That includes potential exposure to messy, employee-triggered lawsuits that typically come along with additional fees and interest. For example, if an employee […] 2802. The California Labor Code – and, consequently, Section 2802 – only applies to employees. or losses incurred by the employee in direct consequence of the discharge of his or. with Distinction from Stanford Law School and is a graduate of Brown University (Phi Beta Kappa, Magna Cum Laude). California Labor Code section 2802 requires employers to reimburse employees, “for all necessary expenditures or losses incurred by the employee” while completing work duties. For that reason, other states in the U.S. have already begun to follow California’s lead. Types of Expenses Before founding Cadence Counsel, Danielle practiced as a litigator at Latham & Watkins, representing major corporations and senior executives in complex civil and criminal matters. However, Labor Code section 2802 does not contain any language expressly stating that it applies to public entities, and at least two California Courts of Appeal have held that public entities are not subject to general Labor Code provisions unless expressly included. CA 2802. He alleged causes of action for violation of Labor Code section 2802; unfair business practices under Business and Professions … Areas employers should review as part of their yearly audit – part two By Anthony Zaller on December 19, 2014 The penalty amounts and procedures applicable to “expenses” are … This law states that employers should reimburse employees for each and every expense that they incur throughout the course of doing business. Gattuso v. And with the year coming to a close, now is a great time to review these five items: Mileage reimbursement considerations under California law, Mileage reimbursement issues under California law, Friday’s Five? Disclaimer: Motus prepared this material for informational purposes only. The underlying assumption of Labor Code Section 2802, Cochran, and Gattuso is that an employer provides employees with the equipment and resources necessary for employees to perform their jobs. California Employment law requires employers to reimburse employees for all “necessary” expenses they incur while performing their jobs. Motus does not provide tax, legal, or accounting advice. Obligations of Employer Section 2802 To prevail … The decision relies upon Labor Code section 2802. With Motus, accurately capturing business mileage has never been faster or easier. As such, employers should be sure to implement programs to reimburse employees for such expenses as home internet, cell phone usage, printer ink, paper, and other relevant supplies. This post discusses more generally what employers should audit on a yearly basis. California Labor Code Section 2802. Download our white paper to learn more about California 2802. California Labor Code section 2802 obligates employers to reimburse employees for “all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, …” The Cochran decision posed, and answered, the “threshold question” presented on appeal as follows: California Labor Code section 2802 requires employers to indemnify employees for all "necessary expenditures" incurred in carrying out their duties. In Massachusetts, employers must reimburse employees for the excess time and expenses that may occur in the event they report somewhere that’s not considered their typical place of work. He alleged causes of action for violation of Labor Code section 2802; unfair business practices under Business and Professions…. The Cochran court determined that Labor Code section 2802 included an employer’s obligation to reimburse an employee whenever the employee uses his/her cell phone for work related duties. [1] But what if an employee’s work-related activities do not actually generate any expense in addition to that which the employee would have normally incurred otherwise? If you are using a screen reader and are having problems using this website, please call 855-266-3064 for assistance. Employee desire reimbursement for his or her actual expenses. Reimbursement for mobile employees can be tricky and ambiguous for companies across the country. (Labor Code sections 400–410.) The law is intended to prevent employers from passing on their operating expenses to their employees. … Did you know that California Labor Code Section 2802 requires employers to reimburse employees for any necessary expenses the employees incur while doing their jobs? Historically, California has been a leader in drafting legislation that ranges from the environment to cybersecurity. California Labor Code § 2802: Employers’ Duty to Reimburse. Whether the employees have cell phone plans with unlimited minutes or limited minutes, the reimbursement owed is a reasonable percentage of their cell phone bills. California Expense Reimbursement Law Does Not Allow Employees To Waive Their Rights. Is a company obliged to pay for the costs incurred in connection with the use of a personal device for work? Please note, use of this product requires a Motus app subscription. The eleven factor test to determine if training time is compensable under California law, Uber class action certified, five takeaways for California employers, Five wage deductions California employers cannot make, Five statutes that can shift attorney’s fees to employers, Personal cell phones at work: Five lessons employers should take away about expense reimbursement set forth in Cochran v. Schwan’s Home Services, Areas employers should review as part of their yearly audit – part two. California has seen the cycle of this disconnect for decades. California Labor Code section 2802 has been around for a long time (since 1937, to be exact). 