Reimbursement for Work Related Expenses

California Labor Code Section 2802 requires employers to reimburse employees for reasonable work-related expenses. Specifically, the section requires employers to “indemnify” the employee for “necessary expenditures or losses” the employee incurs as a ‘direct consequence’ of work duties, or the employee’s “obedience” to the direction of the employer. This law favors reimbursement so much that employees are to be reimbursed even if the employer gives the employee an “unlawful” direction which leads to an expense, unless the employee knew the direction was unlawful at the time of obeying the directions.

Bay Area employees are entitled to interest on unpaid amounts. Their employment attorney is entitled to recover attorney’s fees for having to collect expenses. So, if you hire an attorney to make a demand or sue your employer for failure to reimburse expenses, the attorney can potentially get you the full amount you are owed, plus interest, plus some portion of an attorney fee rate for providing that service to you. The principle here is that you are entitled to be reimbursed in full, and the attorney is entitled to payment for having to make your case for you. The following are some examples for you to consider when thinking whether to call an experienced employment law attorney.

Example 1 – Reasonable Work-Related Expenses: Employee is a traveling salesperson based in Oakland, California. Their territory spans from the San Francisco Bay Area to Los Angeles. Employee frequently drives to locations in Hayward, Berkeley, and San Jose, and flies to customer locations in the greater Los Angeles and San Diego areas. Employee also regularly uses their cell phone and their own internet service to conduct work for the employer. Employee is entitled to reimbursement for work related mileage, plane flights, and reasonable meals and drinks during customer meetings. Employee is also entitled to have the employer pay a portion of employee’s cell phone and internet bills on monthly or bi-monthly basis. Employee may also be entitled to interest, plus attorney’s fees and costs of suit, if a lawsuit is required to recoup expenses. Employee should generally ask for reimbursement first before taking legal action.

Example 2 – Unreasonable Work-Related Expenses: Same example as above, except that after a work-related dinner is completed, employee and customer take an Uber to a bar for more drinks where non-work topics are discussed, and then they go to the End Up in San Francisco, where they continue to drink and dance with friends. Employee is unlikely to get reimbursed for the Uber to the bar and to the End Up, or for the drinks associated with the non-work related fun after the legitimate business dinner.

Example 3 – Reasonable Work-Related Expenses with Unknown Unlawful Purpose : Employee works for a day care facility in San Leandro, California that oversees approximately ten children and has three staff, including the owner of the home where the facility operates. Owner requests that employee to go to Best Buy to purchase a video recording device, not knowing the owner intends to install the device in a bathroom to peep on his two female employees. Employee is entitled to reimbursement for the mileage to Home Depot and the cost of the device, since she did not know about the unlawful recording scheme.

Example 4 (and variants) – Work Related Travel Expenses: Construction workers A and B work for general contractor GC. A and B live in Livermore, California. A picks up and drives B to work because A and B live blocks away from each other. GC’s current work site is in Hayward, California. A and B regularly carpool together to Hayward in the morning to work, and back to Livermore together after work. Employees A and B are not entitled to reimbursement for mileage to and from work.

• Variant 1: After arriving at work in Hayward, GC asks A and B to go to Ace Hardware to buy some nuts and bolts and come back to the job site. A drives, then pays for parking for 10 minutes, while B purchases the nuts and bolts. A is entitled to reimbursement for the work-related job errand, including parking, and B is entitled to reimbursement for the nuts and bolts. If A and B are both texting GC about their estimated time of arrival back to the job site, both A and B are entitled to be reimbursed for some portion of their cell phone bill.
• Variant 2: While on the way back to the job site in Hayward, A and B decide to go their favorite sushi restaurant in San Lorenzo, which is not on the way back to the job site. A is not entitled to the extra mileage to the sushi restaurant. Neither A nor B are entitled to reimbursement for the lunch they ate together since no work matters were discussed or cleared with GC ahead of time. Principle to note: personal errands with work colleagues are generally not expensable.
• Variant 3: After having lunch in San Lorenzo, GC tells A and B to drive to another job site in Union City, pick up some extra lumber, and bring it back to the job site in Hayward. Keeping all of the above factors above constant, A is entitled to the mileage from the Ace Hardware to Union City and back to the job site in Hayward. Principle to note: driving to and from a different job site, after arriving at work or on a work errand, are expensable.

There are many more examples we could list for you, but these are the some of the most common expense reimbursement scenarios for Bay Area employees. We recommend that employees keep track of their work-related mileage using a mileage app on their phone, or least write their mileage down daily and text or e-mail that data to the employer the same day.

We recommend that employees talk to their employers about the expenses they incur and ask for reimbursement in writing. We also highly recommend talking to your supervisor in advance of making an abnormally expensive purchase. Obtaining approval in writing is best. Finally, be sure to check your pay stubs when you are paid to be sure that those expenses were actually reimbursed.