Plenty of jobs require you to buy things, and companies will often make you pay for things that the company needs. But that raises an important point: doesn’t the business have to reimburse you?
The answer is yes, and there are particular methods that are approved for doing so.
Section 2802
In 1937, California enacted section 2802 in the Labor Code in order to prevent employers from making employees pay the company’s business expenses. This section states that the employer shall ‘indemnify’ an employee for any expenses or losses that the employee has to take on because of the tasks involved in the job or that the boss orders the employee to take them. This rule states that the employer must repay the employee for their expenses even if the task that the employee is doing is illegal unless the employee knows at the time that it is illegal. The only restraint on the costs are that they have to be ‘reasonable’ and directly work-related.
This rule was updated in 2000, and it stays on the books pretty much unchanged. The Division of Labor Standards is supposed to enforce this rule.
Mileage
Most states don’t actually require the employer to reimburse an employee for mileage that they drove in the course of their duties unless not doing so means that the employee is making less than minimum wage. California is the exception. We do require mileage reimbursement of under Section 2802 of the California Labor Code. In 1985, the Labor Commissioner sent out an Interpretive Bulletin of the law stating that an employer that makes an employee use his or her own car in the course of has to reimburse the expense that are unavoidable in the execution of the job.
This was brought home and clarified by a lawsuit between a man named Frank Gattuso and a California company called Harte-Hanks Shopper. Harte-Hanks reimburses its sales staff with a combination of commissions on sales and a base salary. Even though part of their sales team has to drive to customers to make sales, the company doesn’t reimburse mileage. The Labor Commissioner’s Interpretive Bulletin had said merely that the employee must be reimbursed ‘necessary expenses’ and that, in the absence of a particular agreement between employer and employee, it can be any ‘reasonable amount.’ Harte-Hanks claimed that the commissions and base pay were enough to cover the expense involved.
The case went all the way to the Supreme Court, and it was ruled that an employer could reimburse the employee by 3 methods: they could have the employer and employee track every expense that the employee incurs while driving the car and reimburse the employee for that amount, the employer could pay the employee an amount based on the miles driven by the employee, or the employer could pay a predetermined car allowance in a lump sum. If the first 2 options are used, than the employer can use the IRS mileage rate to determine the amount that they owe the employee, or they can negotiate any rate that fully reimburses the employee.
Other Expenses
An employee that is required to keep a home office, then the employer could be liable for printing and office supplies. If you have to use your cell phone for work, your employer could have to reimburse some of that expense, too. Basically, anything you pay for during the ‘course and scope’ of your job.
Waivers Are Null And Void
These reimbursements are necessary. Section 2804 of the California Labor Code specifically prohibits any ‘contract or agreement, express or implied’ that waives the right to reimbursement.
Enforcement
You have the right to contest whether the reimbursement is reasonable, and you can report any employer that doesn’t follow the rules to the Division of Labor Standards Enforcement. The Division can levy penalties to repay you and issue a citation against an employer who is breaking the law. They will even charge interest.
Of course, you can also take the case to court, just like Frank Gattuso. The court can then have you reimburse you and issue a citation against your boss.
If you want to know more about what you can get reimbursement for, contact Aiman-Smith & Marcy. We’re a boutique company that specializes in employment law, as well as consumer fraud and class actions.
