California Expense Reimbursement

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Quick Summary

California employees must be reimbursed for their employment related expenses.

Law Review and Frequently Asked Questions

An Employee Cannot Agree to Waive the Right to be Reimbursed

Labor Code 2804 precludes any contract or agreement by which any employee agrees to waive the right to be reimbursed for all of their expenses.

When Must Expenses be Paid?

The California Labor Code does not require that owed expenses be paid immediately upon termination, as is the situation for owed wages. Owed expenses for terminated employees should be paid on reasonable time-schedule, which typically is when the expenses would be paid if the employment relationship had continued, such as the next pay day.

Sexual Misconduct is Outside Scope of Employment

Sexual misconduct falls outside the course and scope of employment. (Lisa M. v. Henry Mayo Newhall Memorial Hospital (1995) 12 Cal.4th 291 [hospital not liable for sexual battery on patient by technician]; Jeffrey E. v. Central Baptist Church (1988) 197 Cal.App.3d 718 [church not liable for child molesting by Sunday school teacher]; Alma W. v. Oakland Unified School Dist., supra, 123 Cal.App.3d 133, 140-142 [school district not liable for rape of student by janitor].) In line with that authority, the California Supreme Court has held that an employer has no obligation to indemnify a sexual harasser, even though the acts occurred during work hours on the employer's premises. (Farmers Ins. Group, supra, 11 Cal.4th 992)

Hand Tools and Equipment

IWC Orders allow an employer to require that employees furnish "hand tools and equipment" if the hand tools and equipment are "customarily required by the trade or craft". The term "hand tools and equipment" is to be read narrowly and is limited to "hand (as opposed to power) tools and personal equipment, such as tool belts or tool boxes, that are needed by the employee to secure those hand tools. Moreover, such hand tools and equipment must be customarily required in a recognized trade or craft."

Attorney's Fees are Recoverable to Enforce the Employee's Rights

Labor Code 2802(c) requires the employer to pay the employee's attorney's fees incurred in enforcing the right to be reimbursed for expenses.

More Information is Available with a Premium Subscription

  • The tests and analysis as to when an employee's expenses must be reimbursed

  • Text of California's statutes

  • Opinion Letters from the Department of Labor Standards Enforcement

  • When an employer must pay for an employee to have a bank account

  • When an employer must pay for an employee's insurance

  • When an employer must pay for an employee's training or to become licensed

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