Are California Employers Required to Reimburse Employees for Business Expenses?

Under California law, employers must reimburse employees for business expenses they incur in the course of carrying out their work duties.California workers have rightsregarding the kinds of expenses for which they should be compensated, when they can expect compensation and more.

What Does the Law Say About Employee Expenses?

Regulations covering how and when a company must reimburse employees for business expenses are covered under the California Labor Code Section 2082. Specifically, Paragraph 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.”

This applies to anyone who works for someone else on a W2 basis. If you filled out a W2 when you were hired and your employer withholds taxes from your paycheck, California Labor Code Section 2082 applies to you. This means that you may be entitled to reimbursement for work-related costs.

What Types of Expenses Are Covered?

Business expenses that an employee may incur on behalf of an employer include the following:

• Personal cell phone or computer use on behalf of the company
• Travel expenses (including lodging, meals and transportation)
• Required uniforms or attire worn specifically on the job
• Safety equipment, tools and other supplies necessary for the job
• Training

How Might an Employer Reimburse an Employee For Work-Related Expenses?

California employees who incur work-related expenses are entitled to reimbursement from their employer. In most cases, employees must keep a record of the expenses that they incur. Once they present the record, usually in the form of a bank statement or a receipt, to their employer, the employer can then reimburse employee for the correct amount. This reimbursement may be made in the form of a direct deposit, cash, or a check.

Another example is when an employee is required to use his or her personal cell phone to make or receive calls on behalf of the company. Even employees who have an unlimited data plan are entitled to compensation for a percentage of their monthly subscription fees based on the time they use their phone for work-related purposes.

How Must Employers Reimburse Employees for Business Expenses?

California has a number of labor laws that protect employees and dictate how employees may be reimbursed for business expenses.

To reimburse employees, a company may provide the employee with an allowance, or lump sum to cover the expenses in question. Alternatively, the employer may require workers to submit an itemized statement of all work-related expenses, including receipts and other documentation. However, there is no specified time frame for reimbursement in California.

It should be noted that California law expressly forbids waivers of a worker’s right to reimbursement.

Are There Penalties for Failure to Reimburse Employees for Business Expenses?

If you are a W2 employee in California and have not been reimbursed for job-related expenses, as in the case of these Pizza Hut drivers in their 2017 lawsuit, you may be eligible to file a lawsuit against your employer for their refusal to reimburse. In addition to recovery of expenses, you are entitled to interest on the amount in question, dating from the time the expenses were incurred. California companies who are in violation of the law may also be cited by the state Commissioner of Labor.

Filing a California Labor Lawsuit

A growing number of California employees are coming forward with allegations of labor violations against their current and former employers. If you have been subjected to labor violations such as failure to reimburse business expenses, failure to pay minimum wage or overtime and more, you may be able to file a lawsuit and pursue the compensation you’re owed.

Filing a lawsuit can be a daunting prospect, so Top Class Actions has laid the groundwork for you by connecting you with an experienced attorney. Consulting an attorney can help you determine if you have a claim, navigate the complexities of litigation and maximize your potential compensation.

Join a Free California Worker Class Action Lawsuit Investigation

If you work for a California employer and were not reimbursed for work expenses, you may qualify to join this California workers reimbursement lawsuit investigation.

Learn More

This article is not legal advice. It is presented 
for informational purposes only.