Reimbursement of Business Expenses

All employers in California are required to reimburse their employees for their legitimate business expenses. If an employer knows that an employee is incurring business costs for the purpose of the employer’s business, then the employer is required to reimburse the employee for their work-related expenses.   

Labor Code section 2802(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.”

This means that an employer must reimburse an employee for all work-related expenses and expenditures that the employer is required to pay him/herself. The fact that the employer knows that the employee is incurring business expenses is sufficient for the employer to be liable for the business expenses. 

When considering reimbursement of expenses, the items that typically come to mind are mileage and parking. However, one may also include: 
(1) use of personal cell phone for work;
(2) use of personal laptop or computer, scanners, and printers if required to use for work;
(3) cost of an internet connection if needed to perform work;
(4) infrastructure costs associated with home office/work space if an employee is required to work from home. 

For purposes of calculating reimbursement for home office, employers can use the IRS standard by which a home office deduction is taken for purposes of preparing federal tax returns.

If your employer fails to pay for your home-based internet, or a portion of your cell phone, then you might have a valid claim against your employer. Our law firm has  successfully represented employees against some of the biggest corporations in California. Please call today to schedule an appointment with our attorneys. 

Julio is a driver for a transportation company and uses his PERSONAL cellphone to contact customers. He is also required to download several apps to his cellphone for his job. Julio will be entitled to cell phone reimbursement and all penalties associated with his claim. 
Ella is a data analyst working for a major accounting firm. Since the beginning of the pandemic, Ella had to work from home following the stay-at-home order in all counties. Ella incurred at least a couple of hundred dollars every month for her home office, which includes internet, electricity, cell-phone, laptop and her desk. Even though Ella never requested reimbursement, Ella still has a claim for her home-based internet.

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