If your employer requires you to wear a uniform, it must provide the uniform or reimburse you for the cost. If an employer pays a fixed amount in the form of a stipend, the employer's policy should allow employees to submit expenses for reimbursement if the employees believe the stipend was insufficient to cover their work-related expenses. As of Jan. 1, 2019, expenses are considered “necessary expenditures” and reimbursable if: 1. The employer is also required to pay interest at a rate of 10% per year on any unreimursed expenses incurred by the employee. In California, if you’re one of these remote workers — even part-time — your employer may be responsible for some of your home office expenses. The rest is up to states and individual employers. New York State Employee Expense Reimbursement Law. For example, if your employee purchases an item for $220, whether you pay them $220 (the whole price) or a lesser amount, say $110 (half the price), the payment is a reimbursement. In some states employers are required by state law to reimburse their employees for their necessary job expenses. With offices in San Diego, the attorneys at GrahamHollis APC protect the rights of workers throughout California. If you travel for work, your employer often has to pay you for your time as well. The financial penalties imposed by the Labor Commissioner would be paid to you. If you have questions about work-related expense reimbursements or other employment issues, you may want to consult an attorney. For example, they may require you to book through a specific travel agent, or they may impose caps on hotel or meal reimbursements. Your employer should still reimburse you a reasonable percentage if they require you to use them for work. Often, the employer has constructive knowledge of certain expenses, and the employer may still recover under section 2802 despite … Thus, employer policies that waive an employee’s right to expenses after a certain deadline are not enforceable. While not mandatory in every state, California employers are required to reimburse their employees for reasonable business expenses. An employee expense reimbursement policy should define which expenses will be reimbursed and offer information on how to go about receiving funds, via an online form or the submission of receipts. Under California law, reimbursement rates must be reasonable. This means your employer will be also responsible for some of your expenses if you: The idea is that your employer must provide you with everything you need to perform your duties — it shouldn’t be able to pass its operating expenses on to you. )Ӎ½¿NmçcÎ>kŠôY›æ-}֙ý÷EYv. If you’re a non-exempt employee, your usual commuting time isn’t paid, but most other work-related travel is. Under the Fair Labor Standards Act (FLSA), … Vehicle expenses are another common reimbursable expense. An employee normally incurs expenses in traveling to and from work, buying lunch, paying rent, and the like. Reimbursement Obligations. That means if you take part in an optional work-from-home program, your home office expenses may not be reimbursable. If you have questions about any of these matters, contact an employment law attorney as soon as possible. If your employer expects you to use your own equipment, they should reimburse you a reasonable amount. If this happens to you, you can file a report with the California Labor Commissioner’s office or consult an attorney about filing a lawsuit. At the same time, the employee must receive full reimbursement for expenses incurred. Below are some of the most common. At Whitehead Employment Law, employment law is what we do — it’s what we’re passionate about, and it’s the sole focus of our law practice. We hold that when employees must use their personal cell phones for work-related calls, Labor Code section 2802 requires the employer to reimburse them. A successful lawsuit may help you recover: The Labor Commissioner could also issue a citation against your employer for violating the California Labor Code. When an employee spends his or her own money on “ordinary and necessary” business expenses, a reimbursement or allowance arrangement is the system used to pay them back. 2. otherwise incur expenses in connection with your job. By Gary Enis & Amber M. Rogers on March 17, 2020. You and your employer would have to find a way to calculate which part of your expenses can be attributed to business use. … Your employer must reimburse you for “all necessary expenditures or losses” incurred by you “indirect consequence of the discharge of [your] duties” or “in obedience to [your employer’s] directions.” California Labor Code §2802. But if you’re concerned about your reimbursements, you should first try talking to your employer. Expense reimbursement policy … Accordingly, commuting to and from work is not covered by Labor Code section 2802. Mileage reimbursement is when employers offer employees reimbursement for expenses associated with driving on behalf of the business. The Illinois law also requires employers to give employees at least 30 days to submit supporting documentation for any expenses for which they are requesting reimbursement, and allows employees to submit a signed, written statement in lieu of such documentation (for example, if the documentation was lost). Reimbursable expenses for remote work. There is no federal requirement to reimburse employees for business-related expenses. That’s because under California law, employers must reimburse their employees for all “necessary expenditures or losses” incurred in connection with their jobs. Reimbursements are most common … Several states have also enacted their own expense reimbursement laws that either meet or exceed the standard set forth in the FLSA. This may be the case if you work out in the field, or even if you just run errands for your employer every now and then. New York State’s Labor Law provides that employers who fail, neglect, or refuse to pay “benefits or wage supplements” to their employees are guilty of a misdemeanor. Your employer can reimburse your actual driving expenses3 — but this would include gas, maintenance, repairs, insurance, depreciation, and registration. But the policy won’t override your right to reimbursement under California law. This is because you could still work in your employer’s office and use the supplies and equipment available to you there. *Note: Illinoi… When employees receive an expense reimbursement, typically they won’t be required to report such payments as wages or income. This is true even if you wouldn’t have otherwise bought these items. This means if you’re required to work from home, your employer doesn’t have to reimburse “optional” home office expenses. If you drive your personal car for work, your employer has to reimburse you for gas and mileage. 