As stated above, an employer must reimburse an employee for 100 percent of any “necessary expenses,” which California law defines as for the actual costs incurred in … Edward C. Barnidge and Richard A. Olderman | Further, employers cannot contract around their Section 2802 reimbursement obligations. An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful. The code states that the penalty for not reimbursing an employee includes: Costs incurred in obtaining reimbursement; Liability for expenses, plus interest; Attorney fees California Labor Code Section 2802. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team. However, this general rule has a multitude of nuances once one examines all the different costs that arise in the employment context and the various Labor Code and … 30 days after incurring the cost) in the written reimbursement policy. Lab. The three key phrases found in Section 2802 are: Indemnity; Attorney’s fees ; Penalties; Indemnity refers to the obligation to restore and make whole for a loss incurred, either as a result of a statutory duty or a contract of indemnity. How much reimbursement is enough? Effective communication with employees is critical: © 2020 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. That said, if the employer prevents or discourages its employees from requesting reimbursements, the fact that it did not receive a reimbursement will not absolve it of its Section 2802 obligations. Read this complete California Code, Labor Code - LAB § 2802 on Westlaw FindLaw Codes are provided courtesy of Thomson Reuters Westlaw, the industry-leading online legal research system . Various California labor and tax laws outline the types of reimbursable expenses. As a practical matter, however, it may be difficult to retrieve company property from an individual’s home absent legal intervention or prior agreement to incentivize the employee to return the property. document.addEventListener('DOMContentLoaded', function() { If the employer anticipates that the expense will be incurred regularly, it could increase the employee’s salary or provide some other form of regular compensation. This law is intended to prevent employers from passing their operating expenses on to their employees (Labor Code section 2802). Cal. However, courts would likely draw the line at reimbursement of fixed expenses, which the employee already had to pay before they had to work at home, such as the cable bill, as there was no “loss” to the employee as a condition of continued employment simply because the employee is working remotely. That includes expenses you might incur while working from home. [1] But what if an employee’s work-related activities do not actually generate any expense in addition to that which the employee would have normally incurred otherwise? He represents clients in court and before state and federal agencies, including the EEOC, DOJ, and similar California agencies. Be careful, though, about delving too deeply into the “reasonableness” of a particular necessary item. It does not specify what amounts are specifically necessary. 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? Reid and Riege, P.C., a mid-sized Connecticut law firm with a well-established corporate health and human services practice, seeks an attorn... Corradino & Papa, LLC, a personal injury law firm,actively seeking to hire 0-2 years' experience Associate. In Gattuso, the California Court of Appeal concluded that California employers could satisfy their California Labor Code section 2802 reimbursement obligations through separate reimbursements, or paying California employees enhanced compensation. Because working remotely was not required, many employers could decline “work from home” reimbursements because the employee’s expenses were voluntary (i.e. LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. 4. California Labor Code Section 2802 obligates employers to reimburse their employees for all expenses incurred during the discharge of their duty. Charles Kagay | 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. Generally, an employee may seek reimbursement of a necessary business expense within three years of incurring the expense. Risk-averse employers may choose to reimburse the entire home internet bill. Our Team Account subscription service is for legal teams of four or more attorneys. Suddenly, the request and the $49.95 in overnight shipping charge may not appear as crazy. 1 Section 2802.1(c) limits the scope of the section to “general acute care hospital[s]” as defined in Section 1250 (a) of the California Health and Safety Code. var pday = moment(myDate).format("MMMM DD, YYYY"); Site Map / Is there a cutoff date to submit reimbursements? Dynamically explore and compare data on law firms, companies, individual lawyers, and industry trends. California’s Labor Code Section 2802 normally requires employers to reimburse employees for “reasonable” and “necessary” expenses incurred while performing their job duties. California Labor Code section 2802 requires employers to reimburse employees for “all necessary business expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.” Before the pandemic, business expenses were usually limited to costs such as business travel or personal car mileage because workforces were operating within offices. Note, too, that the definition of “employee” in California is incredibly broad. 9. June 18, 2020. This makes sense because, in most cases, the expense is incurred once or very infrequently. }); In today’s world, the first place people go to find the services they need is the internet. This rule, embodied in California Labor Code Section 2802, prohibits employers from shifting their costs of doing business onto the backs of employees. California law generally holds that an employer may not pass the ordinary costs of doing business on to employees. Sponsored by: Everlaw The same rationale applies to a personal cell phone or internet – if an employee must now use their personal cell phone or home internet for work (having no employer-paid alternative), a conservative approach would be to recognize the employer’s responsibility to reimburse for a reasonable percentage of the bill. 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 … 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. P.C. var pday = moment(myDate).format("MMMM DD, YYYY"); California Labor Code Section 2802 outlines employer responsibilities concerning business expense reimbursement. Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Both options are priced the same. Similarly, if the employer had a practice of issuing live paychecks before the shelter-in-place period, the employee could recover the fees for setting up a bank account with direct deposit through  Section 2802 if that became a condition of continued employment. The failure to reimburse pursuant to Section 2802 exposes employers to individual or class litigation, Private Attorney Generals Act (“PAGA”) claims (and related penalties), statutory interest of 10%, and payment of the employees’ attorneys’ fees (which are never awarded to a prevailing employer), in addition to the amount that should have been reimbursed. By the same token, if an employee submits delivery service receipts for their lunches, absent an employer policy promising meals under any circumstances, those lunches were voluntary and, thus, not reimbursable. students rose by 1.5% in 2020, though new student enrollment saw a small dip, according to the American Bar Association. Tailored just for you. While most employees could work from a laptop, there are certain employees who may require more. The penalty amounts and procedures applicable to “expenses” are set forth in Labor Code … (“(c) For purposes of this section, the term “necessary expenditures or losses” shall include all reasonable costs, including, but not limited to, attorney’s fees incurred by the employee enforcing the rights granted by this section.”) Labor Code 2802 LC, see endnote 1 … California has seen the cycle of this disconnect for decades. We hold that when employees must use their personal cell phones for work-related calls, Labor Code section 2802 1 requires the employer to reimburse them. Law Offices of Gary Martin Hays & Associates Whether the employees have cell phone plans with unlimited minutes or limited minutes, the reimbursement owed is a reasonable percentage of their cell phone bills. Labor Code section 2802 requires an employer to “indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of … The new Illinois law mirrors key language in California Labor Code Section 2802, California's expense reimbursement law. Audit your car allowance or reimbursement policy to identify exposure points. California Labor Code section 2802 requires employers to indemnify their workers for expenses they necessarily incur in their duties. Generally, most employers provide reimbursement on a request-by-request basis. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information. CA 2802. As stated above, an employer must reimburse an employee for 100 percent of any “necessary expenses,” which California law defines as for the … Micha Mitch Danzig is a Mintz attorney who litigates employment, commercial, and trade secret disputes. Moreover, keep in mind that if the employer chooses to provide additional compensation to account for reimbursements, there will be tax implications, which could result in the employer failing to cover all of the cost of the intended reimbursement or the employee being penalized with higher payroll taxes to account for the “raise” in compensation to address the reimbursements. Section 2802 of the California Labor Code requires employers to reimburse their employees for any “necessary expenditures or losses” that they incur as a direct result of doing their job. the employee chose to work remotely). What is Really Required for Expense Reimbursement. Experience with real estate transactions, real property taxati... NAULTY SCARICAMAZZA & MCDEVITT Mourn the Loss of Dear Colleague and Founding Partner Angelo L. Scaricamazza, Jr. Belluck & Fox welcomes Daniel Belzil to the firm. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas. Copyright © 2020 ALM Media Properties, LLC. With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. Virtual. “The Court concludes that a fair interpretation of [Labor Code] §§ 2802 and 2804 which produces “practical and workable results,” consistent with the public policy underlying those sections, focuses not on whether an employee makes a request for reimbursement but rather on whether the employer either knows or has reason to know that the employee has incurred a reimbursable expense. The California Labor Code – and, consequently, Section 2802 – only applies to employees. The new Illinois law mirrors key language in California Labor Code Section 2802, California's expense reimbursement law. document.addEventListener('DOMContentLoaded', function() { California Labor Code section 2802 states: ... focuses not on whether an employee makes a request for reimbursement but rather on whether the employer either knows or has reason to know that the employee has incurred a reimbursable expense. Code § 2802 (a). Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR! 11. In fact, employees throughout California may be owed significant compensation for basic work-from-home expenses. The total number of J.D. Identify someone to field employee questions. That includes expenses you might incur while working from home. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. California Labor Code Section 2802 requires employers to reimburse California employees for “all necessary business expenditures or losses incurred by the employee … Under this approach, whether the employer is aware of the reimbursement only plays a role insofar as the reasonableness of the reimbursement. Why are these documents on your desk and what do you have to do as an employer? For example, if an employee […] 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. employee. The purpose of this statute is "to prevent employers from passing their operating expenses on to their employees." VI. The City of Camden is seeking an attorney to focus on transactional matters. California has the strictest business reimbursement labor code in the country. An easy scenario to start: An employer switches meetings to a videoconference platform and requires employees to upgrade to a premium account (which charges a fee). June 12, 2020. California’s Labor Code Section 2802 normally requires employers to reimburse employees for “reasonable” and “necessary” expenses incurred while performing their job duties. This could result in the submission of multiple documents: An employee could submit a shipping invoice and a copy of their credit card statement to show payment for new equipment. Send reminders about expense reimbursement processes (or establish/communicate a process if one does not exist); Ensure any reimbursement policies require advance approval over a specific amount; Review job descriptions to anticipate likely reimbursements; Check with employees regarding devices they may need (or already have) to fulfill their job duties; and. Convenience, by itself, is insufficient to trigger a reimbursement obligation. All Rights Reserved. The Recorder. A conservative approach is to treat the duty to reimburse as separate from any notice requirement. She could, however, submit reimbursements for work-specific programs she was required to install on the device in order to fulfill her job duties. What are your obligations as an employer? Customer Service / What if the employer did not know about the expense? | Mintz attorney Nicole M. Rivers defends employers in employment litigation and labor matters and advises on employment best practices. Reimbursement would only be required if the classes were an employer-imposed requirement of continued employment. $("#sub2").append( pday ); var myDate = new Date(parseInt(1604611970000)); Labor Code section 2804 says that an employee’s rights under Labor Code section 2802 may not be waived. Legalweek(year) will bring together thousands of legal professionals for a series of 5 innovative virtual legal events. By Anthony Zaller on August 23, 2019. Congratulations to the Newest 2020 Lawyers of Distinction. California Labor Code section 2802(a) states: "An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful." var myDate = new Date(parseInt(1605031834000)); The summary judgment procedure has nooks and crannies as to which the appellate courts are highly deferential, and these can be fatal if not scaled carefully in the trial court. Tool in California Labor Code 2802 LC, see endnote 1 above delving too into... Each employee is reimbursed well-respected faculty in the course of employment from faculty... Role insofar as the reasonableness of the California Labor Code Section 2802 has been around for a long time since! 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