As required by California Labor Code 2802, employees are entitled to reimbursement for all business-related expenses. Here is everything an employee needs to know about reimbursement for necessary expenditures or losses.
California Labor Code Section 2802 defines “necessary expenditures or losses” as all reasonable costs, including any fees for an attorney that is required to enforce this law. These reasonable costs are not narrowly specified but can include items like equipment and materials, as well as intangible expenses such as internet or mileage. It is crucial for an employee to know their rights regarding reimbursement for work expenses, so they can ensure their employer is compensating them adequately.
What Expenditures Are Eligible for Reimbursement?
Whether or not the expenditure will be eligible for reimbursement will be partly determined by the nature of the job itself. For example, a business associate likely will be reimbursed if they have to travel for work-related conferences, whereas a bakery employee may not find eligibility for reimbursement in that area.
Additionally, many employers will have personalized reimbursement policies for their employees, so it is important for the employee to contact their employer to see if one is provided. Here are some general work-related expenses that an employee can expect to be reimbursed for:
- Travel expenses
- Business use of a personal cell phone
- Fees for attending conferences
- Costs of a work uniform
- Driving costs, including a mileage reimbursement for distance traveled and tolls paint in a personal vehicle
- Training or education costs
- Postage costs
However, reimbursement is never guaranteed unless specifically stated by the employer or their policy. It is encouraged that every employee contact their employer about whether they provide a reimbursement policy or what sort of expenses they can expect reimbursement for within their job.
Related: California Labor Code 221: Deductions from Wages
Reimbursement for Mileage
The Internal Revenue Service (IRS) is responsible for the standard mileage rates of all vehicles in the country. These rates are used to calculate the deductible cost of operating a vehicle for business, which is how employers determine reimbursement for mileage used for work. Here are the new standard mileage rates for the use of a car, vans, pickups, or panel trucks, as of January 1, 2021:
- 56 cents per mile driven for business use,
- Down 1.5 cents from the rate of 2020
- 16 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed forces,
- Down 1 cent front the rate of 2020
- 14 cents per mile driven in service of charitable organizations,
- The rate is set by statute and has not changed
An employee can refer to this standard if they want to calculate how much reimbursement for the mileage they should be receiving at work. Further information regarding the standard mileage rate for business use is also located here.
What if the Employer Fails to Reimburse?
California labor law requires every employer to reimburse their employees for all work-related losses and expenses. An employer who fails to do so could be subject to legal and financial penalties.
An employee is entitled to seek financial reimbursement by the court if their employer fails to provide rightful compensation. If the employee is seeking financial reimbursement through the court, they also may be able to include any additional attorney fees and court costs in their “necessary expenditures”. Potentially, this would cover both the original reimbursement owed to them as well as any supplementary costs added for having to take the issue to court.
Additionally, the employer may be subject to a citation by the California Labor Commissioner’s Office for violating the California Labor Code. The amount that is collected by the Commissioner’s Office will also be paid to the employee who was affected.
Every employee has the right to file a lawsuit against their employer and is protected by California Labor Code 98.6 from any workplace retaliation. This law restricts any actions that are considered retaliation such as discrimination, harassment, or termination.
Contact Us
If you or a loved one is seeking reimbursement for necessary expenditures or losses under California Labor Code 2802, contact us. We’ll get you a free consultation with one of our California Employment Attorneys today!