What constitutes “necessary and reasonable” will depend on multiple factors, including the employee’s job responsibilities (on paper and in practice), the employee’s performance expectations while working remotely, and the actual costs incurred by the employee. California Employment law requires employers to reimburse employees for all “necessary” expenses they incur while performing their jobs. The new Illinois law mirrors key language in California Labor Code Section 2802, California's expense reimbursement law. She handles cases involving claims of wage and hour violations, harassment, retaliation, discrimination, breach of employment agreements, FMLA violations, and violations of California's Private Attorneys General Act (PAGA), Family Rights Act (CFRA), and Fair Employment and Housing Act (FEHA). 9. Gattuso v. Charles Kagay | However, COVID-19 and the resulting shelter-in-place orders have redefined the working landscape, requiring many employees to work remotely to keep businesses afloat. What can I do to control the anticipated reimbursements? Code § 2802(a). Congratulations to the Newest 2020 Lawyers of Distinction. The commissioner may issue a citation with financial penalties against an employer for violating California’s travel reimbursement obligations. [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? If the employee’s roommate demands payment from the employer for the increased electric bill, the employer would not be obligated to honor that demand: The roommate is not the employee. In Gattuso , the California Supreme Court considered what an employer may do to satisfy its statutory reimbursement obligation under Labor Code section 2802 which requires an employer to indemnify its employees for expenses they necessarily incur in the discharge of their duties. Is there a cutoff date to submit reimbursements? Kenneth Artz 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. December 18, 2020. It may require comparing prior months’ bills to the current month to establish an amount “attributable” to the remote work. Identify someone to field employee questions. Honoring outstanding legal achievements focused at the national level, largely around Big Law and in-house departments. }); Webcast Date : Wednesday, December 16, 2020 | Experts discuss how firms can transition to the cloud. (“(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 … 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). While the law is unclear and risk remains, it may be acceptable to reimburse home-bound employees only for a reasonable percentage of their home internet expenses, not the entire bill. Employers should not dismiss a reimbursement request merely because it arrives in an unusual form. Lab. Dynamically explore and compare data on law firms, companies, individual lawyers, and industry trends. students rose by 1.5% in 2020, though new student enrollment saw a small dip, according to the American Bar Association. 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. If an employee’s duties require the use of the employee’s car, the employee should receive reimbursement for automobile expenses such as … For more detailed codes research information, including annotations and citations, please visit Westlaw . Effective communication with employees is critical: © 2020 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. 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. 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. REIMBURSEMENT OF EXPENSES Employers must reimburse employees for losses and reasonable expenses incurred in the performance of the employee’s job duties. var myDate = new Date(parseInt(1605031834000)); Reimbursement of Employee Expenses. 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. Legal Compass delivers you the full scope of information, from the rankings of the Am Law 200 and NLJ 500 to intricate details and comparisons of firms’ financials, staffing, clients, news and events. California Labor Laws on Employee Expenses California Labor Code Section 2802 states an employer shall indemnify his/her employee for all necessary expenditures or losses incurred by the employee in the direct consequence of the discharge of his/her duties. However, some usual or seemingly extravagant requests may require more thoughtful analysis. RELIEF PROGRAMS FOR EMPLOYEES AFFECTED BY COVID-19 OR SHELTER IN PLACE To determine whether (and what) the employer is obligated to pay, there are several factors to consider: The California Labor Code – and, consequently, Section 2802 – only applies to employees. Customer Service / An Employer’s Duty to Reimburse Under California Labor Code Section 2802 and court decisions in Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal.4th 554 (2007) and Cochran v. Schwan’s Home Service, Inc., 228 Cal.App.4th 1137 (2014), employers are required to reimburse employees for all “necessary” and “reasonable” expenses. Note, too, that the definition of “employee” in California is incredibly broad. Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. How do you get found, and what happens after you’ve been found? Sponsored by: Everlaw California Labor Code section 2802 requires employers to indemnify their workers for expenses they necessarily incur in their duties. The cost of the premium account would be reimbursable under Section 2802 as employers cannot pass their operating costs to their employees. ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content. Legalweek(year) will bring together thousands of legal professionals for a series of 5 innovative virtual legal events. In this area, it is better to be conservative and over-estimate than underestimate and risk a privacy violation or a Section 2802 claim for failing to fully reimburse for actual expenses. At minimum, the accompanying documents should substantiate the purchase date, the item that was purchased, the purchase amount, and that the employee (or someone on the employee’s behalf) purchased the item. $("#sub0").append( pday ); 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. 7. Terms of Service/ In this first installment in a two-part series, the authors, two lawyers at Williams & Connolly, consider California's new cybersecurity statute; new rulings on key issues; and available defenses at the motion to dismiss stage in class actions stemming from the COVID-19 pandemic. In general, employers must reimburse the cost of uniforms, travel expenses, tools and equipment required for the job. Because working remotely was not required, many employers could decline “work from home” reimbursements because the employee’s expenses were voluntary (i.e. For more detailed codes research information, including annotations and citations, please visit Westlaw . The best practice is to provide reimbursement within the next pay period following submission. 