When are California Employees Entitled to a Work Expense Reimbursement?

Under California labor laws, your employer has to reimburse you for all work-required losses and expenses. If your employer has failed to reimburse you for work-related 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 expenses for California employees:

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Under the California Labor Code, an employer is required to reimburse an employee for all necessary expenditures or losses incurred directly related to the job.

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

1. What 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 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

Types of Reimbursement Expenses

The expenses available for reimbursement may depend on the worker's' job and employer. Some employees may have no work-related expenses subject to reimbursement. Others may have daily reimbursement expenses totaling thousands of dollars per year. Some common reimbursement expenses may include:

  • Travel expenses
  • Driving costs
  • Uniform costs
  • Entertainment costs
  • Internet service
  • Phone service
  • Training or education costs
  • Business center expenses
  • Conference and registration fees

There is not always a clear line between what is a mandatory reimbursed expense and what is not. Often this depends on whether the expense is a required cost of the job. Additionally, some jobs reimburse employees for certain expenses they are not required to provide as a job perk or benefit.

Travel Expenses

Many employees, including salespersons, executives, and administrators, are required to travel as part of their job. This may require a number of expenses that should be reimbursed by employers. Employers can put general restrictions on certain travel costs or expenses, as long as they compensate the employee for their reasonable business expenses.2

Travel expenses incurred on the job generally include those expenses related to getting the employee to the location, reasonable food and drink expenses, transportation costs, and business costs. However, the employer may not be required to reimburse an employee for side trips taken for personal reasons. Travel expenses may include:

  • Business office expenses (copy, fax, printing)
  • Business phone call expenses (cash, mobile phone, or hotel phone charges)
  • Conference registration fees
  • Currency conversion fees for foreign travel
  • Entertainment expenses for certain events or meals
  • Gas costs for rental vehicle
  • Internet access costs
  • Taxi or rail transportation
  • Dry cleaning costs for longer trips
  • Postage for sending materials
  • Parking fees and tolls
  • Rental car cost
  • Tips

Example: Susan flies back and forth across the country as part of her job opening up new retail locations. Susan is usually able to fly her preferred carrier, for which she has preferred status. However, prices have gone up and Susan's employer requires her to book a flight on a discount airline, which has 2 connections.

Susan instead decides to book a flight on her preferred carrier at three times the price because she deserves to be treated better since she travels so much for her job. Susan's employer may not be required to reimburse Susan for the more expensive flight because it was not a necessary and reasonable business expense required by her job.

Your employer's work policy may provide rules and guidance on what types of expenses are reimbursable. However, your employer is still required to reimburse the employee for all necessary expenditures directly related to the job. An employer cannot avoid their obligations under California labor law just because their company policy is different.

Example: Nick's boss, Cally, tells him there is a big opportunity for a potential new client and to get to Boise, Idaho by noon the next day for a meeting. The only ticket available for Nick to get to Boise by noon the next day was a full-fare business class ticket that cost $1,500. Nick flies out the next day and makes it to the meeting with the new client.

When Cally sees the reimbursement form she tells Nick that the flight was too expensive and she will have to cover part of the cost himself. Cally says the client meeting wasn't successful and there was no need to fly business class. However, Nick's employer may be required to reimburse him in full for the cost of the flight and travel expenses because the costs were incurred as a direct consequence of “his obedience to the directions of the employer.”

2. Will I be reimbursed if I combine personal and work-related travel?

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 his or her work duties.

Example: Bart has a conference to attend in Memphis on a Friday. Bart will also be meeting with a client in Memphis on the following Monday before flying home to California. Bart has always been a big music fan and is excited to use the weekend to visit Graceland in Memphis and the Grand Ole Opry in Nashville.

Bart submits his expense report for reimbursement of his travel expenses. Bart's employer says that he should only get half of the flight and hotel covered since he used half of the trip for a personal vacation. However, Bart should be compensated for all of his flight and hotel expenses because those costs were a direct consequence of the discharge of his duties.

