California labor code 2802 mileage This legal requirement applies regardless of whether it's mentioned in your employee handbook or not. that even if government-mandated stay-at-home orders during the COVID-19 pandemic were an intervening cause of employees working from home and incurring necessary business expenses, the employer is still liable under California Labor Code Section 2802 to reimburse California's law on expense reimbursement is contained in Section 2802 of the California Labor Code. It does not specify what amounts are specifically necessary. A prime example is reimbursement for mileage for travel between different job locations in a single workday. This rule, embodied in California Labor Code California Mileage Reimbursement. California Labor Code Section 2802 obligates employers to reimburse their employees for all expenses incurred during the discharge of their duty. 02. California Mileage Reimbursement: So what is considered business mileage? Under California Labor Code 2802, the employer must reimburse their employees for vehicle expenses if they are required to use their personal vehicle for work-related activities. Alternatively, employers usually have policies and procedures that create deadlines, in order to request and receive reimbursement. About Us About Us that allowance may violate California’s labor code. So while normal commute California Assembly Bill 5 in combination with CA Labor Code 2802 could mean that your company must now reimburse contractors for their vehicle expenses. Those business expenses include anything you spend in the discharge of your job duties or to follow your employer’s 2802. California Labor Code Section 2802 clearly includes automobile expenses. California law, specifically the California Labor Code Section Mileage reimbursement in California is governed by both the Labor Code, Section 2802, and the California Code of Regulations, Title 8, Section 13700-13702. ) the employee incurs when being required to use a car for work. Under California Labor Code, Sec. Let's look at an example of an employee This rule, embodied in California Labor Code Section 2802, prohibits employers from shifting their costs of doing business onto the backs of employees. The IRS standard mileage rate is the most widely used method for reimbursement. If your organization pays a car allowance or mileage reimbursement, here’s how to ensure your compliance with state labor laws Reimbursements Required Under California Labor Code Section 2802. making it insufficient for some CA drivers. that require employers to reimburse employees for mileage and business related travel expenses. California Labor Code Section 2802 requires employers to reimburse employees for all reasonable and necessary work expenses: Section 2802. The California Court of Appeal held in Thai v. (a) An employer shall indemnify his or her employee for all necessary expenditures or losses International Business Machines Corp. Update: In November of 2021, voters passed Proposition 22, which exempted some workers from AB5. Labor Code Section 2802(a) Mileage Reimbursement in California: What’s Different? California Labor Code section 2802 requires reimbursement for mileage, office supplies, cell phone and other expenses an employee incurs in performing his or her duties for the employer. 02-1 : Farm labor contractor status: 1993. S. But very few employment attorneys have presented appellate courts with issues related to Labor Code, section 2802 and California Expense Reimbursement. This is because it insists that employers have fair mileage reimbursement policies. An expense indemnification law is designed to The exact guidelines regarding those reimbursements can be found in the California Labor Code Section 2802. Previous Next 2802. or even thousands of employees for vehicle mileage, cell phone or other expenses. The most common method for calculating this reimbursement is by using the IRS standard mileage rate, which provides a per-mile rate that factors in all these costs. LC 2802 requires employers to reimburse employees for all reasonable and necessary business expenses, such as using one’s personal vehicle for work purposes. Examples include work errands, business trips and travel between fields during the workday. Under Labor Code § 2802, employers must reimburse employees for all necessary expenses incurred in connection with employer-required travel. The law goes further by stating that if an employee has had to front these costs, they're also entitled to interest from the date each Under California Labor Code 2802, the employer must reimburse their employees for vehicle expenses if they are required to use their personal vehicle for work-related activities. Sheppard, Mullin, Richter & Hampton LLP November 29, 2005. Universal City, CA 91608-10973. The three key phrases found in Section 2802 are: Labor Code Section 2802. Under California Labor Code 2802, mileage is not the only reimbursable expense, but also cell phone, certain tools, home computer if used for work, and internet connection to the CA Labor Code 2802(a) | Car allowance, vehicle reimbursement, and mileage tracking blog for tips, news, and more. Employers will say a law is new when changing an illegal policy in the hopes that employees won't seek reimbursement for the past. About Us About Us See what drives us forward from our team to our values. This can range from delivery