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What is California Wage law on Business Expenses Reimbursement for cell phones, computers, mileage, uniforms, tools, etc.?

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What is California law on Business Expenses Reimbursement for cell phones, computers, mileage?


Under California law, you must be reimbursed for all of your reasonable business expenses. Under California Labor Code section 2802, your employer must indemnify you for expenses you necessarily incur in the discharge of your duties. Gattuso v. Harte-Hanks Shoppers, Inc. 42 Cal. 4th 554, 555 (2007).
 
If your employer hasn't reimbursed you for all of your business expenses (read: cell phone, home computer, uniforms, car expenses, etc.) you could be owed of money under California law. 
 
This section discusses when your employer must reimburse you for your business expenses.  Because many of the recent cases for business reimbursement concern cell phones, I address cell phones first.


In this article, our California wage attorneys answer the following questions and more:

Under California wage law, is my employer supposed to reimburse me for my cell phone? 
 
What are California personal cell phone reimbursement laws?

What if I have an unlimited data plan - can I still get reimbursed for my cell phone for work? 

What if I have an unlimited data plan - can I still get reimbursed for my personal cell phone for work? 

What is the "company knew or should have known" requirement? 
 
Am I supposed to be reimbursed by work if I have to use my cell phone for GPS ... maps and finding locations?

How much cell phone reimbursement am I entitled to under California wage law?

But, what if I have an unlimited data or use plan?

What is California law for me being reimbursed for using my car for work? 

What is the "mileage reimbursement" method? 
 
IRS method for car reimbursement under California law

What is the actual expense method for calculating mileage? 

What is the lump sum payment rate for calculating mileage? 

What if my employer provides a vehicle? 
 
Do I have to be reimbursed by the company for gas, repairs, tires, insurance, etc.? 

What if the company doesn't reimburse me for business expenses? 

What can I collect under California Law? 

What is the law for business reimbursement for cell phones for salary and commission employees, under California law? 

Am I supposed to be reimbursed under California wage law if I have to use a computer at my house? 

Am I supposed to be reimbursed under California wage law if I have to use a computer at my house? 

What is California wage law for commissioned salespeople for the reimbursement of business expenses?

If the company charges me for breakage and shortages - is this legal under California law? 

What happens if my employer fails to reimburse me for business expenses?

Do I have to be reimbursed for uniforms under California wage law?
 
Uniforms and 2802

Am I supposed to be reimbursed for maintaining my uniform under California law? 

What if my employer “suggests” that I need to wear clothes from the company store when I work?

A Reported Case Study - Abercrombie & Fitch Co.

What do I have to prove for me to win my business reimbursement case? 

What do you have to prove in order to win your 2802 failure to reimburse claim?

Another court has held that there is no “notice” requirement

Do I have to ask the company to reimburse me for my business expense in order for it to be owed to me?
 
Mechanics and tools: Do I have to be paid at least twice the minimum wage?

The company wants me to "waive" my business expense claim... is this legal under California wage and hour law?

What is the time limit (statute of limitations) for bringing a business reimbursement claim - cell phone, computer, uniform, mileage claim - in California? 

If I am owed my for business expenses - cell phone, uniforms, mileage, home computer, etc. - what should I do?

 

Why is Bill Turley asked to testify concerning wage law legislation at the California State Senate

 and the California Assembly? 

What is the law for business reimbursement for cell phones, home computer use, uniforms, mileage and the like?  California Wage Lawyer - Bill Turley

A No B.S. straight-shooter lawyer

Believe it or not, Bill is known for being a no B.S. straight-up lawyer. Besides being known as one of the leading experts on this area of the law in California, one of the reasons why Bill is asked to testify at legislature hearings is because he is known for being straightforward and blunt. He is known for being no B.S., with no lawyer-talk, no double-talk.

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Under California wage law, is my employer supposed to reimburse me for my cell phone? 

What are California personal cell phone reimbursement laws?
 
One of the issues that I see time and again is employees using their cell phones for work purposes and not being reimbursed.  The general rule in California is that if you use your cell phone for work purposes, then you employer is required to reimburse you for the company usage of your cell phone.
 
California Labor Code Section 2802 requires employers to always reimburse employees who are required to use personal cell phones for work-related calls for a reasonable percentage of their cell phone bills. Cochran v. Schwan’s Home Service, Inc. (2014) 228 Cal.App.4th 1137, 1140.
 

What if I have an unlimited data plan - can I still get reimbursed for my personal cell phone for work? 

