Expand all. Lab. This was true before the pandemic; but now that more employees than ever are working from home, there are still a lot of questions. California Labor Code Section 2802. That includes potential exposure to messy, employee-triggered lawsuits that typically come along with additional fees and interest. An expense is also “necessary” if it occurs because the employee is following the directions given by the employer. That includes expenses you might incur while working from home. There is no specific deadline for reimbursement of business expenses. He has deducted monies that customers haven't paid him from jobs that I finished from my payroll, befor deducting taxes. 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 … Scroll to the top of the web page anchor link. California Labor Code § 2802: Employers Duty to Reimburse. Section 2802 Requires the Employer to Pay Legal Expenses Needed to Recover Work-Related Expenses. In a handful of states, employers must reimburse employees for all expenditures incurred in performing their duties at home. Employers are also required to reimburse employees for vehicle expenses (i.e., mileage expense), the cost of providing a cellular telephone or “smartphone,” and any other costs the employee might incur. When employees work from home and/or set their own working hours, an … The new Illinois law mirrors key language in California Labor Code Section 2802, California's expense reimbursement law. As a comparison, in the cell phone context, courts have held that reimbursement of expenses is always required regardless of whether the employee has an unlimited cell phone plan, a third-party payment plan, or the employee incurs extra expenses by using their personal cell phone. Home-bound employees must use their home internet to perform work, but is it reimbursable? ©2015 — 2020 Nilan Johnson Lewis PA. All rights reserved. If paying a percentage of the bill, employers should explain the calculation method to employees when they receive the reimbursement payment. Corbett H. Williams is an experienced lawyer who represents California employees in a wide range of matters, including wrongful termination, sexual harassment, retaliation, whistleblower, class action, and wage & hour cases. Read this complete California Code, Labor Code - LAB § 2800 on Westlaw FindLaw Codes are provided courtesy of Thomson Reuters Westlaw, the industry-leading online legal research system . For more detailed codes research information, including annotations and citations, please visit Westlaw . ” Its purpose is to prevent employers from passing their operating expenses to their employees. One of the most important aspects of Section 2802 is its provision that “necessary” expenses include “attorney’s fees incurred by the employee enforcing the rights granted by this section.” This means that if the employer fails to reimburse for expenses as they are incurred, it must pay the employee’s cost of hiring an attorney to recover those costs in a lawsuit. For instance, where it is mandatory for employees to use their personal cell phones for work, generally they must be compensated for a reasonable percentage of their phone plans. The most common types of expenses employees incur in performing their jobs and that employers are required to reimburse include the cost of: California Labor Code Section 2802 states that employers must “indemnify” an 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.”. Whether the employees have cell phone plans with unlimited minutes or limited minutes, the reimbursement owed is a reasonable percentage of their cell phone bills. Instead, the expenditure must be necessary. There are multiple ways to prosecute a claim under Labor Code section 2802. Labor Code - LAB GENERAL PROVISIONS. Further, business expenses are not considered “wages” under the Labor Code and, therefore, trigger no waiting time penalties*. Employers should reimburse home-bound employees for at least a reasonable percentage of their home internet expenses; risk-averse employers may choose to reimburse the entire home internet bill. Nilan Johnson Lewis is the sole Minnesota and South Dakota member of the ALFA International legal network. Code § 2802(a). Any notice under the Digital Millennium Copyright Act should be sent using our Contact Us page; specify "DMCA Notice" in the comments section. Costs of defending an employee from a work-related lawsuit. Citing Section 2802, plaintiffs' attorneys have aggressively pursued claims against California employers for failure to reimburse various employee … DIVISION 1. ABM Industries, a janitorial service provider, recently agreed to a $5.4 million dollar proposed settlement in Marley Castro, et al. Labor Code section 2802 requires employers to reimburse employees for "all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties." Otherwise, it would rarely make economic sense for an employee to file a lawsuit to recover unreimbursed work-related expenses. . And now that many employees are using their home internet, the business portion of their internet bill is reimbursable, even if they would have had a home internet plan before. California Employment law requires employers to reimburse employees for all “necessary” expenses they incur while performing their jobs. One of the most important aspects of Section 2802 is its provision that “necessary” expenses include “attorney’s fees incurred by the employee enforcing the rights granted by this section.” This means that if the employer fails to reimburse for expenses as they are incurred, it must pay the employee’s … These days, most employers cant keep pace with technology as nimbly as their workforce can. 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. Section 2802 liberally applies to many expenses that employees may be required to incur to perform their jobs, including vehicle expenses, travel expenses, and cell phone and internet plans. For this reason, reimbursement payments are often separate from taxable wages. Necessary expenditures or losses include all reasonable costs. This Labor Code section permits individual to not only recover the amount of the reimbursement they are owed, but also attorneys’ fees as well. Lab. [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? In fact, employees throughout California may be owed significant compensation for basic work-from-home expenses. Section 2802 does not specify how the employer may pay reimbursement to the employee. Can the reimbursement be made in a lump sum? 