CA Companies Failing to Reimburse employees for Business Expenses; a Trend on the Rise

by Norman B. Blumenthal on September 9, 2013

According to Section 2802 of the California Labor Code, employers are obligated to reimburse their employees for all applicable “expenditures or losses incurred… in direct consequence… of his or her obedience to the directions of the employer." This includes but is not limited to the following examples:

  • Fuel, mileage & other expenses for required travel for meeting attendance;
  • Fuel, mileage & other expenses for required travel to move inventory;
  • Fuel, mileage & other expenses for staffing support;
  • Buying supplies to complete job duties or for store events; and
  • Purchasing and maintaining uniforms or other required clothing items.

Employee in Labor Class ActionOver the past decade, employment and labor class action lawsuits have increased with regards to these topics; however, there are still thousands of employees in California failing to report them as well. Not only does the California Labor Code clearly state employees must be reimbursed for these lost wages, but it also states that all past expenses must be returned with interest. Furthermore, Section 2802 clarifies that any reasonable attorney’s fees or costs sustained by the employee in order to properly impose these rights must also be paid by the employer.

With regards to mileage, the IRS has set a standard reimbursement rate of 56.5 cents per mile, effective January 1, 2013. Although the employer is entitled to pay a rate lower than what is suggested by the IRS, all actual expenses incurred by the employee while traveling must be covered. Therefore, the employer will be in violation of the California Labor Code if the employee can prove it is an insufficient reimbursement rate.

Here are some common class action lawsuits currently taking place across the country for similar offenses:

  • Pizza delivery employees failing to receive compensation for mileage and fuel costs;
  • Field engineers demanding reimbursement for required tools;
  • Bankers facing punishment for refusing to purchase required office supplies on their own dime; and
  • Baristas bearing the brunt of costs of purchasing and maintaining their expensive uniforms.

Employers go to great lengths to save a buck, often at the expense of their most undervalued employees. Fortunately, the California Labor Law Attorneys at Blumenthal, Nordrehaug & Bhowmik are working hard to get these employees what they deserve.

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