 
In the Cochran case, the court held that the only issue is whether you are required to make work-related calls on a personal cell phone. Further, its irrelevant whether you already have a plan, whether its your cell phone plan, whether you already have an unlimited data plan.
 

What is the "company knew or should have known" requirement for business expenses? 

If you use your cell phone for work purposes, your employer has to reimburse you. But you have to be able to prove that the company knew or should have known that you are (or were) using your cell phone for company purposes, then the company must reimburse you for use of your personal cell phone.
 
Some examples are if the company supervisors or managers call you on your personal cell phone, then the company has knowledge. Or the company expects you to call customers or have customers call you. All of these are legitimate business purposes.
 
For example, if the company supervisors or managers call you on your personal cell phone, then they obviously know you are using your cell phone for work. Another way we win these cases is to prove that the company knows that you have to call the company’s clients or customers with personal cell phones.

 

Am I supposed to be reimbursed by work if I have to use my cell phone for GPS ... maps and finding locations?

Cell phone reimbursement for GPS

 
Don’t forget about using cell phones for GPS purposes. If you have to use the map function on your phone for directions, then your employer must reimburse you for this business expense.  For example, delivery drivers - from drivers delivering refrigerators to pizzas to salespersons regularly use the map feature on their cell phones to locate customers.
 
If you use your cell phone for GPS, then the company most probably owes you reimbursement for the use of your cell phone for work.

Happy clients with their settlement checks from a California unpaid wages case.
What makes this all worthwhile - when employees receive their checks for unpaid wages!

How much cell phone reimbursement money am I entitled to under California wage law?

It depends. I know that sounds like a lawyer answer, but I want to be accurate.
 
But, it is no defense that you have unlimited minutes or texting or whatever.
 
It depends on the circumstances and what you can prove. The law is often like that. It comes down the circumstances with you and if you have a class action case for all the workers at the company.
 
The way most employers satisfy the obligation to reimburse for cell phones is to pay a certain amount each month to employees. For example, $25 - $35 a week.
 
Is this enough? Again, it depends. If you are calling a lot, texting a lot and/or using a lot of data while roaming, it could be significantly more.
 

But, what if I have an unlimited data or use plan?

That doesn’t matter. You are still entitled to be reimbursed for your necessary business expenditures.
 

What is California law for me being reimbursed for using my car for work? 

Reimbursement for use of your vehicle - California Wage law

When you use your vehicle for work related purposes, your employer is required to reimburse you for the expenses related to you using your vehicle for business related purposes.  This is based upon California Labor Code section 2802.
 
Your employer can elect which reimbursement method to use. But it needs to reimburse employees for their vehicle costs that are incurred for business use. At the end of the day, you can challenge your employer’s (or ex-employer’s) method if it doesn’t accurately reimburse you. But, you are going to need records. (Read: evidence)
 
Most folks may have heard about the mileage reimbursement method. But in California, there are actually three different methods for calculating how much “business expenses” you are owed by the company for using your personal car for business activities.
 

1. What is the "mileage reimbursement" method? (IRS method for car reimbursement under California law)

This method is most often used with the IRS per mile rate, which changes each year. With this method, you simply multiply the number of miles you drive for work activities times the IRS per mile rate. The federal IRS rate is based on national average expenses. It is a widely used and accepted mileage reimbursement rate.
You need to remember, the IRS changes each year. And if you haven’t been reimbursed for your business mileage, then your “Statute of limitations” is 3 and perhaps 4 years. That is, the time period for which you can bring a claim.
 
The following are the IRS rates for the last few years.  If you don’t see the year you are looking for here, just Google the IRS rate at www.irs.gov.
 
 2013   56.5  cents a mile
 2014   56     cents a mile
 2015   57.5  cents a mile
 2016   54     cents a mile
 2017   53.5  cents a mile
 2018   54.5  cents a mile
 2019   58     cents a mile
 
In order to use this method, you need to keep records of the actual mileage that you incur for business related reasons.
 

2.  What is the actual expense method for calculating mileage? 

With this method, you must maintain detailed records of your actual expenses such as gas, insurance, repairs and depreciation. It is based on the actual expenses that you incur. What you have to do is calculate the automobile expenses that you incur.  
 
This method involves quite a bit more record keeping.
 

3.  What is the lump sum payment rate for calculating mileage? 

With this method, your employer pays you a lump-sum amount sufficient to provide full reimbursement for actual automobile expenses that you incurred.
 
If you can show that the reimbursement amount is less than the actual automobile expenses you incurred, your employer must make up the difference.
 
