California Labor Code section 2802 requires employers to reimburse their workers for business expenses. Those business expenses include anything you spend in the discharge of your job duties or to follow your employer’s instructions. If you are not reimbursed for these expenses then you can recover them, as well as attorneys’ fees, in a wage and hour lawsuit.
Business expenses under Labor Code 2802
California Labor Code 2802 defines “business expenses” very broadly. According to the statute, business expenses are:
“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.”[1]
The only exception is when those duties or directions are unlawful, and you believe them to be unlawful.
Some common examples of reimbursable business expenses are:
- gas and depreciation expenses for your car, when it is used for work,
- work-related office supplies,
- lodging and food during a business trip, and
- the costs of setting up an office for remote work.
The Court of Appeals of California has ruled that home office expenses must be reimbursed, even if remote work was only because of a government order, such as the work from home order during the pandemic.[2] Some examples of those expenses related to a home office include:
- internet access,
- personal cell phone bills,
- a phone headset, and
- a computer and its accessories.[3]
Under California’s labor law, your employer must reimburse you for these employee expenses when they are work-related.
Mileage reimbursement
A common business expense that your employer has to reimburse you for is your travel. If you travel on business trips or drive your personal vehicle for business purposes, you are entitled to reimbursement under California law.
This reimbursement policy is especially important for outside sales employees who do not receive an employer-provided vehicle.
When you drive your personal vehicle for business-related travel, there are 4 ways to calculate what you are owed:
- lump-sum payments or a travel stipend,
- actual mileage,
- actual expenses, or
- a mix of fixed and variable rates.
However, the employment lawyers at our law firm have found that many California employers use the reimbursement rate provided by the Internal Revenue Service (IRS). This rate is based on your actual mileage. Under this rate, you are entitled to the following amounts in 2024:[4]
| Purpose of travel | IRS reimbursement rate |
| Business | $0.67 per mile |
| Active-duty military members traveling for medical or moving purposes | $0.21 per mile |
| In the service of a charitable organization | $0.14 per mile |
This rate is based on an annual study of the costs of operating a vehicle.[5]
Calculating the actual expenses is relatively rare because of how burdensome it is. This involves determining exactly what your actual costs were and what percentage of your travel was for business use. According to the California Supreme Court, the resulting reimbursement goes beyond just the costs of gas. It also covers your:
- vehicle maintenance,
- car insurance,
- depreciation, and
- [6]
The mileage reimbursement is not the only work-related expense that you are entitled to receive while traveling. You are also entitled to reimbursement for the reasonable costs of the following necessary expenses:
- your travel time,
- renting a car,
- fares for public transit,
- fares for a taxi or a ridesharing car,
- tolls,
- parking fees,
- meals, including tips, and
- staying in a hotel or motel.
Combined business and personal travel
Some trips have both personal and business elements to them. If you combine personal and work-related travel, then you are only entitled to compensation for the travel expenses that are directly related to the business aspects of the trip.
In some cases, this can be easy to determine.
For example: Jess is sent to Chicago for a 2-day business conference. Because she has family in the area, she takes a day of vacation time to visit them. If she extends her car rental by a day to visit her family, she will have to pay for that extra day.
In other cases, this can be difficult to determine what is business travel and what is personal travel.
For example: Josh, a traveling sales representative, uses his personal vehicle to visit customers. On his way to one of them, he takes a 20-minute detour to watch his son play in a baseball game.
How to recover unpaid reimbursement
If your employer is not reimbursing you for business expenses, you can file a wage and hour claim. This can recover:
- the unpaid reimbursements,
- interest on those reimbursements,
- court costs, and
- attorneys’ fees.
If your employer retaliates against you for filing this lawsuit, you can file a lawsuit for wrongful termination.
Our employment law attorneys have found that, in many cases, California employees who are not getting reimbursed for business expenses often have coworkers who are not getting reimbursed either. Employers rarely violate their expense reimbursement obligations to just one worker. If there are enough aggrieved employees, you can file a class action.
Legal Citations:
[1] California Labor Code section 2802 LAB.
[2] Thai v. International Business Machines Corp., 93 Cal. App. 5th 364 (2023).
[3] Same.
[4] Internal Revenue Service, “IRS issues standard mileage rates for 2024; mileage rate increases to 67 cents a mile, up 1.5 cents from 2023,” (Dec. 14, 2023).
[5] Same.
[6] Gattuso v. Harte Hanks Shoppers, Inc., 42 Cal.4th 554 (2007),
