Mindel Scott

California Business Expense Reimbursement Policy

The following policy statements* will be included in your export: California Labor Code 2802 is the law that requires employers to reimburse employees “for any necessary expenses or losses incurred by the employee as a direct result of performing their duties.” Employers who do not do so may face wage and hourly lawsuits. The law allows employees to recover attorneys` fees in addition to reimbursement. “This is the first time I know a court has turned to the defense that `the government was the cause of the costs, not us,`” Craig J. Ackermann, a shareholder of the company representing the plaintiff, Ackermann & Tilajef, PC., told XpertHR. California Labor Law requires employers to compensate their employees if employees have paid something out of their own pocket that is sufficiently work-related. This law was passed by the California legislature to discourage companies from spreading the costs associated with their business to their employees. If violations are found, a court may hold your company liable for reasonable reimbursement, interest from the date the employees suffered the necessary expenses or losses, attorneys` and legal fees on both sides, and quotes from the State of California. Is it a work-related expense? An employer can probably collectively refuse a claim for payment for an employee`s dog food. However, some common or seemingly extravagant requests may require more thoughtful analysis. If the employee wants the employer to reimburse the cost of a 50-inch television because they can no longer watch sports in the break room, the employer may be able to refuse the request. However, if the same employee regularly used a large TV to run the simulations required for the company and the employer expected those simulations to continue while the employee was working remotely, the demand might not be so far-fetched.

What would happen if the employee had submitted a claim for reimbursement for casual business wear tops with a $49.95 shipping fee? The employer`s likely and immediate response will be “it`s crazy,” but the manager recalls that the employee was running the lawn care business “on site” and was asked to hold video conferences with current and potential customers the day after the shelter order was placed on site. The manager also remembers a conversation in which the manager told the employee that he would never have to wear anything other than t-shirts, jeans and baseball caps to work on the field, while the employer also follows a strict “business casual” policy that applies to anyone who interacts with customers. Suddenly, the demand and the $49.95 in overnight shipping costs may no longer seem crazy. While an employer is not required to reimburse non-conforming basic clothing, the employer`s specific actions and expectations could result in a “necessary” reimbursement from the company. The process of filing, reviewing and processing refunds is cumbersome. It can also be a minefield of responsibility. In general, an employer must compensate an employee if it knows or had reason to know that the employee caused a necessary business expense. For example, employers may be required to compensate employees even if they do not claim reimbursement. This problem is prompting some employers to implement a flat-rate reimbursement policy where the amounts paid are at least partially fixed, such as AMN`s daily rate policy. And they often issue these payments automatically without receiving documentation of employee expenses. This issue is especially important during the COVID-19 pandemic, as California employers often use fixed reimbursement amounts for the computer and other expenses for remote workers.

9. What happens if the employer is not aware of the costs? Pursuant to California Labor Code Section 2802, an employee is entitled to be reimbursed by his or her employer “for any necessary expenses or losses incurred by the employee as a direct result of performing his or her duties or obeying the employer`s instructions.” Therefore, California employees have an explicit right to reimbursement of business-related expenses such as equipment, materials, training, business travel, and uniforms.