With this method, you employer can further satisfy its obligation by paying you enhanced compensation in the form of increases in base salary or commission rates.  However, your employer must use some way  to identify the portion of overall compensation that is intended as expense reimbursement.
 
The identified expense amount must be separately identified on the your wage paycheck stub. Otherwise, this is a 226 paycheck stub violation.
 

4.  What if my employer provides a vehicle? ... Do I have to be reimbursed by the company for gas, repairs, tires, insurance, etc.? 

 
Under this method, your employer provide a vehicle for business related purposes. Your employer must pay for, or reimburse you for all business related expenses for the vehicle (gas, repairs, tires, insurance, etc.).
 
And, if you are required to take the vehicle home, you may be entitled to compensation when you drive the company vehicle home. Gattuso v. Harte-Hanks Shoppers, Inc. 42 Cal. 4th 554, 555 (2015);  Espejo v. The Copley Press, Inc., 13 Cal. App. 5th 329, 372 (2017).
 

Bill represented the workers in the landmark  California Supreme Court case -

 Brinker vs Superior Court

(Maybe the most important wage case for the protection of workers)

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Bill Turley was named California's Leading Wage and Hour Class Action Lawyer

 

What if the company doesn't reimburse me for business expenses? 

What can I collect under California Law? 


Failure to reimburse - your remedies (What you can collect)
 
If your employer fails to reimburse you, your employer may be held responsible for the your  out-of-pocket costs plus interest from the date your incurred the expense as well as the your attorneys fees and costs to collect the unreimbursed expenses.
 
But wait, there’s more. Failure to reimburse can also give rise to paycheck stub violations and waiting time penalties. Be sure to check out those sections to see how this call all really add up.


What is the law for business reimbursement for cell phones for salary and commission employees, under California law? 

With salary and commission employees, employers can satisfy their obligation to reimburse for cell phones in the same way as for hourly employees. But in addition an employer can satisfy its statutory business expense reimbursement obligation under Lab. Code, § 2802, by increasing your base salary or commission rate.
 
However, in accordance with Lab. Code Section 200(a and 226(a), your employer is required to establish some means to identify the portion of overall compensation that is intended as expense reimbursement. Moreover, Lab. Code Section 2804, requires that the amounts that are identified must be sufficient to fully reimburse employees for all expenses actually and necessarily incurred. Gattuso v. Harte-Hanks Shoppers, Inc. 42 Cal. 4th 554, 555 (2015).
 
 

Am I supposed to be reimbursed under California wage law if I have to use a computer at my house? 

Home computer use
 
Pursuant to California Labor Code Section 2802, California employers are required to reimburse their employees for all "necessary expenditures... incurred by the employee in direct consequence of the discharge of his or her duties..."  So if you use you home computer for company purposes, then your employer must reimburse you for this expense. This is whether you are hourly employee, commissioned sales or a salary employee.
 

How about for home internet use...am I supposed to be reimbursed by the company? 

 
This also includes Internet access. You must be remembered for all reasonable business expenses. 
 

What is California wage law for commissioned salespeople for the reimbursement of business expenses?

The rule in California is that if you incur necessary business expenses, as part of your duties, then you employer is responsible for providing reimbursement of those expenses.
Commonly reimbursed business related expenses incurred by sales persons include:
 
 • training and seminar costs
 • mileage or all related car expenses
 • cell phone expenses
 • telephone charges
 •  home computer use
 • Internet charges
 • postage office supply expenses
 • advertising costs
 • office supply expenses
 • subscriptions
 • business meals
 • costs associated with transaction errors; and
 • costs to settle disputes with customers
 

If the company charges me for breakage and shortages - is this legal under California law? 

California law recognizes how very important it is for workers to receive their wages. Because of this, the California Wage Orders generally prohibit companies from taking deductions from your wages for breakage and shortage. Under California law, cash shortage, breakage, loss of equipment, cash being short, etc. is not your fault. These expenses must be borne by the company (read: you employer) - not you. 

It is illegal for the company to have you pay for breakage or shortages. It is illegal for you to have to make up lost cash and the like. 

The one exception to this rule if the cash shortage or breakage was caused by you're being dishonest, a willful act or gross negligence. But the company is going to need convincing evidence of this. Not speculation. 

You being "short" or the fact that equipment is missing or broken is never enough for the company to charge you for it. 

But, the company can, possibly, discipline you or even fire you. 


What happens if my employer fails to reimburse me for business expenses?

If your employer fails to reimburse you for business expenses, your employer may be held responsible for your out-of-pocket costs.  In addition, your employer is also responsible for interest from the date you incurred the expense as well as your attorneys fees and costs to collect the unreimbursed expenses.

