Subscribe to Labor Code Section 2802. Types of Expenses The Cochran case expressly extended the expense reimbursement requirement to cover personal cell phone usage where the employer does not otherwise provide the equipment and/or a cellular plan. The employer must communicate to its workers the method or formula used to reimburses for car expenses. In making the determination about whether an employee’s actions are in the “course and scope” of their job, courts examine whether the expense being sought by the employee is “not so unusual or startling that it would seem unfair to include loss or expense among other costs of the employer’s business.” Employers need to be mindful about reimbursing employees for cell phone use, printing and office supplies (if employee is required to maintain a home office or use personal printer for work), and other work related expenses. code: article: section: code: section: ... labor code - lab general provisions. Don’t forget about other expenses incurred in the “course and scope” of working. I Will Help Protect Them. California Labor Code section 2802 has been around for a long time (since 1937, to be exact). In doing so, the employer can utilize an actual reimbursement, mileage reimbursement, or lump-sum method. In Gattuso v. Harte-Hanks Shoppers, Inc., an outside salesperson wanted to recover for driving his personal car to meet clients, and the California Supreme Court held that employers could adopt different types of expense reimbursement plans under California law such as lump sum payments, the IRS Standard Mileage Rate, or higher wages to compensate for auto expenses. . Gattuso, at 480. By clicking submit you are agreeing to the. June 27, 2017. The California Court of Appeal agreed there were violations and held (which means, it’s now the law): “We hold that when employees must use their personal cell phones for work-related calls, Labor Code section 2802 requires the employer to reimburse them. The Court recognized that employers may simplify calculating the amount owed to an employee by paying an amount based on a “total mileage driven.” Gattuso, at 479. This rule, embodied in California Labor Code Section 2802, prohibits employers from shifting their costs of doing business onto the backs of employees. Corbett H. Williams Employment Law. The California Labor Code – and, consequently, Section 2802 – only … An employer’s obligation under Labor Code section 2802 requires it to compensate an employee for all expenses actually and necessarily incurred. . Under the mileage reimbursement method, the employee only needs to keep a record of the number of miles driven for job duties. The state of California has the strictest labor laws in the country when it comes to auto allowances and vehicle reimbursements. The Court also warned that employee cannot waive the right to be fully reimbursed for their actual expenses: We agree that, as with other terms and conditions of employment, a mileage rate for automobile expense reimbursement may be a subject of negotiation and agreement between employer and employee. ABM Industries, a janitorial service provider, recently agreed to a $5.4 million dollar proposed settlement in Marley Castro, et al. You Have Rights As A Worker. 335 through 349.5] while the recovery of a penalty generally has a one-year statute of limitations. Under section 2804, however, any agreement made by the employee is null and void insofar as it waives the employee’s rights to full expense reimbursement under [Labor Code] section 2802. The upshot is that employers can have different expense reimbursement plans, but the plan must reimburse the entire cost of using a personal car on-the-job, including depreciation. Citing Section 2802, plaintiffs' attorneys have aggressively pursued claims against California employers for failure to reimburse various employee expenses, including home internet and cell phone costs. In general, employers must reimburse the cost of uniforms, travel expenses, tools and equipment required for the job. The new Illinois law mirrors key language in California Labor Code Section 2802, California's expense reimbursement law. . This Friday’s Five post discusses five issues employers need to know about automobile and mileage reimbursement under California law. But it does offer significant information with respect to how the DLSE approaches California’s expense reimbursement laws, even including several factual scenarios. Section 2804 says that employees cannot “waive” (i.e., forfeit) their right to receive reimbursement for miles driven for work. division 1. department of industrial relations [50 - 176] division 2. employment regulation and supervision [200 - 2699.5] division 3. employment relations [2700 - 3100] Under California labor law, employers must reimburse employees the entire expense of using personal automobiles. If an employee’s duties require the use of the employee’s car, the employee should receive reimbursement for automobile expenses such as mileage, gas, and wear and tear. This manual also sets forth the DLSE’s position regarding California’s expense reimbursement laws, including Labor Code, section 2802. By Terry O'Connor Labor Code § 2802 requires