Employee Expense Reimbursement Law

mileage reimbursement californiaThe California Labor Code requires employers to reimburse employees for necessary costs that they pay as part of their job duties. The failure to reimburse expenses may subject California employers to penalties that are paid to the employee. The Cooper Law Firm helps Californian workers recover their unreimbursed expenses as well as interest and penalties.

The provision of the Labor Code that requires employers to reimburse employees does not apply to independent contractors. However, the employee expense reimbursement law does apply when an employer has misclassified an employee as an independent contractor.

Our Misclassification as an Independent Contractor page explains the difference between employees and independent contractors. If your employer has classified you as an independent contractor and, for that reason, has refused to reimburse job-related costs, you may be entitled to a remedy. The Cooper Law Firm can evaluate your case and, if you were misclassified as an independent contractor, can help you recover your unreimbursed expenses as well as other financial losses you experienced as a result of the misclassification.

Expense Reimbursement Law

Section 2802 of the California Labor Code requires an employer to “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.” The purpose of section 2802 is to prevent employers from passing on their operating costs to those that work for them.

Whether an expenditure is “necessary” will depend on the facts of the case, the nature of the employment, and whether the employer should have anticipated that an employee would need to make the expenditure. However, when an employee has been instructed to purchase something or to incur a specific expense, they will nearly always be paid for it.

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Car Mileage and Travel Expenses

Receiving payment for on-the-job car and travel costs is a common application of section 2802. Employees who are asked to drive their own vehicle as part of their job (i.e., make deliveries, pick up supplies, or make sales calls) are entitled to reimbursement of their gasoline and maintenance expenses attributable to those trips. The IRS mileage reimbursement rate is a common measure of those costs.

Cell Phone and Internet Expenses

When an employee has to use his or her cellphone or home internet connection for work, the employer has to reimburse them for those costs. These costs may include all or part of the cost of a cellphone and a data or minute plan, as well as the cost of supplying a home with internet access so that the employee can send and receive work-related documents. These expenses can apply to employees who work at home or those who do work that requires them to use their cell phone anywhere on the job. Again, whether such expenditures are “necessary” will depend on the circumstances of the employment relationship.

Proof of the Expenditure

Employees should try to keep records of their job-related mileage and expenditures. If an employer refuses a request to reimburse those expenses, accurate records (such as receipts or a mileage log) will help the employee prevail in a claim against their employer.

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Remedies for Failure to Reimburse

An employee who prevails in a claim for reimbursement of expenditures or losses is entitled to recover not only the costs that should have been covered by the employer, but also interest on the delayed payment. Interest accrues from the date on which the employee incurred the necessary expenditure or loss.

Employees are entitled to recover their reasonable costs of enforcing the rights granted by section 2802, including attorneys’ fees and costs. You will not be responsible for paying any out-of-pocket fees or costs to our firm. All fees and costs will come from any recovery, meaning if we aren’t successful in recovering your costs, you will not have to pay any fees or costs.

Reimbursement Assistance

The Cooper Law Firm represents California employees (including those misclassified as independent contractors) who were denied reimbursement of necessary expenditures or losses in violation of the Labor Code. Workers who believe their right to receive payment for their costs should contact The Cooper Law Firm for an evaluation of their right to pursue appropriate remedies.

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