When are California Employees Entitled to Travel Expense Reimbursement

Under California labor laws, you are entitled to travel expenses or losses that are directly related to your job. If your employer tries to shortchange you or fails to reimburse you for work-related travel expenses, you may be able to recover compensation by filing a lawsuit against your employer.

Below, our California wage and hour lawyers discuss the following frequently asked questions about lawsuits for unpaid travel expenses for California employees:

Also see our article on vacation pay.

Travelexpenses
Under California labor laws, you are entitled to travel expenses or losses that are directly related to your job.

If you have further questions after reading this article, we invite you to contact us at Shouse Law Group.

1. What travel expenses does my employer have to reimburse in California?

Under the California Labor Code, an employer is required to reimburse an employee for all necessary expenditures or losses incurred that are directly related to the job. This includes expenses as a “direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer.”1

Travel Expenses

Travel expenses for employees depend on the type of job, amount of travel, amount of time away from home, and the employer's travel expense policy. California labor laws require employers to reimburse employees for all losses and expenditures that are a direct consequence of an employee's work duties.2

Many workers are confused over employer reimbursement because there is are conflicting policies. California labor law provides a blanket explanation for reimbursable expenses. However, an employer's policy may provide a different description of what is available for reimbursement.

In addition, there are Internal Revenue Service (IRS) regulations on what types of business expenses are deductible and what might be considered income. However, the IRS regulations on travel expenses generally relate to tax liability and not related to what California employers are required to reimburse.3

Common Travel Expenses

Travel expenses subject to reimbursement generally include any work-related expenses incurred when the employee is away from the office. Common travel expenses may include:

  • Mileage expense
  • Car rental
  • Gas
  • Hotels and motels
  • Parking fees
  • Tolls
  • Postage
  • Taxi or cab fees
  • Bus/Metro/Subway fares
  • Business center expenses (copy, fax, printing)
  • Phone and internet access charges
  • Conference registration fees
  • Currency conversion fees for foreign travel
  • Postage for sending work materials
  • Tips

Employers may put specific limits on travel expenses, such as limiting air travel to economy class or requiring a maximum reimbursement subject to the lowest cost airfare. Employers may also require employees to book travel arrangements through a preferred travel agent or designated department.

Employers may also place maximum limits on certain travel, including maximum hotel rates and maximum meal reimbursements. However, they cannot require an employee to pay out-of-pocket for any costs above those limits if they are expenses paid in performance of the employee's duties. An employer may not violate California labor laws simply because they have a more restrictive company policy.4

Example: Barney has to travel from Los Angeles to San Francisco for a series of company meetings. Barney will stay in San Francisco for 3 nights before returning to Los Angeles. Barney's company has a per diem rate of $120 per night for hotels.

Barney cannot find any hotel or motel within 30 miles of the meeting location for under $120 per night. The cheapest hotel Barney found is in Oakland for $150 per night. Barney tells his boss the hotel is more expensive than the per diem rate and Barney's boss says Barney has to be at that meeting but he will not be compensated for more than the per diem rate.

Barney submits his travel expenses for $450 for three nights at the hotel. Barney would likely be eligible for full reimbursement of his hotel expenses because they were incurred in carrying out his job duties and at the direction of his employer. The employer's per diem would not override the company's legal obligations to reimburse the employee for reasonable work expenses.

However, just because an employee spends money during a work trip does not mean the expense is work-related. Personal entertainment, such as going out a movie or taking a friend out to dinner, is generally not work-related.

Example: Barney's per diem rate for meals is $60 per day for San Francisco. Barney submits his expense report for $350 for meals over three days because he took an old friend out to dinner at an exclusive sushi restaurant, which cost $250. Barney's employer may limit Barney to the maximum $180 per diem reimbursement for meals because taking a friend out to an expensive dinner is not a reasonable work-related expense.

Company Credit Card

Creditcard

Many employers provide certain employees with a credit card to use for work-related expenses. In general, these cards are billed to the company and the employee does not incur any expenses or losses when using the card. However, the employee is still entitled to a reimbursement for reasonable cash expenses and any travel expenses incurred on a personal credit card.

2. What if I combine personal travel with work-related travel?

Combining work-related travel with personal travel will depend on the employee's expense policy, federal tax law, and California labor law. In general, when an employee combines personal and work-related travel they are only required to be compensated for the travel expenses directly related to performing work duties.

Example: Martin works at an office in San Bernardino and has to go to a two-day trade show in Philadelphia. Martin is a military history buff and wants to add a trip to Gettysburg. Martin extends his 3 day and night hotel rental by one night and his car rental by one day to accommodate his side-trip.

In general, Martin should be reimbursed for his round-trip airfare, 3 nights hotel, 3 days worth of meals, 3 days of a car rental, gas used during those three days. However, Martin may have to pay out of pocket for his extra day's meals, hotel, gas, and car rental because his side trip to Gettysburg was not work-related.

3. Does my employer have to reimburse me for mileage in my own car?

If your employer requires you to drive as part of your job, your employer must reimburse you for work-related driving costs. This may include running occasional errands for your employer, or a traveling salesman who spends many hours every week driving around.

Commuting time and expenses of driving from your home to and from work are generally not included. However, if your employer asks you to run an errand on your way to work, that would be considered a work-related expense that should be reimbursed.

In most cases, an employer will reimburse an employee based on the IRS guidelines for standard mileage. In 2017, the standard mileage reimbursement for business-related driving is 53.5 cents per mile driven. This number is based on an annual study of the fixed and variable costs of operating a vehicle.5

The IRS standard reimbursement rate includes the cost of regular maintenance and repairs (such as oil changes and tire replacement).