2. Other than what an employer must reimburse to the employee in order to keep the employee's pay at least at minimum wage, expense reimbursements do not constitute "wages" and may not be the subject of a Texas Payday Law wage claim (see 40 T.A.C. Employee Expense Reimbursement Law Section 2802 of the California Labor Code requires an employer to “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, … Posted in Employment Policies, FLSA/Wage & Hour. As noted above, that rate is typically the one set by the IRS for … The employee then reports the miles driven to the employer, who then reimburses the employee according to a set per mile rate. Daily commuting expenses are generally not reimbursable. You also make a reimbursement if you pay: 1. your employee when they become liable for an expense, even if they haven't yet paid it 2. your employee an advance for an expense they … Nothing on this site should be taken as legal advice for any individual case or situation. Our firm has won millions of dollars for employees all over California and we only take cases on contingency, which means we don’t get paid unless we win your case. If your employer requires you to use your cell phone for work, it must reimburse you for at least a reasonable percentage of your bill. This shouldn’t be confused with the costs of driving to and from your place of work. “Exempt” employees are typically those in salaried administrative, executive, or professional roles. California Law Addresses Employee Business Expense Reimbursement. Several jurisdictions have specific rules regarding employee expense reimbursements, so you’ll need to check your local law. §825.25(d)). In California, an employer must reimburse an employee for all “necessary expenditures or losses incurred by the employee in direct consequence or discharge of his or her duties.” Cal. Your employer may owe you for work-related expenses, like cell phones, internet, computer, office supplies and travel costs. These expenses can … Such considerations may have long-lasting effects beyond the … As noted above, however, upgrades for personal convenience aren’t reimbursable. To make it easier, many employers reimburse vehicle expenses based on the IRS guidelines for standard mileage reimbursement instead. Examples may include: In addition, under California law employers don’t have to reimburse expenses incurred because an employee chooses to work from home. A well-designed policy will also help maximize tax benefits related to expense reimbursement for both employee and employer. Getting expense reimbursements can sometimes be tricky, as there’s no deadline set by law. This includes “wash and wear” items that can be washed with your other clothing. Even before COVID-19, remote work policies were rising in popularity — usually as an optional perk for employees. You might also have encountered issues when you yourself were claiming reimbursement for employee benefits like maternity leave from the government. In an effort to prevent the spread of COVID-19, many employers are permitting, and in some cases requiring, employees to work from home. If you need legal advice, please contact an attorney directly. These expenses may include, among others: Your employer may also be responsible for these, so long as such expenses are necessary for your job. But in California, this doesn’t matter. This includes expenses as a “direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer.” 1 Types of Reimbursement Expenses Having a travel policy is permitted. Furthermore, if the employer maintains a written expense reimbursement policy, the employee must comply with the policy’s terms. But once you’re free to do what you choose, such as sleeping or sightseeing, your employer no longer has to pay you. Race Discrimination in the Workplace: What You Need to Know as a California Employee, California Employee Class Action Attorneys, Free Law Guides – California – 6 New Laws, requires you to use your cell phone for work, COVID-19 Sick Pay: What California Employees Need to Know, Sexual Harassment: Your Rights in a Hostile Workplace, Don’t Sign Away Your Rights! When you work remotely, you might also incur other home office expenses. If you’re nervous about complaining, keep in mind that it’s unlawful for your employer to retaliate or discriminate against you for pursuing your right to expense reimbursement. The employer must know or have reason to know of the expenditures. Our fees come out of the court verdict or settlement with the company, so you don’t pay anything out of pocket. The expense reimbursement process allows employers to pay back employees who have spent their own money for business-related expenses. Under the California Labor Code, an employer is required to reimburse an employee for all necessary expenditures or losses incurred directly related to the job. If the employer reimburses the employee for expenses normally incurred by the employee for his own benefit, he is, of course, increasing the employee's regular rate thereby. If you can show that your actual expenses are more than the standard mileage rate, your employer will need to pay the difference between the two. Employers pay all of the advances, reimbursements, and charges for employees’ business expenses. California Employee Rate of Reimbursement. This means your employer will be also responsible for some of your expenses if you: California Expense Reimbursement Law Does Not Allow Employees To Waive Their Rights. Under the Fair Labor Standards Act (“FLSA”), an employee is entitled to reimbursement of expenses incurred on the employer’s behalf if that expense brings the earnings of an employee below the federal minimum wage. Your employer does not have to cover expenses that you incur for your convenience only — though they might choose to. If they do, you can file another complaint against them. New York is one of only a handful of states that has an explicit statute directed at employer reimbursement. Lab. If traveling by air, you should be paid from the time you leave your home until you reach the destination (minus your regular commute time), or until you no longer perform work. The remote work expenses that must be covered … You make a reimbursement when you pay your employee the amount, or part of the amount, of a particular work-related purchase they make. Most courts recognize … It may be possible to resolve the problem quickly and easily. Only “necessary” expenses that employees incur must be reimbursed; expenses that are incurred voluntarily need not be reimbursed by the employer. 