California Disability Discrimination: The ADA and FEHA, FMLA & CFRA: California Leave Rights & Conditions. The Manual is not binding legal authority. 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. Mileage reimbursement based on IRS mileage rate is presumed to reimburse employee for all actual expenses. June 27, 2017. By Terry O'Connor Labor Code § 2802 requires California employers to reimburse employees for all necessary expenditures incurred in the performance of their duties. Gattuso, at 480. In examining the different methods of reimbursement, the Supreme Court held that the actual expense method is the most accurate, but it is also the most burdensome for both the employer and the employee. If you have been the victim of wrongful termination, wrongful demotion or any kind of discriminatory business practices, it is time to take action and contact a Ventura employment law attorney that can help. Types of Expenses The Cochran case expressly extended the expense reimbursement requirement to cover personal cell phone usage where the employer does not otherwise provide the equipment and/or a cellular plan. In general, employers must reimburse the cost of uniforms, travel expenses, tools and equipment required for the job. Harassment Advice: What Should You Do If You’re Being Harassed? The law is intended to prevent employers from passing on their operating expenses to their employees. Employers sometimes focus on federal tax-related rules and impose “per diem” expense limits set by the Internal Revenue Service. In this article, we will delve into the intricacies of mileage reimbursement, and demystify the reimbursement laws in California. In Gattuso v. Harte-Hanks Shoppers, Inc., the California Supreme Court clarified the parameters of mileage reimbursement under California law, as well as the three different methods available for employers to reimburse employees for their mileage reimbursement. For more detailed codes research information, including annotations and citations, please visit Westlaw . California Employment law requires employers to reimburse employees for all “necessary” expenses they incur while performing their jobs. In fact, employees throughout California may be owed significant compensation for basic work-from-home expenses. Under California Labor Law, must employers reimburse employees for expenses incurred at work such as auto or mileage expenses? The purpose of this statute is "to prevent employers from passing their operating expenses on … If an employee’s duties require the use of the employee’s car, the employee should receive reimbursement for automobile expenses such as mileage, gas, and wear and tear. . Under section 2804, however, any agreement made by the employee is null and void insofar as it waives the employee’s rights to full expense reimbursement under [Labor Code] section 2802. Mileage reimbursement issues under California law, Mileage reimbursement considerations under California law, Wage and hour audit considerations for California employers in 2019, Five employment law developments employers need to heed at the start of 2019, 53.5 cents per mile for business miles driven, down from 54 cents for 2016, 17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016, 14 cents per mile driven in service of charitable organizations. Your job is more than just a source of income. California Arbitration In Employment Disputes: Don’t Believe The Hype! It is a major part of your lifestyle. In addition to paying for travel time, under California Labor Code section 2802, employers are responsible for paying employees’ “necessary” business expenses, including travel-related expenses. Section 2804 says that employees cannot “waive” (i.e., forfeit) their right to receive reimbursement for miles driven for work. A statutory duty generally has a three-year statute of limitations, [See CCP Sec. In addition to mileage, employers may also have to reimburse employees for other costs they incurred in driving their personal cars for business. Corbett H. Williams Employment Law. division 1. department of industrial relations [50 - 176] division 2. employment regulation and supervision [200 - 2699.5] division 3. employment relations [2700 - 3100] The new Illinois law mirrors key language in California Labor Code Section 2802, California's expense reimbursement law. California Labor Code section 2802 has been held to cover the following types of necessary expenses: Personal Vehicle Usage: Employers must reimburse employees who use their personal vehicles in completing job duties, typically at the IRS’ standard mileage rate. Employers do not need to provide reimbursement for expenses incurred by independent contractors. . 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. Can I file a lawsuit to get unpaid travel expenses reimbursed in California? The California Labor Code – and, consequently, Section 2802 – only … The actual expenses of using an employee’s personal automobile for business purposes include: fuel, maintenance, repairs, insurance, registration, and depreciation. The upshot is that employers can have different expense reimbursement plans, but the plan must reimburse the entire cost of using a personal car on-the-job, including depreciation. The employer must communicate to its workers the method or formula used to reimburses for car expenses. ABM Industries, a janitorial service provider, recently agreed to a $5.4 million dollar proposed settlement in Marley Castro, et al. All right reserved. This Friday’s Five post discusses five issues employers need to know about automobile and mileage reimbursement under California law. This type of lump sum payment is often labeled as a per diem, car allowance, or gas stipend. § 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. Overtime Pay Laws in California & Exemption Laws. In Gattuso v. Harte-Hanks Shoppers, Inc., an outside salesperson wanted to recover for driving his personal car to meet clients, and the California Supreme Court held that employers could adopt different types of expense reimbursement plans under California law such as lump sum payments, the IRS Standard Mileage Rate, or higher wages to compensate for auto expenses. California Labor Code section 2802 requires employers to reimburse their employees for mileage they incur in the course of their employment. The Court also warned that employee cannot waive the right to be fully reimbursed for their actual expenses: We agree that, as with other terms and conditions of employment, a mileage rate for automobile expense reimbursement may be a subject of negotiation and agreement between employer and employee. The California Labor Law. . California Labor Code section 2802 requires employers to indemnify their workers for expenses they necessarily incur in their duties. California Labor Code § 2802. Necessary expenditures include any attorney fees or costs incurred by employees to recoup … 2. California Labor law requires that employees be reimbursed for their work related expenses, such as mileage, supplies, training, tools and equipment and even legal expenses. The 2017 IRS mileage rate is as follows: If the employee challenges the amount reimbursed, the employee bears the burden to show how the “amount that the employer has paid is less than the actual expenses that the employee has necessarily incurred for work-required automobile use (as calculated using the actual expense method), the employer must make up the difference.” Gattuso, at 479. Subscribe to Labor Code Section 2802. © 2020 by The Kaufman Law Firm. By clicking submit you are agreeing to the. In Gattuso, the Court made it clear that employers paying a lump sum amount have the extra burden of separately identifying and documenting the amounts that represent payment for labor performed and the amounts that represent reimbursement for business expenses. In doing so, the employer can utilize an actual reimbursement, mileage reimbursement, or lump-sum method. Don’t forget about other expenses incurred in the “course and scope” of working. You Have Rights As A Worker. California Labor Code Section 2802 obligates employers to reimburse their employees for all expenses incurred during the … code: article: section: code: section: ... labor code - lab general provisions. Labor Code Section 2802. The California Supreme Court also held that the reimbursement rate can be negotiated by parties as long as it fully reimburses the employee, and the amount does not have to be set at the IRS mileage rate. Whether your company pays a monthly allowance or the IRS mileage rate, you cannot assume that your program complies with CA Labor Code 2802(a). 5. v. ABM Industries, Inc., a class action involving a California class of over 3,000 cleaning employees who claim that they were not reimbursed under Labor Code section 2802 for the expense of required use of their personal cellphones. 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) 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. Under California labor law, employers must reimburse employees the entire expense of using personal automobiles. The employer then multiplies the miles driven by a predetermined amount that approximates the per-mile cost of owning and operating an automobile. 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 … Yes. 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