Kim Gale  |  May 18, 2021

What Is the California Expense Reimbursement Law?

California law requires employers to reimburse workers for “all necessary expenditures or losses incurred by the employee” in the course of the job, as well as for expenses incurred at the employer’s directive. California Labor Code Section 2802 is designed to protect workers from shouldering the costs of expenses incurred during the course of their job.

 Qualifying Expenses

Expense reimbursement is likely to come under additional scrutiny in the coming years due to a recent decision from a California appellate court. California Labor Code Section 2802 outlines employer responsibilities concerning business expense reimbursement. As stated above, an employer must reimburse an employee for “all necessary expenses,” which California law defines as for the actual costs incurred in order to perform their job.

Expense Reimbursement Timing

Employers might be under the impression that they have some discretion over the approval process for expenses. For example, an employer might try to limit reimbursement to only those expenses preapproved by management.

Employer reimbursement policies may require workers to submit expense reports within a certain time frame, but the California Expense Reimbursement Law states that workers must be paid for legitimate business expenses no matter when the employee submitted them and whether or not management has already approved the expenses, according to the Society for Human Resource Management (SHRM).

Denying Reimbursement Requests

SHRM explains that employers risk being sued if a company refuses to reimburse expenses that were not preapproved.

“A less-risky practice would be to provide payment to the employee in order to comply with the employer’s obligation to reimburse for such expenses and then also counsel or discipline the employee for failing to follow company policy,” an employment law expert told SHRM.

Cochran Decision

Cochran v. Schwan’s Home Services is the case that resulted in the courts expounding on the California Expense Reimbursement Law, which called into question which business expenses employers are obligated to cover. While the issue in the Cochran case concerned reimbursement for the use of an employee’s personal cell phone for work purposes, the appellate court found that the question applied on a much broader scale. Employers, according to the court’s decision, would also have to reimburse employees for any personal devices workers need to fulfill the duties of the job, such as laptops, tablets, or tools.

To avoid litigation, the California Law Employment Report recommends that employers “be mindful about reimbursing employees for cell phone use, printing and office supplies (if an employee is required to maintain a home office or use a personal printer for work), and other work-related expenses.”

Required Tools and Equipment

When tools or equipment are needed to perform a job, it’s the employer’s responsibility to provide and maintain these items for all workers, per the Department of Industrial Relations. There are two exceptions to this rule, for all workers except construction workers.

The California Expense Reimbursement Law does not require employers to provide tools to registered apprentices. And employees whose wages are at least twice the minimum wage “may be required to provide and maintain hand tools and equipment customarily required by their trade or craft,” though it’s “limited to hand (as opposed to power) tools and personal equipment, such as tool belts or tool boxes, that are needed by employees to secure these hand tools,” the Labor Center’s report states. Employers are responsible for providing tools and equipment necessary for occupational safety, per Cal-OSHA, a Golden State program charged with protecting the health and safety of workers.

An employer who does not make an effort to understand the complexities of the California Expense Reimbursement Law and to develop policies in line with the labor code could find themselves the subject of a lawsuit.

9 thoughts onWhat Is the California Expense Reimbursement Law?

  1. Robert John Kaupp says:

    I was employed by TA truck stops in California and had to supply all my power pneumatic air tools and my own tool box plus all specialty tools that I needed my box alone was 5500.00 I was also sent to training for work twice a year or whenever a training session came up and training was out of state in Arizona I lived 60 mi one way from my shop and they would only pay me milage from shop to training but not pay me milage from my house I also used my personal vehicle to make the trip I was never reimbursed for wear to my vehicle oil changes tires engine wear etc and milage was around 600 miles when i was terminated from my employer I still had a balance left owed on tool box and had to give up possession of box .I was let go in March of 2019 ad just received a lastcheck for used vacation time about a month ago.

  2. Elisha Carr says:

    For 2 1/2 yrs delivered newspapers to vendors for our local newspaper publisher, I used my own vehicle, and was classified as an independent contractor, but got let go from the job for being 10 min late one day. Is this legal?

    1. Elisha Carr says:

      For 2 1/2 yrs delivered newspapers to vendors for our local newspaper publisher, I used my own vehicle, and was classified as an independent contractor, but got let go from the job for being 10 min late one day. Is this legal? I live in Iowa.

  3. Mark Hankins says:

    I’ve been paying my own dry cleaning bills for years now. I’m required to be in a full pressed suit but my employer doesn’t reimburse for this expense. Is this legal? I’m in California

  4. Carly Fulton says:

    My husband often has to drive away from work and run to a grocery store when his work runs out of items. He hasn’t made a list of when he left but he says it’s well over 20 trips. Anything we can do?

  5. Philip A Byars says:

    I was not reimbursed for travel to and from my doctor appointment s after I was injured at work. Also, where is my 300$ boots and gloves reimbursement. I worked for the us forest service for 8years. Thank you for the help.

  6. Nancy says:

    What If I work delivering packages but my boss barely hired us last Year.
    I’ve been working for him for three years already. Warehouse is located in pico Rivera California and my deliveries are passing Malibu I drive over 150 miles a trip, Recently my boss started giving me $60 for gas expenses but does not cover maintenance on my car. I got my car six months ago and my tires are already wearing off. He does not pay by hour He pays only $5 a package and at times just to deliver one package will take me over an hour.

  7. Kris Cunningham says:

    I had to buy a pre-owned desk, mouse & keyboard.
    Altogether cost me about $200

  8. MICHAEL says:

    IH MICHAEL T PEARSON MY NAME .MY ODJESTIVE FOR POSTION THESE LINE . AT THAM C p A FOR H7 R BLOCK.I WOOD LIKE TO BE PART OF THE TEAM.

Leave a Reply

Your email address will not be published. By submitting your comment and contact information, you agree to receive marketing emails from Top Class Actions regarding this and/or similar lawsuits or settlements, and/or to be contacted by an attorney or law firm to discuss the details of your potential case at no charge to you if you qualify. Required fields are marked *

Please note: Top Class Actions is not a settlement administrator or law firm. Top Class Actions is a legal news source that reports on class action lawsuits, class action settlements, drug injury lawsuits and product liability lawsuits. Top Class Actions does not process claims and we cannot advise you on the status of any class action settlement claim. You must contact the settlement administrator or your attorney for any updates regarding your claim status, claim form or questions about when payments are expected to be mailed out.