Under California Labor Code Section 2802, your employer must reimburse you for "all necessary expenditures or losses" you incurred as an employee "in the direct consequence of the discharge" of your duties. This includes expenses such as cell phone usage, travel, or driving that are related to your job. Under this labor law, employers face certain penalties when in violation of its terms.
If you believe you are owed reimbursement for unpaid wages or expenses connected with your job duties, you can turn to Kingsley Szamet Employment Lawyers. Our firm exclusively practices employment law which means we have extensive knowledge and experience in this field. Our legal team has recovered millions of dollars in settlements and verdicts for clients who have filed claims and lawsuits against employers engaged in unlawful practices since 1997.
Book a free case evaluation at Kingsley Szamet Employment Lawyers by phoning (818) 990-8300 or by submitting your contact details on our online request form.
Key Points - Table Contents
- Reimbursement of Owed Expenses
- Reimbursement of Driving Expenses
- Reimbursement of Business Expenses
- Reimbursement of Home Office Expenses
- Legal Framework and Employee Rights
- Common Violations
- Get Help From Los Angeles Reimbursement Attorneys
- Frequently Asked Questions
Reimbursement of Owed Expenses
When an employer fails to reimburse an employee for job expenditures or losses, they face a penalty that includes paying the employee the unpaid expenses plus interest. This interest shall be "at the same rate as judgments in civil actions." Furthermore, the interest will start accruing from the day the expenditure or loss was incurred by the employee. The expenditures will include "all reasonable costs, including, but not limited to attorney's fees incurred by the employee" when having to enforce his or her rights under this law. Up to four years of unpaid expenses can be recovered by employees.
Reimbursement of Driving Expenses
Your employer is obligated to reimburse you for any expenses related to driving as part of your job, including not just fuel but repairs, maintenance, and more.
These expenses can be reimbursed in the following ways:
- According to your mileage. You are reimbursed for the number of miles you drive as part of your work duties. This mileage method is based on a rate set by your employer. The standard rate in such cases is generally the one used by the IRS which can change over time.
- As a lump sum. This method is a set amount paid to you by your employer based on your job duties. It is commonly calculated based on the usual number of miles driven while engaged in your work. This set amount may be added to your base salary but must be delineated as such. The reimbursed amount must realistically cover your actual expenses and must be in line with what you would be reimbursed under the mileage method listed above.
- According to what you actually spent. This method is based on actual receipts for what you spent for such items as gas, repairs, maintenance, registration, auto insurance, and depreciation.
Only commuting is exempt from employer-owed reimbursement as discussed above. As an example, if you are a salesperson, your commute from home to your sales office or to your first sales meeting is not reimbursable. Neither is your commute from your last sales call back to your home. However, all sales calls and meetings in between would be reimbursable as they involve driving as part of your sales duties.
Reimbursement of Business Expenses
California's employee expense reimbursement law requires employers to compensate workers for all necessary business expenses incurred while performing their job duties, as outlined in Labor Code Section 2802. This expense reimbursement law protects employees from shouldering costs that should rightfully be the employer's responsibility, though employers may establish reasonable documentation requirements through their expenses reimbursement policy.
Under California's comprehensive expense reimbursement law, employees are entitled to reimbursement for legitimate work-related costs when these expenses are necessary for job performance, including:
- Office supplies: Essential materials like pens, paper, folders, staplers, and organizational tools that employees must purchase when the employer doesn't provide adequate supplies for required job tasks
- Food during business trips: Reasonable meal expenses incurred while traveling for mandatory work purposes, including client meetings, conferences, training sessions, or other employer-required business travel
- Cost of home office for remote work: Reasonable expenses for technology and services specifically required by the employer for remote work performance, focusing on equipment and connectivity rather than general furniture or workspace improvements
Reimbursement of Home Office Expenses
Home office expense reimbursement under California's employee expense reimbursement law covers costs that employees incur when employers require them to work from home, though reimbursement typically applies to technology and communication expenses rather than furniture or general office setup costs.