driving expenses (gas and wear-and-tear of a vehicle) to picking up an item for your business. Mileage Reimbursement in CA upvote . It states that employers must indemnify employees for all necessary expenditures or Employees have a powerful tool in California Labor Code Section 2802 to recover unpaid expenses incurred in the course of employment. California's mileage reimbursement law is also known as an expense indemnification law. 2007 Proposed DLSE Regulations on Mileage Reimbursement. Under California Labor Code 2802, employers are required to reimburse employees for necessary expenses incurred in executing their job duties for their employer. Self-auditing and calculating mileage and reimbursement in accordance with the California Labor Code 2802 should be easy. [Labor Code] §§ 2802 and 2804 California’s Labor Commissioner has found that the IRS mileage reimbursement rate is “reasonable” for purposes of complying with Labor Code Section 2802. ‍ ‍ According to the California Labor Code section 2802, employers should compensate employees for "all necessary expenditures or losses incurred by the See more California Labor Code section 2802 requires employers to reimburse their workers for business expenses. e. Companies of all sizes across a wide range of industries need Under California Labor Law, must employers reimburse employees for expenses incurred at work such as auto or mileage expenses? Yes. Royal Packing (2000) 22 Cal. California Labor Code section 2802 requires employers to reimburse employees, “for all necessary expenditures or losses incurred by the employee” when working. Easy but expensive: pay the IRS business mileage rate . California Labor Code Section Because California costs far exceed that average, it is likely that the IRS mileage rate will fall short as a vehicle reimbursement method when held to the high standards of CA Labor Code 2802. It accounts for average vehicle operating costs, including fuel, maintenance, and depreciation. (a) An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her 2023 California Code Labor Code - LAB DIVISION 3 - EMPLOYMENT RELATIONS CHAPTER 2 - Employer and Employee ARTICLE California’s Labor Commissioner has found that the IRS mileage reimbursement rate is “reasonable” for purposes of complying with Labor Code Section 2802. Interest shall Harte-Hanks Shoppers, Inc. (a) An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful. This is not new. 1. Before 2007, California Law was unclear on how employees had to be reimbursed for their expenses incurred in the required use of their own vehicles in connection with their work. A statutory duty generally has a three-year statute of limitations, [See CCP Sec. What about California labor code 2802? Reply reply MerlinWiz7 • Nothing in that code that states that the employer shall reimburse employees at the IRS Tax Deduction rate. Updated annually, the rate ensures straightforward compensation—set at 65. to reimbursement for work-accident insurance premiums. 335 through 349. The purpose of this statute is "to Cal. , 13 Cal. If an employer fails to reimburse for these The California Labor Law. The California Supreme Court addressed the issue of travel time in the case of Morillion v. Labor Code section 2802 also permits employer use of a lump-sum method to reimburse employees for work The California Court of Appeal held in Thai v. And a big example would be mileage reimbursement. Mileage expenses in a personal vehicle. Certain home office California Labor Code Section 2802 has landed businesses in costly lawsuits for not properly reimbursing their mobile employees for their business mileage. Necessary expenditures or losses include all reasonable costs. Cal. In addition, issues involving the right of the employee to Although we have held that 30 and 45 miles are excessive, distance and cost to and from work must be considered in light of the Based on California Labor Code 2802, your vehicle expenses incurred must be actually and necessarily incurred. Code § 2802(a). If you ask an employee to take a client out to lunch — you need to reimburse the employee for their mileage California: CA Labor Code Section 2802 indemnifies employees from any expenses incurred as part of their job responsibilities. Workplace Solutions California's Mileage Reimbursement Law. California mileage Labor Code section 2802 obligates an employer to indemnify its employee for the necessary expenditures or losses incurred as a direct consequence of the employee’s discharge of his or her duties, including the obligation to indemnify an employee who is sued by third parties for conduct that was within the course and scope of employment (i. California Labor Code § 2802: Employers’ Duty to Reimburse in 2021. California’s law is Labor Code section 2802. Some of the most common reimbursable expenses include: Vehicle expenses (e. During the pandemic when workplaces were closed and employees had to work from home due to Covid-19 restrictions, employers were required to either provide the equipment needed to work from home (such as internet access and a computer/phone), or to reimburse employees for those costs. This important statute reads as follows: An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the The expense reimbursement law can be found in California Labor Code Section 2802. Employers are legally required to pay employees back for “necessary” and “reasonable” costs accepted “in direct consequence of A: Under California Labor Code Section 2802, your employer must reimburse you for reasonable expenses incurred while performing your job duties, including mileage when using your personal vehicle for work purposes. These might include mileage for travel or buying hand tools necessary for work. IRS mileage rate). California’s approach to mileage reimbursement is unique. "So let's break that down further. Although, paying the IRS In this article, we will delve into California Labor Code Section 2802 and explore how businesses operating in California can ensure they accurately track mileage and reimburse their employees. Section 2802 of the California Labor Code mandates that employers reimburse employees for any expenses the employee incurs “in direct consequence of the discharge of his or her duties. California Labor Code section 2802 requires employers to reimburse employees for automobile costs (mileage, wear and tear, etc. California law requirements for mileage reimbursement. Tax-free like the IRS mileage rate, FAVR has the added benefit of neither under The most common reimbursements include: uniforms, mileage and other travel expenses. This includes costs like mileage, cell phone bills, and uniforms. 4th Labor Code § 2802. California Labor law requires that employees be reimbursed for their work related expenses, such as mileage, supplies, training, tools. Companies that don’t do so can incur fines and may be subject to other forms of legal action. 04. California Mileage Reimbursement. ‍ Labor Code 2802 LC, see endnote 1 above. The Copley Press, Inc. Labor Code Section 2802 California’s Labor Code, section 2802 has been on the books for decades. By implementing IRS-approved reimbursement programs, keeping accurate The California Labor Code Section 2802 requires employers to indemnify their workers for all expenses or losses incurred in direct consequence of the discharge of their work duties. ‍ California is one of three states in the U. 03 : Farm labor contractor license requirements: 2000. California Labor Code § 2802 (“Section 2802”) California has long held certain expenses, like cell phone bills and car mileage, as necessary and reasonable under certain circumstances. 5th 329 (2017)); and . those expenses should be compensated at the IRS mileage reimbursement rate and/or This guide will provide an overview of the key reimbursement rights under California employment law, as well as tips on how to protect yourself and ensure you receive the reimbursements you are entitled to. Lump-Sum Payment: Employer pays an agreed-upon Under this code, several types of expenses are subject to reimbursement: Mileage: Costs incurred when using personal vehicles for work-related activities, excluding commuting. mBurse-logo Created with Sketch. 11. ” Employers that fail to abide by the law can face legal consequences by the filing of a lawsuit. California Labor Code Section 2802. 2802. Learn four methods to reimburse your California employees for car-related expenses -- plus a bonus tax-free method. [Labor Code] §§ 2802 and 2804 Section 2802 of the California Labor Code requires employers to reimburse their employees for the reasonable and "necessary" expenses they incur in direct consequence of discharging their job duties. This includes using their personal vehicles for business purposes. CA Labor Code, Section 2802(a), requires full coverage of Continue Reading . 05 : Expenses: Reimbursement, purchase of excess auto insurance (Labor Code § 2802) 2003. Labor Code Section 2802 mandates that you reimburse your employees for all expenses or losses incurred as a direct consequence of discharging their job duties. Employees who In California, Labor Code 2802 requires employers to reimburse California employees for "all necessary business expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties. the US are at risk of lawsuits, California employers face especially high risk due to California Labor Code section 2802 (CA-2802) – a particularly strict labor law which requires employers to reimburse employees for all necessary business expenses incurred in the course of business. Travel Expenses: Including airfare, Under California Labor Code, Sec. The most important factor is the miles driven by an employee. 19-3 Under section 2804, however, any agreement made by the employee is null and void insofar as it waives the employee’s rights to full expense reimbursement under [Labor Code] section 2802. The most common examples are mileage, travel, and dining expenses While there's no federal mandate for mileage reimbursement, certain states, including Illinois and Massachusetts, and as defined in California Labor Code 2802, require employers to cover these business-related vehicle expenses. App. (a) An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or California Employment law requires employers to reimburse employees for all “necessary” expenses they incur while performing their jobs. This includes all expenses related to the business use of a personal vehicle. What Every California Employee Should Know about Work-Related Expense Reimbursement. Companies of all sizes across a wide range Comply with CA labor code 2802. However, California law does require that employees be able to determine what amount is for labor provided and what amount is for expense reimbursement. Yes, if you use your personal vehicle for work That’s the sum and substance of California Labor Code section 2802. typically at the IRS’ Key provisions of labor code section 2802. ” Reimbursement of any expenses an employee incurs while following his or her employer’s California labor laws can be tricky, what is mileage reimbursement, and why do you need to know? As per California’s Labor Code Section 2802, employers must reimburse their staff for all reasonable expenses that incur while on duty. This statute requires employers to reimburse employees for all expenditures necessarily incurred by the employee in direct discharge of duties for the employer, or in obedience to directions of the employer. 