 

Do I have to be reimbursed for uniforms under California wage law? 
Uniforms and 2802

Most Wage Orders provide that, "when uniforms are required by the employer to be worn by the employee as a condition of employment, such uniforms shall be provided and maintained by the employer. The term "uniform" includes wearing apparel and accessories of distinctive design or color."
 
It is also illegal, in most occupations, for an employer to deduct the cost of a uniform or tools (exceptions include tools or equipment used in certain trades or crafts, and implements used by barbers, hair stylists and manicurists).
 

Am I supposed to be reimbursed for maintaining my uniform under California law? 

The short answer, is yes. Although, it seems most lawyers go about this the wrong way. First, they should almost always be talking about workers having to laundry their uniform or work garment (like an apron).  Once you start talking about dry-cleaning (in most instances), then you will go down a rabbit hole where some employees will say they machine wash and some employees will say they dry-clean, etc. You don't want to or need to go there. 
 
So, instead, I suggest you focus on the time that it takes to wash your uniform. It doesn't matter if you are also washing your own clothes at the same time. It still take time to wash your uniform. And, under the Troester v. Starbucks case - you have to be paid fo all the time that you work. Troester v. Starbucks Corp. (2018) 5 Cal.5th 829, 847.
 
Now, when you get this off in to being paid for all time worked, you are talking pay stub violations, waiting time penalties, etc. 
 

What if my employer “suggests” that I need to wear clothes from the company store when I work?

It is not uncommon for retail stores to pressure employees to wear clothes from their store while working in the store. Under California law, this is illegal.
 
California Labor Code Section 450 prohibits any employer from compelling or coercing any employee . . . to patronize his or her employer, or any other person, in the purchase of any thing of value.
 

A Reported Case Study - Abercrombie & Fitch Co.

First, here I am simply reporting to you on an actual case. In many of my case studies, you will notice that I change the names, etc. in order to protect the identify of the employer and/or my client(s).  Both my publisher and my wife appreciate it when I do this. After all, I don’t want to be sued by some company that takes offense to my characterization of the evidence. This is even when I know I am spot-on with my observations and my analysis.
 
Here, is a little different. When I am referring to a reported Order or decision, it is not me characterizing the evidence, Instead it is the tries of fact - oftentimes the trial court or court of appeal that is characterizing the evidence. In these instances, I am merely reporting on what the court found.
 
That is what I am doing with the Abercrombie & Fitch Co. case. I am merely reporting on what the court found. Abercrombie had a “Look Policy.”
 
Abercrombie's "Look Policy" dictated what an employee may wear.  Abercrombie's policy expressly stated employees were not required to buy or wear clothing from the store, but did require employees' clothes to be "similar to the brand" and "consistent with the current fashion season and colors."
 
Moreover, the policy prohibited employees from wearing apparel obviously labeled by a label, name, or logo of a competitor.
 
The court found that whether these requirements describe a uniform for the purposes of California Labor Code section 2802 presented a common question, as did the question whether Look Policy-compliant clothing is "generally useable in the occupation or profession."
 
As usual, the company defended the case by arguing that there were more individual inquires than common questions. This is the typical class action “predominance defense” raised by companies.  You will see that most companies (this isn’t pointing to this particular company, but rather 9 out 10 companies in wage theft class action cases)  know they can’t win by proving that they didn’t steal wages
 
In addressing predominance, the court first rejected the company’s argument that individual inquiries were necessary because employees may not have purchased clothing from defendant stores.
 
The court found that a ‘uniform existed and reimbursement was necessary even if employees did not purchase clothes from the Abercrombie stores; "if a required piece of clothing is of a sufficiently distinctive design or color, an employer may be required to reimburse the employee for that purchase even if the item of clothing was purchased elsewhere."
 
The court next rejected the company’s argument that its one-time provision of free clothes to some employees required additional individual inquiries.  "While this issue of free clothes presents an interesting question, the Court concluded that it is appropriately characterized as part of the damages inquiry." After finding predominance as to both subclasses for similar reasons, the court went on to certify each class. Brown v. Abercrombie & Fitch Co., 2015 U.S. Dist. LEXIS 176214, *24 (C.D. Cal. July 16, 2015).
 

What do I have to prove for me to win my business reimbursement case? 

What do you have to prove in order to win your 2802 failure to reimburse claim?

 
Under California law, 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. . . ."  California Labor Code Section 2802(a).
 
