It is essential for managers and business owners operating in California to be aware of California Labor Code Section 2802. Like any other legislation, it may not make sense at first. However, you may ask, What does it mean? Don’t worry—we’ve got you covered!
We thoroughly examined California Labor Code 2802 and mileage reimbursement to provide you with the necessary information to maintain compliance and treat your teams with dignity. Furthermore, we did it in common, intelligible language, so everything is clear.
California Labor Code Section 2802: What Does it Mean?
The law requiring employers to repay employees for “all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties” is California Labor Code Section 2802. Failure to comply may result in a wage and hour lawsuit against the employer.
The provision permits workers to get recompense in addition to attorneys’ costs.
A class action lawsuit may be filed by employees if the infraction is prevalent.
Do Employers in California Have to Pay Back Employees’ Business Expenses?
Yes, employers are required to compensate their employees for expenses linked to their jobs under California Labor Code Section 2802.
However, this section’s goal is to stop California employers from just passing along the costs of operating a firm to their staff.
Employers can’t persuade workers to give up their claim to these compensations. Even if the employment contract contains a clause informing workers that they have no claim to compensation, it is unlawful and cannot be upheld in court.
Employers may be held accountable for wrongful termination if they terminate employees due to their assertion of entitlement to reimbursement.
However, other states are not subject to these rules. According to federal employment law, employees are not required to reimburse their work-related expenses unless doing so would cause their wages to fall below the minimum wage.
What Kind of Reimbursement Is Required Under Labor Code 2802?
According to California Labor Code 2802, an expense must be both reasonable and required for the employee to perform their work to be eligible for reimbursement. The employee bears the financial burden directly related to the performance of their job tasks.
Whether an expense qualifies for reimbursement as work-related depends on the specifics and demands of the employee’s job. Also, the costs that qualify for reimbursement are outlined in many organizations’ policies.
Typical Work-Related Costs That Qualify for Reimbursement Include:
The following expenses can be incurred:
- Travel costs
- Using a private cell phone for work-related calls
- Conference fees, work uniform costs
- Costs associated with entertaining business associates
- Driving costs (which include tolls and mileage reimbursement for personal vehicle use)
- Postage, training, or education costs.
Some of these costs—such as the cell phone bills for an employee’s phone that is regularly used for work—are frequently only loosely connected to their jobs. Also, a portion of the employee’s real costs may be reimbursed in certain circumstances. Furthermore, the percentage must fairly represent the frequency with which the expense is associated with work.
What Are California’s Requirements for Mileage Reimbursement?
It’s time to examine what else qualifies as work-related mileage now that we have defined the most typical business-related mileage.
We’ve included a list of some of the most common types of travel that qualify for reimbursement to help you get a better idea:
- Trips and meetings with customers and clients.
- Visits to a temporary work location,
- Delivering services from home (e.g., home healthcare)
- Purchasing office supplies.
- Travels by car to the bank to conduct business.
How Does Labor Code 2802 Calculate Employee Reimbursement?
Four methods are authorized for you to compensate an employee for car expenditures they have incurred while working if your firm is located inside the state of California. In the case of Gattuso v. Harte-Hanks Shoppers, the California Supreme Court determined that they were compliant with Labor Code 2802.
The four methods for paying back car expenses are as follows:
- Pay for business travel expenses
- Pay back the true costs.
- One-time payments in full
- FAVR stands for fixed and variable rate payback.
FAQs
Does California Require Reimbursement for Cell Phones?
Labor Code 2802 in California mandates that employers pay employees back for all reasonable costs incurred while they perform their jobs. This includes reimbursing employees for any business-required use of their cell phones.
What Is Pa Labor Code Section 2802?
Employers are required by Labor Code Section 2802 to Pay employees for using their cell Phones for work-related calls. Extended Response with Exercise Suggestions: When an employee uses their cell phone for work-related purposes, their employer is required to reimburse them for such use.
Can a California Employer Refuse to Pay Back Reimbursement for Expenses?
The law requiring employers to repay employees for “all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties” is California Labor Code Section 2802. Failure to comply may result in a wage and hour lawsuit against the employer.
Final Thoughts
California has one of the strongest restrictions on automobile reimbursement in the U.S. After reading the article in its entirety, you should understand that you must fairly reimburse your staff for any necessary and reasonable expenses they have incurred when using their cars for work-related travel.
Multiple computations meet CA Labor Code 2802 and current mileage reimbursement laws, however that portion is non-negotiable. The most crucial thing to remember when choosing a technique is to make sure you’re not underpaying your staff, particularly in light of the current fluctuations in gas (and other vehicle-related) prices.
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