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. But case law also suggests that reimbursing a percentage of expenses based on employees’ actual or expected work-related internet use may be sufficient. He says, it's to cover the cost of doing business that we as plumbers cost him per day. Under the California labor code, section 2802, all business use of a personal cell phone must be reimbursed. 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Please explain labor code section 2802. The … Employers are also free to pay a higher wage or commission in order to cover employee expenses. 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. Reimbursement may be made as expenses are incurred or in a in a bulk amount. Did you know that California Labor Code Section 2802 requires employers to reimburse employees for any necessary expenses the employees incur while doing their jobs? California law generally holds that an employer may not pass the ordinary costs of doing business on to employees. While this section does not specifically require employers to defend employees sued by third parties for conduct within the scope of employment, an employee's legal costs in defending such an action may be considered necessary under section 2802… Labor Code section 2802, subdivision (a) requires: "[a]n 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…." A. . California Labor Code § 2802. 2802. NECESSARY EXPENSES Employers must “indemnify” (reimburse) employees for all necessary expenditures and losses incurred in the performance of their job duties. Employers may reimburse home-bound employees for internet expenses in one lump sum, as long as the payment fully reimburses the employee for the actual expenses. Sec. . The BYOD trend has been driven in part by Millennials in white-collar positions who have come to rely on using thei… Costs of remote work or working from home (personal cell phone, home internet service, home office equipment, supplies, etc.). California Labor Code section 2802 requires employers to indemnify employees for all "necessary expenditures" incurred in carrying out their duties. An expense is considered “necessary” if it directly results from the employee’s performance of his or her work duties. Strict time limits may apply to your claim, so you shouldn’t wait. Risk-averse employers may choose to reimburse the entire home internet bill. Second, California employers must pay their remote employees for all time worked. In California, that can include home internet bills. but does not include expenses.”). California Labor Code Section 2802 provides as follows: (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 … In addition to requiring employers to pay the cost of a lawsuit to recover unreimbursed expenses, Section 2802 requires an employer to pay interest on all unreimbursed amounts at a Rate of 10% per year. DEPARTMENT OF INDUSTRIAL RELATIONS [50 - 176] DIVISION 2. © 2020 Law Offices of Corbett H. Williams, All Rights Reserved. How quickly must reimbursements be made? This law states that employers should reimburse employees for each and every expense that they incur throughout the course of doing business. EMPLOYMENT REGULATION AND SUPERVISION [200 - 2699.5] DIVISION 3. This means that if the expense in question is “necessary” for performance of the job, the employer must reimburse the employee 100% of the cost. California Labor Code section 2802 obligates employers to reimburse employees for “all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, …” The Cochran decision posed, and answered, the … Code § 2802(a). The Orange County based Law Offices of Corbett H. Williams is an elite employment law firm that represents employees in discrimination, harassment, retaliation, wrongful termination, wage & hour and other employment matters. California Labor Code § 2802 (“Section 2802”) requires employers to reimburse California employees for “ all necessary business expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties. Posted May 13th, 2020 in Top Stories, Legal Insights with Tags COVID-19, California Law, COVID-19 for Employers. (Labor Code section 2802). Contact us today at 949-679-9909 or use the contact form on this page, and we will respond promptly. However, this general rule has a multitude of nuances once one examines all the different costs that arise in the employment context and the various Labor Code and Wage Order provisions that apply. Courts interpreting Section 2802 require employers to reimburse 100% of all “necessary” expenses, however that is accomplished. Helpful guidance follows, but here are the highlights: California law requires employers to reimburse employees “for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.” Cal. Employers that do not closely abided by this law suffer the consequences. Thats why many forward-thinking companies are now adopting bring-your-own-device (BYOD) policies that allow employees to work on their personal laptops, tablets and smartphones instead of on company-issued equipment. Nonetheless, creative plaintiffs’ counsel may assert a claim based on employees having to wait for reimbursement, so there may be some risk in deferring reimbursement payments. California law requires employers to reimburse employees “for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.” Cal. And fill out the contact information below. In a rare case of a class action brought against a Government entity for California Labor Code violations for failure to reimburse necessary school supplies and expenses under Labor Code section 2802 as well as a breach of written employment contract, on September 22, 2015, Judge John M. Pacheco of the San Bernardino Superior Court Granted Plaintiff Dora Alcaraz’s motion … * Cal. This rule, embodied in California Labor Code Section 2802, prohibits employers from shifting their costs of doing business onto the backs of employees. Danielle Lackey November 16, 2015 . California Law; Publications; Other Resources; My Subscriptions ; My Favorites; California Law >> Code Search >> LAB LAB. First, you can bring an individual action in State Court or by filing a complaint with the California Labor Board. Consulting services provided by Nilan Johnson Lewis Consulting, Inc., a wholly owned subsidiary of Nilan Johnson Lewis PA. Link for Nilan Johnson Lewis' LinkedIn Social Media Channel, Link for Nilan Johnson Lewis' Twitter Social Media Channel. Section 2802 applies to every kind of expense an employee might incur in performing a job and includes the cost of home internet service where work from home is required. 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