There are so many different policies on the federal and state level regarding Employee Expense reimbursement, some of which appear to conflict. While the California labor law provides guidelines on what is reimbursable, there is also the Internal Revenue Service (IRS) regulations that state what types of business expenses are deductible and are not related to what California employers are required to reimburse. This volume of information can all be very confusing.
Travel Expenses
Depending on the type of business you work for, there is an endless list of work-related expenses that you can incur if you travel for your job that can be categorized as travel expenses as well as other expenses that qualify for reimbursement.
Below is a partial list of the most common reimbursable travel-related expenses:
- Airfare
- Bus/Metro/Subway fares
- Business center expenses (copy, fax, printing)
- Car rental
- Conference registration fees
- Currency conversion fees for foreign travel
- Gas
- Hotel accommodations
- Meals
- Mileage expense
- Parking fees
- Phone and internet access charges
- Postage
- Taxi, Uber fees
- Tips
- Tolls
Other reimbursable expenses can include:
- Car Washes
- Cell Phones
- Personal Protective Gear
- Printing supplies
- Oil Changes
- Storage Unit rental
- and so much more…
While many employers reimburse expenses, they may also specify limits and restrictions, such as:
- You must travel economy class or the lowest cost airfare,
- travel arrangements may need to be booked through a designated travel agent,
- maximum hotel rates could be imposed,
- maximum meal reimbursements or per diem expense limits may also be imposed.
California labor laws trump employer policies—employers cannot require an employee to pay out-of-pocket for any costs incurred while performing their jobs. Typically, an employee is expected to submit an expense report itemizing their expenses; this validates the employees’ claims. In return, employers must issue reimbursements promptly- 30 days is a typical wait time.
Working from Home
Employees who work from home offices also incur reimbursable expenses–if the employee is performing work for the company, it is the company’s responsibility to reimburse all such costs.
Working from home may require employees to have a phone line, cell phone, printer, computer, and internet; these expenses should be reimbursed by the employer if used for work purposes only.
Employers Refusing to Issue Reimbursements
Occasionally, employers refuse to reimburse for expenses incurred by an employee while performing their job. You must understand what qualifies as a work expense and what your employer should be reimbursing.
Mileage Reimbursement
Reimbursement for miles driven with your vehicles on company business is a widespread practice. There are no laws mandating employers to offer mileage reimbursement.Many companies do—it is an excellent incentive and helps attract and retain employees.
If your company reimburses mileage at the standard Internal Revenue Service rate, it is not considered income, so it is not subject to tax. Claims must be confirmed by employee records that prove the time, place, and purpose of the travel. Check with your tax accountant for any tax repercussions and the best practice to report your mileage expense. The IRS’s standard rate can be found here.
Like many other aspects of employment, companies can and should establish guidelines on mileage reimbursement requirements and rates. Accurate documentation comes from a process that builds in safeguards, encourages questions, and includes a monitoring system that will uncover abuse. The documentation associated with mileage reimbursement is vital for both you and your employer.
If your claim does not adhere to those guidelines, your reimbursement may be denied.
Just as you are required to adhere to your company’s policies and regulations when submitting a reimbursement claim, your employer is equally responsible for treating you fairly and compensating you promptly for business-related expenses.
If you are experiencing problems getting your employer to reimburse you for legitimate expenses and you have attempted to resolve them without results, it’s time to contact the skilled attorneys at Aiman-Smith & Marcy. We specialize in employment law and have successfully litigated hundreds of such cases—our combined experience advising and litigating on behalf of employees on a wide range of complex matters will get you the best outcome.
For a free consultation, call us today and let Aiman-Smith & Marcy help you get what is rightfully yours.