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Employee reimbursement for job-related expenses in California

by | May 12, 2021 | Employment Law

Section 2802 of the California Labor Code requires employers in the Golden State to reimburse their employees for job-related expenses. This is to prevent companies from passing the costs of doing business on to their workers. However, Section 2802 states that only expenses that are necessary and reasonable must be reimbursed.

With more and more employees paying higher utility bills and purchasing computers and other devices to work from home, the issue of expense reimbursement has become a hot-button employment law topic. Let’s look at this issue more closely.

Reasonable and necessary

Reimbursing employee expenses is relatively straightforward when workers submit cellphone records or receipts for gasoline, but things become more complicated when employers must decide how much of an electricity bill to pay. Expenses can also be necessary but not reasonable. This could happen when an employee purchases a laptop computer costing $3,000 to work from home when a machine costing far less would have been sufficient. In this situation, the employee would be entitled to reimbursement, but they would receive less than the $3,000 they paid.

Section 2802 violations

Employers who do not reimburse their employees fully or who deny legitimate Section 2802 claims for no good reason can face civil sanctions. The Private Attorneys General Act is a California law that allows workers to sue their employers over labor law violations, and plaintiffs can join together to file class-action lawsuits when violations are widespread. Employers who comply with Section 2802 but do not reimburse their workers in a timely manner could face additional penalties.

Company policies and employee rights

Workers who could file PAGA lawsuits against employers for refusing to reimburse legitimate expenses, denying overtime pay or violating California’s labor laws in some other way are sometimes reluctant to take action because they signed contracts of employment that contain arbitration clauses. Attorneys with experience in this area could explain that employment contracts containing provisions that require legal disputes to be settled through arbitration are not enforceable in PAGA cases because they violate public policy. Attorneys could also point out that company reimbursement policies that contradict Section 2802 are similarly unenforceable.