Even if Bart spent the weekend doing personal activities, he had to stay in a hotel over the weekend in Tennessee because he had to work on Friday and Monday. However, Bart does not have to be reimbursed for the costs of visiting Graceland or the Grand Ole Opry. Additionally, he does not have to be reimbursed for the expenses related to driving three hours from Memphis to Nashville because going to Nashville was a personal side-trip.

Also see our article on vacation pay.

3. Does my employer have to reimburse me for use of my personal phone?

Cellphone

If your employer requires you to have a personal phone or requires you to make calls from your phone, your employer may have to reimburse you for the reasonable use of your personal phone.

Even if an employee does not incur any additional out-of-pocket expenses related to their work-related use, they may be eligible for reasonable reimbursement by their employer. An employer may be required to reimburse an employee as a reasonable percentage of the employee's phone bill.3

Example: Lucy gets a new job as a delivery driver for a packaging company. Lucy's employer tells her that company policy says she has to be available by phone during her shift. Lucy never gets a call during work but makes sure to leave her phone one while she is working.

Even if Lucy's employer never calls her during work, the company policy requires Lucy to be available by phone when she is making deliveries. Lucy is entitled to a reasonable reimbursement related to her business use of the phone as a direct consequence of her duties.

4. Do I have to pay for a work uniform or buy my store's clothes in California?

If your work requires you to buy specific clothing or a work uniform, your employer may be required to reimburse you for the cost of the uniform. If an employer requires the employee wear a uniform, the employer must pay the cost of the uniform. An employer may also be required to maintain the uniform or reimburse the employee for the cost of uniform maintenance4

Requiring regular clothing items may not be considered a “uniform.” An employer can require an employee to wear “black pants and a black shirt,” without having to reimburse the employee, even if the employee would otherwise have to buy a pair of black pants. An employer is also not required to pay for the maintenance of regular required clothing.

If an employee works at a retail clothing store, their employer may require them to wear clothing of the type or style that the store sells. This may not be considered a work expense if the employee could purchase such clothing at other retailers. However, if the employee requires the employee to purchase and wear only items sold in the store, the employer may have to reimburse the employee for the cost.

Example: Michael gets a job at a frozen banana stand. Michael's new job requires him to wear a uniform of a bright yellow shirt, yellow pants, and a yellow hat. Michael may be eligible for reimbursement of the cost of his uniform if it is considered a distinctive design or color.5

5. Can I file a lawsuit to be reimbursed for my work expenses?

If an employer fails to reimburse an employee for reasonable work-related expenses, the employee may be able to seek damages in court. An employee may be able to seek reimbursement of necessary expenditures, including interest at the same rate as judgments in civil actions.6

In addition to recovering paid-out expenses, an employee may be able to seek “necessary expenditures or losses” to include attorney's fees and court costs.7

The California Labor Commissioner's Office may also issue a citation against an employer for violating reimbursement obligations under the California Labor Code. Any amount recovered by the commissioner will be paid to the affected employee.8

In many cases, an employer may be in violation of California labor laws against multiple employees. Successful wage and hour class action lawsuits often involve unpaid reimbursement expenses or underpaid reimbursements.

6. Can my boss fire me for filing a work expense lawsuit?

In most cases, it is against California labor laws to retaliate against an employee for exercising their legal workers' rights.9

An employer cannot 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. Cochran v. Schwan's Home Services, Inc., B247160 (Aug. 12, 2014). (“If an employee is required to make work-related calls on a personal cell phone, then he or she is incurring an expense for the purposes of section 2802...To show liability under section 2802, an employee need only show that he or she was required to use a personal cell phone to make work-related calls, and he or she was not reimbursed.”)
  4. Labor Code 2802 LC, see endnote 1 above. See also Industrial Welfare Commission Orders, Section 9.
  5. Industrial Welfare Commission Orders, Section 9, endnote 4 above. (“(A) When uniforms are required by the employer to be worn by the employee as a condition of employment, such uniforms shall be provided and maintained by the employer. The term “uniform” includes wearing apparel and accessories of distinctive design or color.”)
  6. 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.”)
  7. 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.”)
  8. 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.”
  9. 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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