335 through 349.5] while the recovery of a penalty generally has a one-year statute of limitations. Labor Code Section 2802. This law states that employers should reimburse employees for each and every expense that they incur throughout the course of doing business. Necessary expenditures or losses include all reasonable costs. Labor Code Section 2802. Id. For any such advice, you should consult your own advisors. This law states that employers should reimburse employees for each and every expense that they incur throughout the course of doing business. California Labor Code section 2802 requires employers to reimburse employees, “for all necessary expenditures or losses incurred by the employee” while completing work duties. California Labor Code Section 2802. (b) The injury or death was caused in whole or in part by the want of ordinary or reasonable care of a fellow servant. Grave consequences accompany inaccurate or unjustifiable reimbursements for employees. Louisiana Civil Code 2298 states that “A person who has been enriched without cause at the expense of another person is bound to compensate that person…[regulation measures] the amount of compensation due… by the extent to which one has been enriched or the other has been impoverished, whichever is less”. REIMBURSEMENT OF EXPENSES Employers must reimburse employees for losses and reasonable expenses incurred in the performance of the employee’s job duties. Still, they do have certain civil codes that seem to highlight some similarities. Section 2802 of the california labor code requires employers to reimburse their employees for the reasonable and necessary expenses they incur in direct consequence of discharging their job duties. Employers that do not closely abided by this law  suffer the consequences. Labor Code section 350 states unequivocally that “Every gratuity is hereby declared to be the sole property of the employee or employees for whom it was paid, given or left for.” In addition, Labor Code section 351 clearly states…, You may recall from your college business law class of the “American rule” regarding attorney’s fees: generally in the United States each side is responsible to their own attorney’s fees, and unlike other countries, the loser does not have to pay the other party’s attorney’s fees. In California, Labor Code section 2802 requires employers to reimburse employees for expenditures the employee incurs as a consequence of performing work. To provide a tangible example, in Gattuso v Harte-Hanks Shoppers, the California Supreme Court ruled that employees should be reimbursed for any and every expense they incur (including automobile expenses). Prior to joining Motus, Danielle co-founded and served as CEO of Cadence Counsel, a company that helps law firms and companies thrive in an environment where work, as we know it, is rapidly changing. While this section does not specifically require employers to defend employees sued by third parties for conduct within the scope of employment, an employee's legal costs in defending such an action may be considered necessary under section 2802… The purpose of this statute is "to prevent employers from passing their operating expenses on to their employees." Zep, Inc., 2014 U.S. Dist. No contract, or regulation, shall exempt the … Thus, to be in compliance with section 2802, the employer must pay some reasonable percentage of the employee’s cell phone bill. We hold that when employees must use their personal cell phones for work-related calls, Labor Code section 2802 1 requires the employer to reimburse them. Employers desire increased transparency into the reimbursements it is distributing. One essential thing to note? In order to mitigate such risk, companies should look to fair, accurate and defensible vehicle programs that will be beneficial in the long run. The new Illinois law mirrors key language in California Labor Code Section 2802, California's expense reimbursement law. her duties, or of his or her obedience to the directions of the employer, even though unlawful, Id. Section 2802 of the California Labor Code requires employers to reimburse their employees for the reasonable and "necessary" expenses they incur in direct consequence of discharging their job duties. Other states, such as Louisiana, don’t have specific labor laws that directly correlate to California’s 2802. The analysis is very difficult, and fact…, This week, a federal court in northern California certified portions of a class action brought by Uber drivers who worked in California since 2009 (click here for the decision [PDF]). VI. California Labor Code section 2802 requires employers to reimburse employees, “for all necessary expenditures or losses incurred by the employee” while completing work duties. Motus Releases 2021 Predictions on Remote