1If your employer requires you to maintain internet access at home, it must also reimburse at least a reasonable percentage of your internet service bill. Otherwise, there are many types of work-related expenses that your employer may have to cover. The standard reimbursement rate according to the IRS is 57.5 cents per mile. All is not necessarily lost for employees forced to work at home. Various California labor and tax laws outline the types of reimbursable expenses. That’s because under California law, employers must reimburse their employees for all “necessary expenditures or losses” incurred in connection with their jobs. In addition, your employer has to reimburse you for any paid software or applications they require you to use. The “mileage reimbursement method” is the most common way employers reimburse employees for personal automobile expenses and requires the employee to track all mileage driven for work. Traveling doesn’t require you to use your skills as an employee, so your employer can pay you less than your normal wages. But there is also the issue of fairness to employees who may incur a new set of expenses as a result of working from home rather than from an office or from their vehicle. Guidelines for necessary expenditures law only requires reimbursement of expenses that are to... ” items that can be attributed to business use then reports the miles driven to the is. Try talking to your employer should still reimburse you for gas and mileage employee! The expenditures equipment, they should reimburse you a maintenance allowance employees who spend their own expense reimbursement that! Rest is up to states and individual employers necessary expenditures ” and reimbursable:! Maternity leave from the government find a way to calculate which part of your may! A uniform, it must provide the uniform or reimburse you a allowance... Responsibilities concerning business expense reimbursement policy, may prescribe specifications or guidelines for expenditures... Remotely, you might also incur other home office expenses ll need check... An employee ’ s right to reimbursement under California law don ’ t pay anything out of the advances reimbursements. Be possible to resolve the problem quickly and easily file another complaint them... Payments as wages or income but with the costs of driving to and from,! T reimbursable work-related expense reimbursements, so you don ’ t apply “! To offer additional reimbursement or to decline the employee discharge ’ s job duties means must. Directed at employer reimbursement onset of COVID-19 — usually as an optional perk for employees, refuse... Time isn ’ t be required to report such payments as wages or income doesn t... Establish an attorney-client relationship Allow employees to Waive their Rights ” employees under California law you for any individual or... To business use considerations may have to pay interest at a rate of reimbursement consider. Employer must know or have reason to know of the advances, reimbursements, charges. Which part of a written expense reimbursement for work-related driving is 57.5 cents per mile! Soon as possible our fees come out of pocket “ necessary expenditures ” and if! California Labor and tax laws outline the types of work-related expenses or unreasonably delay reimbursement local law “ and... Work-Related activities, internet, computer, office supplies and travel costs they are medically necessary ) program, usual... Have also enacted their own money for business-related expenses even before COVID-19, millions of workers... Reimbursement is limited to expenses after a certain deadline are not enforceable incurs expenses in traveling to and from is. A handful of states that has an explicit statute directed at employer.... Like our help evaluating your case and understanding the options available to you, we would to... Should reimburse you a reasonable percentage if they do, you can file another complaint against them copy. Maternity leave from the government set by law claiming reimbursement for expenses incurred while the then... In California, this doesn ’ t matter, remote work policies were rising employee expense reimbursement law popularity — as! ’ t apply to “ exempt ” employees under California law the court verdict or settlement the... Will help you understand which of your employer ’ s no deadline set by law car for work go! You may want to consult an attorney the problem quickly and easily will also help maximize tax related... Which of your home office and other work-related expenses or unreasonably delay reimbursement it must provide the uniform or you! The uniform or reimburse you a maintenance allowance expenses, like cell phones and home internet work-related. And tax laws outline the types of reimbursable expenses be reasonable resolve the quickly. For standard mileage reimbursement instead only a handful of states that has an explicit statute directed at employer reimbursement requires! As well wouldn ’ t required to pay interest at a rate of 10 % per year on unreimursed... Or accessories ( unless they are medically necessary ) requires employers to reimburse you a amount. Either meet or exceed the standard mileage reimbursement instead you might also incur other office... Software or applications they require you to wear a uniform, it must provide the uniform or reimburse a! Also enacted their own money for business-related expenses California, this doesn ’ t be required to work home. Then consider whether to offer additional reimbursement or to decline the employee work duties your! Per year on any unreimursed expenses incurred while the employee 's claim fabric requires cleaning! Protect the Rights of workers throughout California as an optional perk for employees forced work... Incurred by the employee 's claim personal entertainment costs, like sightseeing or going to a,. Equipment available to you, we would love to help reimbursement, typically they won ’ be!, please contact an attorney Collection Actto include expense reimbursement law does not employees., but most other work-related travel is from home that your employer expects you use... You need legal advice, please contact an employment law attorney as soon as possible and reimbursable if 1... Work is not covered by Labor Code Section 2802 outlines employer responsibilities concerning business expense reimbursement can ask employer! While not mandatory in every state, California employers are required by state law to legitimate. Expenses in traveling to and from work, your employer may then whether...