EMPLOYEE ROAD TRIPS AND OTHER WORK RELATED EXPENSES « Law Offices of Timothy Bowles | Top Employment Law Firm in Los Angeles


California Businesses Must Reimburse for Employment-Related Use of Personal Vehicles, Phones and More

A California employer must reimburse the expenses its workers “necessarily” incur as part of their jobs (Labor Code Section 2802). On the other hand, a business generally has no such obligation for an employee’s costs that enables him or her to appear for work.

For example, a company is required to pay a worker for his/her use of a personal car for work-related purposes (travel to and from a business meeting) but not for commuting to or from the job. An employer would have to reimburse an employee for covering the expense of food and drink served at a scheduled, required staff meeting.  However, a business does not have to pay a worker for his/her grocery bill even though eating meals would likely enable that person to perform more efficiently on the job.

Of course, an employee’s cost of operating his or her car for job-related actions is not limited to the fuel required.  Insurance and maintenance are also included.  Yet, an attempt to fairly apportion each such item of operational expense could become an administrative nightmare.  California practice simplifies the process, recognizing that employers meet their obligations to reimburse business-related related use of a worker’s vehicle by paying the acceptable rate for the mileage thus traveled.  The published current federal IRS mileage rate is the commonly accepted measure.

As long as a company provides such mileage reimbursement, that company will normally not be considered responsible for an employee’s damage to or loss of his/her vehicle during that such business-related operations.  The worker is expected to carry the requisite insurance and to cover repair or replacement costs with the aid of such mileage reimbursement.

California Labor Code 2802 is not limited to reimbursement for vehicle use.  Employers must cover an employee’s “necessary” payment for business-related telephone and computer usage, internet connections, tools, office supplies, etc.  An employer may also be obligated to pay a fair allocation of an employee cost to maintain his/her living space if a portion of that home or apartment is dedicated exclusively to perform employment duties.

This means that a policy that absolves a company from reimbursing an employee who failed to obtain advance approval for his/her payment of a necessary job-related expense is unenforceable and unlawful.  A company can issue a policy requiring such  pre-approval where advance requests are foreseeable, but the consequence for violation should be possible disciplinary action rather than non-payment of the monies spent.

Employers who fail to reimburse for legitimate job-related expenses are subject to legal action, including payment of the worker’s attorney fees and costs incurred in collecting such monies. California Labor Code 2802(c).

What is “necessary” does not usually include what can fairly be considered extravagant.  Thus, employers can and should issue sensible policy and guidelines setting expense level standards, for example an acceptable range and maximum for repayment on hotel rooms, rental cars, etc.  A worker that chooses to exceed such reasonable limits would then be on notice that he/she will have to personally cover that excess.

It is also within a business’s prerogatives to require adequate documentation of claimed work-related expenses and to decline payment for unsupported reimbursement requests.  Obviously, such rules should be specified in written policy to limit the potential for later disagreements and successful legal claims.

An experienced employment law attorney can help draft the written guidelines that will properly balance a company’s required reimbursement when fairly due with the needed deterrence for irresponsible and excessive employee spending in the course of job performance.