In a handful of states, employers must reimburse employees for all expenditures incurred in performing their duties at home. . That includes expenses you might incur while working from home. 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. According to the California Supreme Court, whether an expense is “necessary” under Section 2802 depends on the reasonableness of the employee’s choices. California Law; Publications; Other Resources; My Subscriptions ; My Favorites; California Law >> Code Search >> LAB LAB. If the employer decides to pay this lump-sum reimbursement together with the employee’s usual wages, the employer must provide some method to identify the amount of the combined employee compensation payment that is intended to provide expense reimbursement. 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. 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. 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. 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. DIVISION 1. Risk-averse employers may choose to reimburse the entire home internet bill. For more detailed codes research information, including annotations and citations, please visit Westlaw . California Labor Code section 2802 requires employers to indemnify employees for all "necessary expenditures" incurred in carrying out their duties. If paying a percentage of the bill, employers should explain the calculation method to employees when they receive the reimbursement payment. 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. Instead, the expenditure must be necessary. 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. 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. . This was true before the pandemic; but now that more employees than ever are working from home, there are still a lot of questions. Please explain labor code section 2802. Costs of defending an employee from a work-related lawsuit. In other words, the employee’s after-tax pay must be sufficient to cover all expenses in addition to regular wages. 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 … 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. Code § 2802(a). He also has substantial experience representing business clients in consumer class action, trade secret, real estate, intellectual property and contract matters and has obtained multiple published opinions by the California Court District of Appeal and the Ninth Circuit. (“(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 above. My employer has been taking 50 dollars a week from my payroll befor he deducts taxes. Id. COVID-19 Coverage (specific to employers). California law generally holds that an employer may not pass the ordinary costs of doing business on to employees. Questions of necessity are common around the use of cell phones and other technology in the workplace. 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. In California, that can include home internet bills. EMPLOYMENT REGULATION AND SUPERVISION [200 - 2699.5] DIVISION 3. Scroll to the top of the web page anchor link. There is no specific deadline for reimbursement of business expenses. For example, if an employee […] Where the use of equipment is … 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. We won't contact you unless you want us to. Danielle Lackey November 16, 2015 . * Cal. 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. DLSE, Waiting Time Penalty FAQs (“the reimbursement for business expenses is not wages, [and] the waiting time penalty does not apply to your situation”); DLSE Enforcement Manualopens PDF file § 4.3.4 (revised Dec. 2019) (“‘Any wages’ includes any amount due as wages . Courts interpreting Section 2802 require employers to reimburse 100% of all “necessary” expenses, however that is accomplished. 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Strict time limits may apply to your claim, so you shouldn’t wait. In fact, employees throughout California may be owed significant compensation for basic work-from-home expenses. California Labor Code § 2802: Employers Duty to Reimburse. 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. Citing Section 2802, plaintiffs' attorneys have aggressively pursued claims against California employers for failure to reimburse various employee … The new Illinois law mirrors key language in California Labor Code Section 2802, California's expense reimbursement law. 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. Reimbursement may be made as expenses are incurred or in a in a bulk amount. An expense is also “necessary” if it occurs because the employee is following the directions given by the employer. Labor Code 2802 LC, see endnote 1 above. (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. Necessary expenditures or losses include all reasonable costs. The employer must provide this information to the employee at or near the time of payment. 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. 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