Reasonable & Necessary Business Expenses Under California Law
Reimbursements Are Key To A Fair And Healthy Employment Relationship
Getting business expenses reimbursed is vital to having a healthy and lawful employment relationship. Also, reimbursing employees for money spent on work is fair and critical for the employee’s financial well-being. Furthermore, California law recognizes reimbursement of expenses through Labor Code § 2802, which provides that “[a]n employer shall indemnify his or her employee for all necessary expenditures or losses [including reasonable costs] incurred by the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful.” The guiding principle of the rule is to prevent employers from passing expenses onto their employees. See, e.g., Gattuso v. Harte-Hanks Shoppers, Inc. (2007) 42 Cal. 4th 554, 562 (discussing legislative history of § 2802). Building upon this general rule, several examples explain how this rule has been applied in California.
Examples Applying Labor Code § 2802
Reimbursement Of Cell Phone Expense
If personal cell phone use is mandatory for work, the law requires reimbursement of a reasonable percentage of the cell phone bill. For example, in Cochran v. Schwan’s Home Service, Inc., the Court of Appeals held that the employer must provide a reimbursement, even when there are not extra expenses for the cell phone bill.
Reimbursement Of Mileage Or Actual Vehicle Expenses
If an employer requires operation of a personal vehicle for business purposes, the employer must provide an adequate reimbursement. The reimbursement can be through a proper mileage reimbursement or for actual costs of the operation of the vehicle under Gattuso.
Reimbursement Of Insurance Coverage Expense
If an employer requires additional insurance coverage beyond the minimum level already required under law, an employer must provide a reimbursement as per Gattuso.
Reimbursement Of Business Travel Expenses
If an employer requires an employee to travel for company business, the employer must reimburse for travel expenses under Gattuso v. Harte-Hanks Shoppers, Inc.
Lawyer For Expense Reimbursements
If you think you may have an issue involving expense reimbursements, contact an experienced expense reimbursement labor lawyer for a free consultation immediately because time may be of the essence. Many of these types cases are covered by laws allowing for attorneys’ fees, so you may be able to get attorneys’ fees covered as well.