Have you ever experienced feeling like your contribution to work is more than what's expected? In California, employees may be entitled to reimbursement for work-related expenses - a perk that other states do not provide.
California Expense Reimbursement Laws, for example, require employers to foot the bill for work-related expenses their employees incur. But how well do these laws really protect employees?
As we navigate through labor codes and legal jargon, we'll pull back the curtain on what rights Californian workers have when it comes to expense reimbursement. From understanding "necessary expenditures or losses" to exploring vehicle expense policies and uncovering why business-expense reimbursement can't be waived - we've got lots of ground to cover.
Table Of Contents:
- Understanding California Labor Code §2802 and Employer Reimbursement Obligations
- Exploring Vehicle Expense Reimbursement Policies
- The Unwaivable Right to Business Expense Reimbursement
- Legal Recourse for Unreimbursed Business Expenses
- FAQs in Relation to California Expense Reimbursement Laws
- Getting Help
Understanding California Labor Code §2802 and Employer Reimbursement Obligations
If you're a California employee, you've likely had to shoulder some job-related expenses. But did you know that under California Labor Code §2802, your employer is required to reimburse these costs?
The Scope of "Necessary Expenditures or Losses"
This law stipulates that an employer must cover any "necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties." That's quite a mouthful. Let me break it down for you.
"Necessary expenditures," simply put, are out-of-pocket costs tied directly to your employment duties. Think along the lines of travel expenses, mileage when using personal vehicles for work errands, even internet bills if remote work is part and parcel of your job description.
Let's use this example: imagine driving 50 miles per week for business-related purposes in your own car - that's a necessary expenditure right there.
In cases like this one where actual costs might be hard to calculate, employers can resort to IRS-set mileage reimbursement rates as a reasonable percentage substitute.
Exceptions to the Rule
All rules have their exceptions though; even labor code ones. Notably exempt from expense reimbursements are certain construction industry employees earning at least twice minimum wage rate who provide hand tools typically used in their trade worth less than $450.
Public entity employers also don't have to foot the bill for their employees' expenses. For instance, a city might not need to reimburse an employee's parking costs while on official business.
Exploring Vehicle Expense Reimbursement Policies
California employers often face the question: how can we meet our reimbursement obligations when employees use personal vehicles for work-related purposes? Well, it's not as complicated as you might think. Various techniques exist to tackle this issue.
IRS Rate vs Actual Expenses
The most common method of reimbursing employee vehicle expenses is by using the IRS mileage rate. The IRS provides a standard mileage rate each year which many companies adopt for simplicity and consistency.
In 2023, that rate was set at 56 cents per mile driven for business use. Employers who choose this method simply pay out based on miles driven - easy peasy.
But what if your employee has an eco-friendly electric car or drives a gas-guzzling SUV? This is where actual expense reimbursement comes into play. Some employers prefer to reimburse their employees based on the actual costs they incur while driving their personal vehicle for work.
This means looking at things like fuel costs, insurance, depreciation and maintenance - yep all those receipts saved. It's more time-consuming but could be fairer in certain situations.
Fixed Amount Reimbursement Methods
If calculating every single penny seems too daunting (or just plain boring), there's another option – fixed amount reimbursements such as per diem or car allowances. Note: This isn't about choosing between red or white sauce pasta; these policies have serious implications under California labor law so make sure you know what you're getting into before making any decisions.
The first approach here involves paying a fixed amount per day (a.k.a. a per diem) for vehicle use. This is pretty straightforward – you set an amount, say $50, and no matter how much the employee drives that day, they get fifty bucks.
It's like flat rate shipping - regardless of distance or time taken.
Just like a daily allowance, a car allowance operates in the same manner. But, it's usually given out every month instead of each day.
Understanding how to reimburse employees for vehicle expenses in California isn't rocket science. You can use the IRS mileage rate, actual expense reimbursement, or fixed amount methods like per diem and car allowances. But remember, your chosen method must comply with state labor laws.
The Unwaivable Right to Business Expense Reimbursement
Many employees might be surprised to learn that they cannot waive their right to business expense reimbursement. According to California law, employers are obligated by the California Labor Code §2802, which is also supported by a ruling of the California Supreme Court.
This rule applies regardless of any company policy or agreement between an employer and employee.
A Clear Cut Law with No Exceptions for Employees
No matter what kind of work you do in California - from remote work out of your personal home office, using hand tools on construction sites, or driving miles for client meetings - it's important you know this: Your employer has a legal obligation under labor code 2802 to reimburse you for these expenses.