However, an employer may also reimburse an employee for the employee's actual driving expenses. This method is usually more burdensome on the employee and the employer. Driving costs would generally include gas, repairs, insurance, depreciation, registration, and regular maintenance. The employee and employer would then have to determine what amount of costs were incurred for business use.6

Example: Daryl drives his 1991 Toyota Celica 30 miles each way to and from work every workday. One day a week, Daryl uses his personal car to drive 10 miles each way to pick up company reports from the printer, reimbursed at the standard mileage rate. Daryl's boss asks him to pick up coffee for everyone on the way into work. However, during this coffee run, Daryl's trusty car finally breaks down and he has to buy a new car.

Daryl's employer has to reimburse Daryl for his 20-mile weekly printer pick up trip as a work-related drive. Daryl's employer may also have to reimburse Daryl for the morning coffee drive as it was directed by his employer. However, Daryl's employer is generally not liable to pay for Daryl's car repairs or a new car. The costs of regular maintenance are rolled into the standard mileage reimbursement rate.

4. Can I file a lawsuit to get unpaid travel expenses reimbursed in California?

If an employer fails to reimburse an employee for reasonable work-related travel expenses, the employee may be able to file a lawsuit for compensation. An employee may be able to seek reimbursement of necessary expenditures, as required by California labor law.

Damages for unpaid work losses or expenses also include interest at the same rate as judgments in civil actions.7

In addition to recovering travel expenses, an employee may be able to seek “necessary expenditures or losses” related to claiming those expenses. In a court action, these necessary expenditures may include attorney's fees and court costs.8

When an employer violates the California Labor Code, the California Labor Commissioner's Office may also issue a citation against an employer. The commissioner may issue a citation with financial penalties against an employer for violating California's travel reimbursement obligations. Any amount recovered by the commissioner will be paid to the employee.9

In many cases, an employer may be in violation of California labor laws against multiple employees. A company's unlawful travel expense policy may leave many employees under-compensated. Successful travel reimbursement class action lawsuits often involve unpaid reimbursement for travel expenses or losses.

5. Can my boss fire me for filing a claim for travel expenses?

It is illegal for an employer to retaliate against an employee for exercising their rights under California labor laws.10

An employer shall not take retaliatory action, including termination, against an employee for citing wage and hour violations or filing an unpaid expense lawsuit. Firing an employee for filing a labor violation claim may be considered "wrongful termination".

If an employer retaliates against an employee for bringing a labor violation lawsuit, the employee may be able to seek damages for lost wages, including interest and reasonable attorney's fees. The employee may also be able to seek reinstatement to their job or other equitable relief.

Call us for help....

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For questions about California reimbursement regulations and labor laws or to discuss your case confidentially with one of our skilled California labor and employment attorneys, do not hesitate to contact us at Shouse Law Group.

We have local employment law offices in and around Los Angeles, San Diego, Orange County, Riverside, San Bernardino, Ventura, San Jose, Oakland, the San Francisco Bay area, and several nearby cities.


Legal References:

  1. Labor Code 2802 LC -- Obligations of Employer (“(a) An employer shall indemnify his or her employee for 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, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful.”)
  2. Same.
  3. See IRS Tax Topic 514 - Employee Business Expenses.
  4. Labor Code 2804 LC -- Obligations of Employer (“Any contract or agreement, express or implied, made by any employee to waive the benefits of this article or any part thereof, is null and void, and this article shall not deprive any employee or his personal representative of any right or remedy to which he is entitled under the laws of this State.”)
  5. See IRS 2017 Standard Mileage Rates for Business and Medical and Moving.
  6. Gattuso v. Harte Hanks Shoppers, Inc. 169 P.3d 889 (2007), (“The parties agree that one method an employer may use for automobile expense reimbursement is to calculate the automobile expenses that the employee actually and necessarily incurred and then to separately pay the employee that amount. This actual expense method is the most accurate, but it is also the most burdensome for both the employer and the employee. The actual expenses of using an employee's personal automobile for business purposes include fuel, maintenance, repairs, insurance, registration, and depreciation.")
  7. Labor Code 2802 LC, see endnote 1 above. (“(b) All awards made by a court or by the Division of Labor Standards Enforcement for reimbursement of necessary expenditures under this section shall carry interest at the same rate as judgments in civil actions. Interest shall accrue from the date on which the employee incurred the necessary expenditure or loss.”)
  8. Labor Code 2802 LC, see endnote 1 above. (“(c) For purposes of this section, the term “necessary expenditures or losses” shall include all reasonable costs, including, but not limited to, attorney's fees incurred by the employee enforcing the rights granted by this section.”)
  9. Labor Code 2802 LC, see endnote 1 above. (“(d) In addition to recovery of penalties under this section in a court action or proceedings pursuant to Section 98, the commissioner may issue a citation against an employer or other person acting on behalf of the employer who violates reimbursement obligations for an amount determined to be due to an employee under this section. The procedures for issuing, contesting, and enforcing judgments for citations or civil penalties issued by the commissioner shall be the same as those set forth in Section 1197.1. Amounts recovered pursuant to this section shall be paid to the affected employee.”
  10. Labor Code 98.6 LC -- Discharge or discrimination, retaliation, or adverse action against employee or applicant for conduct delineated in this chapter or because employee or applicant has filed complaint or claim, instituted or caused to be instituted any proceeding under or relating to his or her rights or testified relating to the same on behalf of that person or another.

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