Employees are owed reimbursement for mileage, company cell phone bills, and other costs they incur in the service of their employers. But one reimbursement that often goes unnoticed is the right to recover legal expenses when an employee is named in a work-related lawsuit.
When Are California Employers Responsible for a Worker’s Legal Costs?
There are many situations in which an employee can be sued in the course of his or her employment. For instance, an employee could be named as an at-fault driver who caused an accident with a company car, but the employer would actually be liable for the damages. In these cases, state law recognizes the employer to be responsible for:
The accident or citation:
Section 2802 of the California Labor Code requires an employer to indemnify an employee against third-party legal action, essentially preventing the employee from taking the blame. However, companies can only be held liable for accidents that occurred “in the course and scope of employment.”
The employee’s attorney fees:
Employers are not required to provide an attorney to employees, but they must reimburse them for any expenses incurred in a work-related lawsuit. This includes all reasonable legal expenses such as court costs, filing fees, and even mileage to and from court appointments.
Paying for the settlement or damages:
If the employee is found guilty of the charges against him, the employer is responsible for paying the judgment against the employee. If a settlement is reached, California law requires the employer to pay the full amount of the settlement.
California Labor Laws consider the payment of legal defense funds as a reimbursement for employees, so workers cannot be made to waive their expense reimbursement rights. The law also allows employees to collect reimbursement for up to four years from the date that the expense was incurred. Finally, the law only extends to employees and not independent contractors, so workers should check their job classifications to make sure they are being compensated fairly and accurately. For more information on wage and hour violations, please use our website as your resource to California laws.
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What makes this all worthwhile - when employees receive their checks for unpaid wages!
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Disclaimer: Please understand these discussions and/or examples are not legal advice. All legal situations are different. This testimonial, endorsement and/or discussion does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter, your particular case/ situation and/or this particular case/ situation.