Expense Reimbursement for California Sales Reps

One area in employee rights issues that is often overlooked is expense reimbursement for California sales reps.

The California Labor Code makes clear that employers must indemnify employees for all out of pocket expenses spent in order for them to do their job. This includes expense reimbursement for California sales reps.

Specifically, the statute defines “necessary expenditures or losses” to include “all reasonable costs….” The intent of this law is to prevent employers from passing their operating expenses on to their employees.

The kinds of expense reimbursement for California sales reps included in this employer obligation extend to expenditures incurred by employees “during the normal course of their personal life, which may include necessary contributions at work.

Employers may directly reimburse for such expenses or provide expense reimbursement for California sales reps in a lump-sum amount sufficient to provide full reimbursement for actual expenses necessarily incurred.

However, if an employee shows that the reimbursement amount is less than the actual expenses incurred, the employer must pay the difference.

Lastly, employers may not take any deductions from the reimbursement amount, e.g., expense reimbursement for California sales reps is not taxable.

The California Labor Code also prohibits waiver of an employee’s right to reimbursement.

Expense Reimbursement for California Sales Reps

Some of these mandated expense reimbursement for California sales reps include cell phone usage, mileage, and other required employee expenditures.

Cell Phone Usage

Many California sales reps use personal items for a business purpose. If you are required to to use a cell phone for business purposes, your employer must reimburse you for a portion of the expense incurred for the cell phone usage, whether or not your cellular plan has unlimited minutes.

A recent court opinion held that the amount owed by the employer would be “a reasonable percentage of their cell phone bills.” (Cochran v. Schwan’s Home Service, Inc.).

In that case, the court ruled that reimbursement was always required; otherwise, it would be passing its operating expenses onto the employee.”

The court further ruled that it was irrelevant whether the cell phone bill was paid by a third party.

Mileage & Vehicle Expenses

In 2007, the California Supreme Court noted in Gattuso v. Harte-Hanks that when an employee is required to use his or her personal vehicle for work-related activities, the employer must reimburse the employee for expenses related to the use of the vehicle.

Although a common practice to reimburse employees is the mileage reimbursement method, the California Supreme Court ruled that an employer can also use an actual expense method or lump-sum payment to reimburse employees for expenses incurred in the course of their employment duties.

Other Expenditures

Other expenses reimbursable to California outside sales reps include:

• business-related transportation, living, and other travel expenses
• purchasing, laundering or repairing uniforms or special clothing required by the employer
• purchasing supplies, tools, materials, or equipment
• for “supper money” to cover the cost of supper when an employee is requested to work during the evening hours
• excess home-to-work travel expenses incurred by the employee due to extraordinary circumstances

If you have worked as an outside sales representative in California with the last four years and have not received expense reimbursement for cellphone use and other expenses generated to do your job, you could be entitled to compensation under California labor laws.

Join a Free California Outside Sales Expense Reimbursement Class Action Lawsuit Investigation

If you worked as an outside sales representative in California in the last four years and your employer did not reimburse your expenses, your employer may be violating your rights and you may be entitled to compensation.

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