California employers to reimburse employees for all necessary expenditures incurred in the performance of their duties. California Arbitration In Employment Disputes: Don’t Believe The Hype! Under California Labor Law, must employers reimburse employees for expenses incurred at work such as auto or mileage expenses? California Labor Code § 2802. The code ensures that “ An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of … The law is intended to prevent employers from passing on their operating expenses to their employees. It is important to note that while this amount can be negotiated, the employee still is unable to waive their right to reimbursement of their actual costs as mentioned above. California Labor Code § 2802: Employers Duty to Reimburse 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 Labor Code section 2802 requires employers to reimburse their employees for mileage they incur in the course of their employment. In addition to mileage, employers may also have to reimburse employees for other costs they incurred in driving their personal cars for business. This type of lump sum payment is often labeled as a per diem, car allowance, or gas stipend. Whatever the method, the Court stated that the expense plan must reimburse for all costs incurred — even the tax effect of using higher wages to compensate for car expense. 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 Cochran decision posed, and answered, the “threshold question” presented on appeal as follows: 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. Whether your company pays a monthly allowance or the IRS mileage rate, you cannot assume that your program complies with CA Labor Code 2802(a). The IRS publishes standard mileage rates each year (and sometimes adjusts these rates during the year). The California Supreme Court also held that the reimbursement rate can be negotiated by parties as long as it fully reimburses the employee, and the amount does not have to be set at the IRS mileage rate. 2802. Mileage reimbursement in California is governed by California Labor Code Section 2802. 5. Who is submitting the receipt? For more detailed codes research information, including annotations and citations, please visit Westlaw . Gattuso v. Labor Code Section 2802. Overtime Pay Laws in California & Exemption Laws. Mileage reimbursement based on IRS mileage rate is presumed to reimburse employee for all actual … In fact, employees throughout California may be owed significant compensation for basic work-from-home expenses. If an employee’s duties require the use of the employee’s car, the employee should receive reimbursement for automobile expenses such as mileage, gas, and wear and tear. The latest litigation trends, court decisions, & issues on California Employment Law. That includes expenses you might incur while working from home. © 2020 by The Kaufman Law Firm. Section 2802 operates to prevent an employer from passing its operating expenses to employees. The obligation to reimburse business expenses incurred by employees originates in California Labor Code section 2802, which requires an employer to "indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of … Did you know that California Labor Code Section 2802 requires employers to reimburse employees for any necessary expenses the employees incur while doing their jobs? Necessary expenditures include any attorney fees or costs incurred by employees to recoup … All right reserved. Employers must tell employees how its formula or method for reimburses for automobile expense; merely stating that wages cover auto expenses is not enough. The Court recognized that the mileage rate agreed to between the employer and employee is “merely an approximation of actual expenses” and is less accurate than the actual expense method. If you have been the victim of wrongful termination, wrongful demotion or any kind of discriminatory business practices, it is time to take action and contact a Ventura employment law attorney that can help. California Labor Code section 2802 has been held to cover the following types of necessary expenses: Personal Vehicle Usage: Employers must reimburse employees who use their personal vehicles in completing job duties, typically at the IRS’ standard mileage rate. It does not specify what amounts are specifically necessary. California Labor Code section 2802 requires employers to indemnify their workers for expenses they necessarily incur in their duties. California Labor law requires that employees be reimbursed for their work related expenses, such as mileage, supplies, training, tools and equipment and even legal expenses. California Labor Code Section 2802 obligates employers to reimburse their employees for all expenses incurred during the … Necessary expenditures or losses include all reasonable costs. Yes. In Gattuso v. Harte-Hanks Shoppers, Inc., the California Supreme Court clarified the parameters of mileage reimbursement under California law, as well as the three different methods available for employers to reimburse employees for their mileage reimbursement. California courts have adjudicated several reimbursement claims. 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