California law requires employers to reimburse employees for all necessary work-related expenses. Courts broadly interpret this law to fully protect workers from being forced to cover their employers’ operating costs.

At a minimum, an expense reimbursement policy should specify that the company will repay its employees for all reasonable and necessary business-related expenses, such as:

• Purchase of office supplies, tools, or equipment;
• Travel, lodging, and meal expenses incurred on business trips; and
• The reasonable percentage of an employee’s personal cell phone and internet usage plans.

If an employer pays a standard or flat reimbursement rate for any expenses, the policy should instruct the employee how to request additional reimbursement if warranted.

An expense reimbursement policy should never absolve a company from reimbursing an employee who failed to obtain prior approval for payment of necessary job-related expenses.  A company can require pre-approval for foreseeable requests, but the consequence for violation should be possible disciplinary action rather than non-payment of the cost incurred.

Take-Away:

Implement and regularly review a comprehensive, clearly written handbook to include a business expense reimbursement policy.

We publish this series to educate employers on best practices for a well-written handbook that assists applicants, employees, and management alike. To purchase our template handbook – which contains the above policy and much more – and accompanying forms or for more information, please contact Office Manager Aimee Rosales at 626.583.6600 or email her at officemgr@tbowleslaw.com.

See also:

• Laying Down the Law – Workplace Policy Handbook & Forms for 2023 (November 18, 2022)
• Find Out What’s New in 2023 – Don’t Wait Save The Date. Friday, January 27, 2023, Friday, February 17, 2023 Annual Seminar for Employers Covering Employment Legal Essentials and New Workplace Laws (October 26, 2022)
• Handbook Helper Episode 13: Company Devices: Hands On, Hands Off- An Electronic Systems Policy (October 14, 2022)

Cindy Bamforth
December 2, 2022