6. Our Team Account subscription service is for legal teams of four or more attorneys. June 12, 2020. But, what about expenses that an employee would incur irrespective of whether they work remotely? If, however, the employee demands payment for the increased electric bill they share with their roommate, the employer may have an obligation to pay. Thus, the first step of any Section 2802 analysis is to ask who is submitting the request. FAQ / Generally, most employers provide reimbursement on a request-by-request basis. The law is intended to prevent employers from passing on their operating expenses to their employees. What is Really Required for Expense Reimbursement. A statutory duty generally has a three-year statute of limitations, [See CCP Sec. Is the reimbursement request necessary and reasonable? employee. | If that same employee, however, purchased the latest, greatest desktop computer before being required to work remotely, she likely cannot submit a reimbursement for the desktop’s cost even though she must use it for work. How much reimbursement is enough? 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. 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. Mileage reimbursement in California is governed by both the Labor Code, Section 2802, and the California Code of Regulations, Title 8, Section 13700-13702. Law Offices of Gary Martin Hays & Associates However, if a reimbursement is submitted after that date (but before the expiration of the three years), the best practice is to nonetheless accept the submission. For something like the 50” television, the employer should condition advance approval on the employee’s agreement to return the item upon the sooner of the employer’s demand or termination of employment. The penalty amounts and procedures applicable to “expenses” are set forth in Labor Code … Labor Code 2802 LC, see endnote 1 above. Both options are priced the same. 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 … 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. Perhaps the employee has roommates, one of whom receives the electric bill and then requests a pro-rata share via a mobile transfer application. Subscribe to Labor Code Section 2802. This law is intended to prevent employers from passing their operating expenses on to their employees (Labor Code section 2802). | California Labor Code § 2802: Employers’ Duty to Reimburse California Labor Code section 2802 requires employers to reimburse employees, “for all necessary expenditures or losses incurred by the employee” while completing work duties. Labor Code section 2804 says that an employee’s rights under Labor Code section 2802 may not be waived. If you have employees receiving a car allowance or even a mileage reimbursement you could be exposed. California places a high value on privacy and that hurdle is not lowered merely because there is a Section 2802 question. New Law Targets Sexual Harassment in California Agriculture McLe Self-Study: When Remote-Work Expenses Must Be Reimbursed Under Labor Code Section 2802 Cases Pending Before the California … The Recorder. If, however, that same employee regularly used a large television to run simulations necessary for the business and the employer expected those simulations to continue while the employee worked remotely, the request might not be so farfetched. $("#sub1").append( pday ); Notwithstanding that shelter-in-place restrictions have been in place in California since mid-March, it is not too late to take control of reimbursements. However, an employer should only be responsible for a reasonable percentage of that bill. Finally, the employer should be cautious about treading too deeply into the employee’s personal financial matters to understand the scope of a reimbursement. document.addEventListener('DOMContentLoaded', function() { 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 . A Refresher on California Reimbursement Requirements in a COVID-19 World, Part Five of the COVID-19 Roadmap Series: Ensuring a Safe Workplace - COVID-19 Screening and Testing, Part Two of the COVID-19 Roadmap Series: Creating a COVID-19 Operations Infrastructure. A weekly, curated selection of our international content from around the globe, across the business of law, in-house, regulatory, technology and more, with expert insights from our senior editors. Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! What are the consequences for failing to pay? What does the reimbursement look like? This rule, embodied in California Labor Code Section 2802, prohibits employers from shifting their costs of doing business onto the backs of employees. Get the timely legal news and critical analysis you cannot afford to miss. 335 through 349.5] while the recovery of a penalty generally has a one-year statute of limitations. If an employee voluntarily enrolls in work-related classes to fill their leisure time, there is no requirement to reimburse the employee. To view this content, please continue to Lexis Advance®. Employers should be open-minded when it comes to documentation of a requested reimbursement. Tags: Best Practices For California Employers, cell phones, Class Actions, Cochran v. Schwan's Home Services, Employee Handbooks, Expense Reimbursement, Friday's Five, Labor Code Section 2802, necessary expense, New Cases, Private Attorney General Act, reasonable reimbursement, Technology & Law, Wage & Hour Law 3. That includes expenses you might incur while working from home. document.addEventListener('DOMContentLoaded', function() { Section 2802 (a) 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. Why are these documents on your desk and what do you have to do as an employer? Courts differ on whether notice to the employer is required to establish liability for a Section 2802 claim. Section 2802 of the California Labor Code requires employers to reimburse their employees for the reasonable and "necessary" expenses they incur in direct consequence of discharging their job duties. CA 2802. 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. California Labor Code Section 2802 states an employer shall indemnify his/her employee for all necessary expenditures or losses incurred by the employee in the direct consequence of the discharge of his/her duties. Micha also performs management training for employers. The general reimbursement statute of the California Labor Code is Section 2802. The code states that the penalty for not reimbursing an employee includes: Costs incurred in obtaining reimbursement; Liability for expenses, plus interest; Attorney fees (b) All awards made by a court or by the Division of Labor Standards Enforcement for reimbursement of necessary expenditures under this section shall carry inte… Employees have a powerful tool in California Labor Code Section 2802 to recover unpaid expenses incurred in the course of employment. (Labor Code sections 400–410.) California has long held certain expenses, like cell phone bills and car mileage, as necessary and reasonable under certain circumstances. 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. 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