What you must prove in order to prevail (read: the elements of a claim) under Section 2802 are:
 
 (1)  The employee made expenditures or incurred losses;
 (2)  The expenditures or losses were incurred in direct consequence of the employee's discharge of his or her duties, or obedience to the directions of the employer; and
 (3)  The expenditures or losses were reasonable and necessary.
 Marr v. Bank of Am., No. 09-CV-05978 WHA, 2011 U.S. Dist. LEXIS 24868, 2011 WL 845914, at *1 (N.D. Cal. Mar. 8, 2011) (citing Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal.4th 554, 568, 67 Cal. Rptr. 3d 468, 169 P.3d 889 (2007)).
            
At lease one court has found that the employer "must either know or have reason to know that the employee has incurred [the] expense." Stuart v. RadioShack Corp., 641 F. Supp. 2d 901 (N.D. Cal. 2009) (Chen, M.J.). Marr v. Bank of Am., 2011 U.S. Dist. LEXIS 24868, *3, 2011 WL 845914. (Judge Chen, Northern District of California.
 
More happy clients with their settlement checks from a California unpaid wages case.
It feels really good when you get your check for unpaid wages owed to you!

Another court has held that there is no “notice” requirement:

“If the California legislature had intended to insert an employer notice requirement into § 2802, it could have done so. It did not. The duty to reimburse does not need to be triggered by notice, actual or constructive. It exists so long as the uncompensated employee expenditures or losses are reasonably necessary to the work.
 
 The employer's duty under § 2802 depends upon whether the uncompensated employee expenditures or losses [*14]  were reasonably necessary, which can, in turn, turn on whether the employer either knew or should have known about the expenditures. The Court considers employer notice in this context only.”
 Espinoza v. West Coast Tomato Growers, LLC, 2016 U.S. Dist. LEXIS 113361, *12-14, 2016 WL 4468175 (Judge Whelan, Southern District of California).
 

Do I have to ask the company to reimburse me for my business expense in order for it to be owed to me?

There is no requirement that you have to ask to be reimbursed for your work related expenses
 
To show liability under section 2802, an employee need only show that he or she was required to use a personal cell phone to make work-related calls, and he or she was not reimbursed. Cochran v. Schwan's Home Service, Inc., 228 Cal. App. 4th 1137, 1145 (2014).
   
It is the same for all business expenses. All you have to do is to show that you were required to make a business expense and you were not reimbursed. There is no requirement under California law that you asked to be reimbursed.
 
As discussed herein above, there is no requirement under California law (read: an element that you must prove in order to win your business reimbursement case) that you asked to be reimbursed for the business expense.
 

Mechanics and tools: Do I have to be paid at least twice the minimum wage?


Any mechanic who uses his or her own tools or equipment on the job must be paid at a rate if at least twice the minimum wage. If an employer provides all necessary equipment, he or she is also responsible for the safety and upkeep of the tools and equipment.

The company wants me to "waive" my business expense claim... is this legal under California wage and hour law?


Your 2802 business expense claim can not be waived by contract
          
Under California Labor Code Section 2802, you have a right to be indemnified for all your necessary business expenses.  Here, indemnified means you have a right to be reimbursed for your necessary business expenses.
 
California Labor Code Section 2804 provides that this indemnification requirement cannot be waived by contract.
 

What is the time limit (statute of limitations) for bringing a business reimbursement claim - cell phone, computer, uniform, mileage claim - in California? 

Generally, you have three years to bring a claim for business reimbursement under California law. This can be extended to 4 years under a 17200 claim. That is, a fourth year being available for a Unfair Competition Claim
 
I suggest that you do not wait. Contact the best, honest California wage lawyer that you can find as soon as possible. 
 
 
This article is not legal advice. Just because we have had great results in so many California wage case is no guarantee of any particular result in your case or any other case. Every case is different.  This article is simplistic in order to achieve clarity. 
 

If I am owed my for business expenses - cell phone, uniforms, mileage, home computer, etc. - what should I do?

 
My first suggestion is that you contact the best, honest, unpaid wages lawyer that you can find. 
 
You should be trying to document everything as much as possible. With records, emails, etc. 

 

Your next step 

Call us at 619-304-1000  - If you call after regular business hours, when you leave a message, be sure to repeat your name and telephone number twice, so we get it correctly. And be sure to indicate whether it's okay if we respond by text.

Text us at 858-281-8008 - Be sure and put "new wage case" in your text.

Or leave us a message on this webpage

 

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.

 
William Turley
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“When I seek out professional advice, I don’t want B.S., I want it straight up. I figure you do also.”
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