2802, employers are legally required to reimburse employees for any ‘reasonable and necessary expenditures’ incurred in relation to their employment. California Labor Code section 2802 requires California Labor Code 2802(a) LAB, which makes employers reimburse you for all necessary expenses or losses incurred in direct consequence of the discharge of your duties, or your obedience to the Mileage Reimbursement: Employee keeps a mileage log, employer reimburses uses a cents-per-mile rate (e. You ask whether Labor Code § 2802 requires your client Section 2802 of the California Labor Code requires employers to reimburse 100% of all “necessary” expenses employees incur in performing their jobs. that even if government-mandated stay-at-home orders during the COVID-19 pandemic were an intervening cause of employees working from home and incurring necessary business expenses, the employer is still liable under California Labor Code Section 2802 to reimburse Read this complete California Code, Labor Code - LAB § 2802 on Westlaw FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. 3. This includes mileage expenses, All awards made by a court or by the Division of Labor Standards Enforcement for reimbursement of necessary expenditures under this section shall carry interest at the same rate as judgments in civil actions. The code states that the penalty for not reimbursing an employee includes: Costs incurred in obtaining reimbursement; Liability for expenses, plus interest; Attorney fees Many California employees incur various business-related expenses while on-the-job. The IRS rate as a mileage reimbursement will California Labor Code Section 2802 is the key statute addressing an employer’s obligation to reimburse an employee for necessary expenses. Employers should always remember to reimburse employees when appropriate. (Estrada v. California Labor Code § 2802. In addition to standard mileage rates, additional vehicle-related expenses incurred may fall under the umbrella of California is one of three states in the US that requires companies to reimburse their employee’s mileage. On July 11, 2023, the California Court of Appeal addressed the issue of remote working during the COVID-19 pandemic and ruled that the government-mandated shutdown did not create an exception to Labor Code Section 2802: remote workers must be reimbursed for the necessary expenses they incur in order to perform their work duties, regardless of Under California law, specifically Labor Code Section 2802, an employee must receive expense reimbursements for work-related expenses. ”) Labor Code 2802 LC, see endnote 1 above. Becker: Chief Counsel, Miles E. and equipment and even legal expenses. LC 2802 requires employers to reimburse employees for all reasonable and necessary business expenses, such as using a personal vehicle for work purposes. Under the California Labor Code § 2802, IRS Standard Mileage Rate. These types of situations Mileage reimbursement in California is governed by California Labor Code Section 2802. Under California Labor Code section 2802, employers are obligated to indemnify employees for all expenses incurred in the course and scope of their employment. that even if government-mandated stay-at-home orders during the COVID-19 pandemic were an intervening cause of employees working from home and incurring necessary business expenses, the employer is still liable under California Labor Code Section 2802 to reimburse the employees for those expenses. 1 California has seen several reimbursement-related lawsuits California mileage reimbursements are governed by strict laws. 1, effective Jan. CA Labor Code § 2802 (2021) Learn more This media-neutral citation is based on the American Association of Law Libraries Universal Citation Guide and is not necessarily the official citation. California's labor laws explicitly require that employers reimburse employees for expenses incurred during their work duties. This reimbursement requirement may apply to the use of the employee’s personal vehicle for work purposes, such as driving between work sites. This does not include commuting What is the California law on mileage reimbursement? Under California Labor Code 2802, the employer must reimburse their employees This requirement comes from Section 2802 of the California Labor Code, which ensures that employees are not forced to pay out-of-pocket for work-related expenses. 