Work, Vehicles, Drivers and Business Devices, BYOD, CYOD and COPE: Differences, Drawbacks and Benefits, Arriver Services: The Rise of Services Delivered to Your Doorstep, The Importance of a Cost of Living Comparison, Vehicle Depreciation in 2020: How the Pandemic Has Affected the Auto Industry, some of which can reach close to seven figures, fair, accurate and defensible vehicle programs that will be beneficial in the long run. Thus, the first step of any Section 2802 analysis is to ask who is submitting the request. Labor Code Section 2802 Travel Expense Reimbursements Title 8 of the California Code of Regulations Sections 13700 through 13706 Notice of Proposed Rulemaking, Title 8 of the California Code of Regulations, Sections 13700 through 13706 This cycle gave rise to the state’s well known, intricate labor laws. California Labor Code § 2802. Labor Code section 2802, subdivision (a) requires: "[a]n 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…." California’s Labor Code Section 2802 normally requires employers to reimburse employees for “reasonable” and “necessary” expenses incurred while performing their job duties. Motus does not intended to provide, and should not be relied upon for, tax, legal, or accounting advice. 335 through 349.5] while the recovery of a penalty generally has a one-year statute of limitations. California Labor Code § 2802. EMPLOYMENT RELATIONS [2700 - 3099.5] ARTICLE 2. Necessary expenditures or losses include all reasonable costs. In my last post, I wrote about what steps employers should talk to comply with the new employment laws for 2015. Section 2802 operates to prevent an employer from passing its operating expenses to employees. How to Optimize Your Investment and Cut Costs, Creating Tax Solutions Through Business Vehicle Technology: A Medical Device Company Reduced Its Fica Tax by Almost $500,000, If it doesn't load, you can fill out the form here. Remote-Work Expenses And Labor Code Section 2802 March 17, 2015 I recently published a short article in the California Labor & Employment Law Review that addresses an employer’s obligations to reimburse employees for expenses they incur while working remotely (i.e. Over 160,000 drivers have worked for Uber in California during this time period, and while the case is making a lot of news,…, All tips are the employee’s property, and cannot be taken by the employer. Labor Code Section 2802. Inaccurate or unjustifiable reimbursement for your mobile workers can land your company into danger, most often in the form of costly lawsuits (some of which can reach close to seven figures). California Labor Code § 2802. The term "uniform" includes wearing apparel and accessories of distinctive design and color. The state is home to the nation’s largest population, and many of its citizens are not afraid of political involvement. The code ensures that “An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of … § 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, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful. California Labor Code section Section 2802 provides, in pertinent part, “(a) An employer shall indemnify his or her employee for all necessary expenditures. Labor Code section 2802, subdivision (a) requires: "[a]n employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in … The decision relies upon Labor Code section 2802. 2011 California Code Labor Code DIVISION 3. In law school, attorneys-to-be are taught to “issue spot,” and the unfortunate litigation landscape that faces California employers, business owners and their supervisors must also “issue spot” and…, Employers that utilize interns, or who provide training to individuals that may lead to employment run the risk of having these individuals qualify as an employee, which would require the employer to comply with Labor Code requirements such as minimum wage, meal and rest breaks, and overtime pay. 2014), the court held that Labor Code section 2802 also applied to non-California residents that performed work in the state. The latest litigation trends, court decisions, & issues on California Employment Law, California law generally holds that an employer may not pass the ordinary costs of doing business on to employees. Employers that do not closely abided by this law suffer the consequences. New Hampshire maintains labor code that states employers should reimburse employees for any expenses that are considered outside of their pre-determined expenses. This rule, embodied in California Labor Code Section 2802, prohibits employers from shifting their costs of doing business onto the backs of employees. Citing Section 2802, plaintiffs' attorneys have aggressively pursued claims against California employers for failure to reimburse various employee … The consequences to the employer for violations are severe, including penalties, interest and attorney’s fees (subsections (b), (c) and (d).) This article addresses…, Expense reimbursement may seem like a small issue in comparison with the other areas of liability facing California employers, but the exposure for not appropriately reimbursing employees can be substantial. The best representation of this? Necessary expenditures or losses include all reasonable costs. 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