These expenses include those directly related to your job duties and may cover items such as travel costs incurred when attending mandatory training sessions offsite; fees associated with professional licenses required perform job functions; even usage costs tied up in using your personal cellphone if necessary as part of performing employment duties.
What About Agreements That Contradict This Rule?
You might ask whether there's any loophole allowing employers or workers themselves circumvent this statute via agreements. The answer is no. Any such contract would violate public policy according every single California court who've examined issue so far.
In fact, case known Gattuso v Harte-Hanks Shoppers, Inc., California Supreme Court clarified: Employers cannot use part of an employee's salary to satisfy their reimbursement obligation. The base salary is for the work performed and does not cover expenses incurred in performing those duties.
Employer Tricks That Don't Work
But these strategies don't legally stand up. Why? Because they're just crafty ways of pushing the cost onto employees, which isn't fair or lawful.
Did you know? In California, it's your unwaivable right to be reimbursed for business expenses by your employer. This holds true no matter the job - remote work from home, construction site hand tool use, or client meeting travel costs. Plus, any agreement that tries to sidestep this law won't stand up in court.
Legal Recourse for Unreimbursed Business Expenses
If your employer isn't covering the cost of business expenses, don't fret. There are legal options you can use to get what's rightfully yours. This is a deep dive into those possibilities.
Recovering Business Expenses and Interest
In California, Labor Code §2802 gives employees the right to recover any costs they've incurred while performing job duties. These might include mileage for travel or buying hand tools necessary for work.
The law goes further by stating that if an employee has had to front these costs, they're also entitled to interest from the date each expense was incurred until reimbursement takes place. The point here? Don't hesitate - make sure you claim everything owed.
Potential for Attorney's Fees and Penalties
The sting in this tale comes when employers refuse or neglect their duty under Labor Code §2802. In such cases, not only will they have to pay up all unpaid business expenses plus interest but there's more at stake too. They may be liable for attorney's fees and penalties.
You see, even though going through a lawsuit can feel like climbing Mount Everest without oxygen tanks - expensive and exhausting – it doesn't have to be. In many cases where an employer required staff members to. bear work-related expenses without proper compensation, courts ruled in favor of employees being awarded lawyer's fees on top of their rightful reimbursements.
Yes, you read that right. If your employer is found to have violated Labor Code §2802, they may end up paying for the whole shindig - your expenses and the cost of legal counsel. Read more about average settlements for unpaid wages here.
Don't Take It Lying Down
Keep tabs on your expenditures so you can be sure to get what's due to you without needing corroborating documents. Because without proof, it's tough to fight for what you're rightfully owed. We have additional information you can read by visiting our guide on what to do when not paid.
Keep your chin up when faced with unpaid business expenses. California's Labor Code §2802 gives you the power to recover job-related costs, and even adds interest. But that's not all - if your employer doesn't pay what they owe, they might end up covering attorney's fees and penalties as well. So remember: maintaining thorough records is a crucial part of this battle.
FAQs in Relation to California Expense Reimbursement Laws
How long does an employer have to reimburse employee expenses in California?
In California, employers should typically reimburse employee expenses within the same pay period they were incurred.
What are the rules for reimbursement?
The golden rule is: if an expense is necessary for work, it's usually reimbursable. But exact rules vary by state and job type.
Can a company not reimburse expenses?
No, companies can't refuse to cover necessary business costs. If they do, employees may seek legal help to get their money back.
Do I have to reimburse employees for expenses?
If you're running a business in California or other states with similar laws, yes. Employers must cover reasonable work-related costs that workers shoulder themselves.
Getting Help
Mastering California Expense Reimbursement Laws is not an uphill battle. Remember that 'necessary expenditures or losses' are reimbursable by employers under California Labor Code §2802. This extends to vehicle-related expenses where mileage reimbursement methods and actual costs come into play.
Bear in mind, your right to business-expense reimbursement is unwaivable according to Californian law. So stand firm!
Finally, if faced with non-compliance from employers, legal recourse is available for unreimbursed business expenses. You have the right to recover those costs and even interest on amounts spent.
For those who would like assistance from experienced unpaid wage attorneys, give Kingsley Samet Employment Lawyers a call. Our attorneys have helped thousands of employees obtain compensation and justice for the wrongs committed by their employers. Call today for your free consultation.