1, 2021, requires general acute care hospitals to reimburse applicants for employment or employees providing California Court Of Appeal Upholds Mileage Reimbursement In The Form Of Increased Base Salary And Commissions. That means if your business operates in California, you are required to pay employees for work-related expenses. RE: Labor Code §2802 - Requiring Employees to Purchase Excess Automobile Insurance Dear Mr. Providing a personal vehicle (“mileage expense” or “mileage reimbursement While enforcement of California Labor Code 2802 may take place at the California Labor Board, mileage laws can be complex and may best be handled by a qualified California labor laws attorney. A lot of organizations take the simplest, least risky route of all the risky routes: pay the IRS mileage rate 2802. Please verify the status of the code you are researching with the state legislature or via Westlaw before relying on it for your legal needs. paying any judgments and attorneys’ California Labor Code Section 2802 states an employer shall indemnify his/her employee for all necessary expenditures or losses incurred by the employee in the direct consequence of the discharge of his/her duties. Conference or training costs. This Frequently Asked Questions about California Labor Code 2802 What is Section 2802 of the California Labor Code? Section 2802 of the California Labor Code mandates that employers reimburse employees for all necessary expenditures or losses incurred while performing their job duties. If a California employer requires an employee to drive on official company business, it must either provide the employee with a vehicle, for which all expenses are California Labor law requires that employees be reimbursed for their work related expenses, such as mileage, supplies, training, tools. The legislative intent behind this law is to prevent employers from pushing off costs of doing business over onto employees. Use our guide to learn the best method to comply with CA Labor Code 2802(a). International Business Machines Corp. CA Labor Code 2802 (a) Self Audit. Complying with California Labor Code Section 2802 is crucial for employers when providing vehicle reimbursements to their employees. Why mBurse Our consultative approach results in the California Labor Code Section 2802(a) to a mileage reimbursement, even if the employer says it pays a higher salary to cover that expense (Espejo v. What constitutes “necessary and reasonable” will depend on multiple factors, including the employee’s job responsibilities (on paper and in California Labor Code § 2802 does not specify the manner in which employers must reimburse their employees for the necessary expenses incurred while doing their job. Lab. (“(c) For purposes of this section, the term “necessary expenditures or losses” shall include all reasonable costs, including, but not limited to, attorney’s fees incurred by the employee enforcing the rights granted by this section. For example The California Labor Code provides that “[a]n employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer[. Let mBurse help you! mBurse-logo Created with Sketch. g. 5] while the recovery of a penalty In California, Labor Code §2802 gives employees the right to recover any costs they've incurred while performing job duties. Costs of work uniforms. Section 2802 is one of the most frequently violated California employment laws. Case law interpreting Cal. California Labor Code section 2802(a) states: “An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions Doesn't the IRS mileage rate comply with CA Labor Code 2802(a)? Whether reimbursing with the IRS standard rate complies with the California labor code depends on a number of factors. Locker, has asked me to respond to your letter dated July 13, 1998, regarding the above referenced matter. ]” Cal. 5 cents per mile for Expenses: Reimbursement for cost of insurance required by employer are recoverable (Labor Code § 2802) 1998. Rules in California for Mileage Reimbursement. , the California Supreme Court clarified the parameters of mileage reimbursement under California law, as well as the three different methods available for employers to reimburse employees for their Labor Code § 2802 is a California law that requires employers to reimburse workers for “all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties. 0 Comments Topics: CA Labor Code 2802(a) The California Labor Code 2802(a) Under California Labor Code Section 2802, Labor Code Section 2802. California Labor Code Section 2802: Employers often use the California labor code standard mileage rate, which is set by the Internal California Labor Code section 2802 (“Section 2802”) requires employers to reimburse employees for “all necessary expenditures or losses” they incur as a economy, business & career A Glimmer of Hope for Employers Defending A growing number of states have labor codes that indemnify employees from work-related expenses. Gattuso, at 479. Labor Code 2802 — Obligations of Employer (“(a) An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the I know that CA Labor Code 2802 does allow an employer to pay less than the IRS suggested rate, but they have to prove that the employee's vehicle costs are less than the established IRS rate which is a strenuous task. Towing or emergency vehicle services costs for company-owned vehicles. LAB Code § 2802 - 2802. California Labor Code Section 2802 is the primary law governing employee reimbursement in the state. mileage, maintenance, Section 2802 of California's labor code grants employees the right to sue for the recovery of income lost to unreimbursed business expenses, plus legal fees, plus 10% extra. 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