have not been properly reimbursed for necessary expenses can file a claim with the California Division of Labor Standards Enforcement (DLSE) or contact Mr. Justice and his team of California employment attorneys at Lawyers for Justice, PC (LFJ). LFJ offers FREE consultations to those who call the firm at (844) 568-1702.
It’s important for both employers and employees to be aware of the reimbursement requirements and ensure compliance with California labor laws. Employers should establish clear policies, communicate them to employees, and promptly reimburse necessary and reasonable expenses incurred during the course of employment. And likewise, employees should be aware of their rights and take appropriate steps to seek reimbursement when required.
California Mileage Reimbursement Law
In California, employers are generally required to reimburse employees for business-related mileage expenses if travel is part of an employee’s job duties.
- Mileage Reimbursement Rate:
- California law does not mandate a specific mileage reimbursement rate. The California Division of Labor Statistics and Research typically sets a standard mileage reimbursement rate. Employers are generally expected to reimburse at a rate that is reasonable and covers the actual expenses incurred by the employee.
- IRS Standard Mileage Rate:
- Employers often use the standard mileage rate set by the Internal Revenue Service (IRS) as a guideline for mileage reimbursement. The IRS standard mileage rate is a standard amount per mile that the IRS sets annually for various business-related uses of a personal vehicle.
- Actual Expenses vs. Standard Mileage Rate:
- Employers can choose to reimburse based on the actual expenses incurred by the employee (like gas, maintenance, and insurance) or by using the standard mileage rate. The chosen method should reasonably reflect the employee’s actual expenses.
- Record Keeping:
- Part of an employee’s duties for claiming a reimbursement could be to submit documentation or receipts to their employer in support of their reimbursement claims. It’s important for employees to keep accurate records of their work-related expenses.
- Failure to Reimburse:
- A direct consequence of employers not complying with the reimbursement requirements under Section 2802 can lead to legal issues. Employees can pursue legal action to recover unreimbursed expenses and to prevent employers from taking advantage of them again.
California Work From Home Expenses & Reimbursement
In California, employers may have certain responsibilities when it comes to reimbursing remote workers for expenses related to working from home. For those who work remotely, the same law under California Labor Code Section 2802, applies, which requires employers reimburse employee’s for expenses they accrue.
Here are key points regarding work-from-home reimbursement in California:
- Home Office Expenses:
- Expenses related to creating and maintaining a home office, such as internet costs, utilities, and office supplies, may be considered reimbursable. However, the specifics can depend on the nature of the work, what are deemed as necessary expenditures, and the agreement between the employer and employee.
- Use of Personal Devices:
- If employees use personal devices (such as computers, laptops, or smartphones) for work purposes, employers may be required to reimburse a reasonable percentage of the associated costs, such as internet usage or increased utility bills.
- Communication Expenses:
- Costs related to work-related communication, such as telephone or internet service, may be considered reimbursable. This is particularly relevant for employees who use their personal phones or internet for work purposes.
Gas Reimbursement in California
- Business-Related Travel:
- If an employee is required to use their personal vehicle for business-related travel, such as commuting to a work site, meeting clients, or running work-related errands, the employer may be required to reimburse the employee for the expenses incurred, including gas expenses.
- Standard Mileage Rate:
- Employers often use the California labor code standard mileage rate, which is set by the Internal Revenue Service (IRS), as a guideline for gas reimbursement. The standard mileage rate is a standard amount per mile that the IRS sets annually for various business-related uses of a personal vehicle.
- Actual Business Expenses vs. Standard Mileage Rate:
- Employers can choose to reimburse based on the actual expenses accrued by the employee (like gas receipts) for business purposes, or by using the standard mileage rate.
All job duties performed by workers that contain reimbursement obligations need to legally be paid by employers. Whether it’s pertaining to exempt employees, salaried, those who work remotely, or hourly workers, any necessary expenditures or losses must be recouped. Call Mr. Justice today for a FREE consultation and to get more information at (844) 568-1702.