Everything You Need to Know About California Labor Code Section 2802: Reimbursed Expenses

Article 2 of California Labor Code Section 2802 addresses any reimbursement obligations an employer owes their employee in order for the employee to carry out their work. Here’s everything you need to know about California Labor Code Section 2802: reimbursed expenses.

It is necessary for the employer to cover any expenditures or losses that the employee accrues in order to complete their work. For example, if an employee needs to pay additional expenses for technology or wifi to complete their duties in a remote work environment, then their employer is responsible for reimbursing these fees.

Defining “Necessary Expenditures or Losses”

A necessary expenditure is any appropriate expense that the employee incurs as a result of conducting their work for their employer. By California law, any necessary expenditures or losses also pertain to any costs incurred by the employee, including attorney fees, necessary to enforce their rights granted in California Labor Code Section 2802, which are explained in further detail below.

Some common examples of necessary expenditures or losses include:

  • Travel expenses (flight, hotel, food),
  • Transportation while on a work trip,
  • Technology used for business purposes only (cell phone, computer, tablet),
  • Costs related to work uniform, and
  • Data/Wifi expenses if the employee is working from home.

The Basics

The law requires an employer to compensate their employee for any necessary expenditures or losses that they have incurred on the job. A necessary expenditure or loss must be a direct consequence of the employee carrying out their work, or by following the instruction of their employer. If any action an employee is required to do is considered unlawful, they can still receive compensation. There would be a different outcome if the employee had knowledge that the action they were intended to commit was unlawful.

Tenets of California Labor Code Section 2802

It is mandated that any awards on behalf of the employer to the employee should be made by a court or the Division of Labor Standards Enforcement. Either of these entities will issue the reimbursements, which will carry interest rates identical to those in judgments in civil actions. Interest will accumulate from the date the employee began incurring the necessary expenditure or loss.

Pursuant to Section 98 of the Labor Code, in addition to any additional recoveries the employer issues, there could be a citation written against them or their representation if reimbursement obligations are violated. An example of a violation would be if the employer does not pay the amount of money specified in the agreement with the employee. If there is a violation, the employer is subject to the procedures written in Section 1197.1 of the Labor Code for issuing, contesting, and enforcing judgments for any citations or civil penalties issued by the commissioner. Any amounts that are recovered due to this section are to be paid to the employee.

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