The expense reimbursement law protects remote workers who incur specific costs to maintain functional home workspaces, covering expenses such as:
- Internet : A reasonable portion of monthly broadband service costs when high-speed internet connectivity is essential for completing assigned work tasks and employer-required communications
- Personal cell phone bill: A reasonable, prorated portion of monthly service costs based on documented business usage, as established in the Cochran decision, calculated according to actual work-related usage
- Headset : Professional communication equipment specifically required by the employer for video conferences, client calls, team meetings, or customer service interactions
- Computer: Essential computing equipment and peripherals when employers don't provide adequate technology for job performance and specifically require employees to use personal devices for work
Legal Framework and Employee Rights
California's employee expense reimbursement law establishes the "necessary expenditure" standard under Labor Code Section 2802, meaning expenses must be directly related to job duties and required for effective work performance. While this law takes precedence over restrictive company policies, employers may implement reasonable expenses reimbursement policy requirements for documentation and approval processes.
Key aspects of the expense reimbursement law include:
- Reasonable time reimbursement requirement: Employers must reimburse documented, necessary expenses within a reasonable time after proper submission, though no specific statutory timeline is mandated
- Appropriate documentation standards: While employees should maintain receipts and expense records, employers cannot impose excessive or unreasonable paperwork requirements to deny legitimate claims
- Employer-mandated expenses: Costs are reimbursable when they're necessary for job performance and explicitly required by the employer, such as mandatory licensing renewals for specific roles, rather than voluntary professional development choices
- Statutory protection scope: The law covers various work-related expenses including mileage for business travel, required tools and equipment, and employer-mandated certifications or licensing fees
Common Violations
Despite clear expense reimbursement law requirements, some employers attempt to avoid their obligations through overly restrictive expenses reimbursement policies or improper denial of legitimate claims. Warning signs include:
- Categorical denial of legitimate expenses that are clearly necessary for job performance and explicitly required by the employer
- Unreasonable reimbursement delays that extend well beyond what would be considered a reasonable time for processing documented expense claims
- Requiring personal payment without reimbursement for clearly business-related expenses like employer-mandated software, required tools, or necessary business travel costs
- Shifting operational business costs to employees such as requiring payment for uniforms, safety equipment, or customer service issues that are the employer's responsibility
If your employer has violated California's employee expense reimbursement law by denying reimbursement for legitimate, necessary business expenses or has implemented an unlawful expenses reimbursement policy, consulting with an experienced employment attorney can help determine your rights and evaluate potential recovery options under the law. In some cases, employers who violate reimbursement laws may also engage in other illegal practices such as retaliation or wrongful termination. If you were fired after demanding expense reimbursement or reporting violations, a wrongful termination attorney in Los Angeles can help you pursue additional claims and compensation.
Get Help From Our Los Angeles Reimbursement Attorneys
Do you believe you have not been adequately reimbursed for the expenses you have had to pay for as part of your job? These expenses can seriously reduce your income especially in times of inflation. At Kingsley Szamet Employment Lawyers, we are here to ensure that your employee rights under the law are protected and that you receive the reimbursement you are owed. Utilizing an experienced employment lawyer can help you determine your best options. With 40 years of experience devoted exclusively to employment law, we are well-equipped to provide the savvy and strong representation you need in resolving this matter.
Talk to a Los Angeles reimbursement lawyer about your case today.
Contact us at (818) 990-8300
Frequently Asked Questions
Can an employer reimburse an employee for expenses?
Yes, California Labor Code Section 2802 actually requires employers to reimburse employees for all necessary business expenses incurred in the discharge of their duties. This is a mandatory obligation, not an optional benefit.
What is the employee expense reimbursement policy?
Under California law, any employee expense reimbursement policy must comply with Labor Code Section 2802's requirement that employers reimburse all necessary business expenses, and companies cannot create policies that waive or limit this statutory obligation. Employers may establish reasonable documentation and submission procedures through their policies.
What are the rules for reimbursement?
California law requires employers to reimburse employees for all "necessary expenditures" incurred while performing job duties, with expenses qualifying when they are directly related to work and required for effective job performance. Employers must provide prompt reimbursement and cannot shift business operating costs to employees.
How long does a company have to reimburse you for expenses?
California law requires employers to reimburse business expenses within a "reasonable time" after proper submission, though no specific statutory timeline is established. What constitutes reasonable time depends on the circumstances, but unreasonable delays can result in penalties and legal violations.
