September 11, 2019

Expense Reimbursement is the Law

By Terry O’Connor

Labor Code § 2802 requires California employers to reimburse employees for all necessary expenditures incurred in the performance of their duties. In general, employers must reimburse the cost of uniforms, travel expenses, tools and equipment required for the job. Necessary expenditures include any attorney fees or costs incurred by employees to recoup expenses from their employer.

California’s wage and hour plaintiff attorneys have seized on expense reimbursement as another means of extracting large settlements from unwary employers.

This indemnification obligation can also include liability for an employee’s unlawful behavior when the employee was acting on the orders of the company. Employers are not only liable for a judgment entered against an employee for wrongful conduct, they are also required to pay the cost of the employee’s defense in such cases. However, an employer need not defend an employee if the employee knew that his actions were unlawful.

Some guidance on what expenses must be covered under Labor Code§ 2802 is in the Wage Orders.



One section requires employers to provide and maintain tools and equipment if such tools are required by the employer or are necessary for the job. Employees who make more than twice the minimum wage may be required to provide their own hand tools required by their specific trade.

In a recent lawsuit, a plaintiffs’ firm is contending that the employer’s failure to provide tools is a violation of the minimum wage law and are seeking the difference between $22.00 per hour and the employee’s actual hourly rate!

Another section covers employer-required uniforms. Other gear must be reimbursed under certain circumstances. In agriculture, most employers have policies requiring sturdy shoes and prohibiting open-toe footwear. A recent court decision clarified that merely requiring slip-resistant shoes at Denny’s restaurants did not trigger an obligation to pay employees for those shoes. The court noted that certain articles of clothing which are “usual and generally usable in the occupation” do not meet the standard of a “uniform” which must be reimbursed.

A different standard applies to necessary safety equipment (Personal Protective Equipment or PPEs) such as goggles, gloves and hard hats necessary to protect employees from work place hazards. Such equipment is mandated by OSHA. For example, California has just passed a requirement for respiratory devices to protect outdoor employees from wildfire smoke and Cal-OSHA is now requiring ammonia facilities such as produce coolers to install self-rescue respiratory masks.



Most employers are aware of the need to reimburse for work-related travel, meals and mileage. Many agricultural employers do not realize they have incurred travel expense obligations when they require employees to use their personal vehicles for work. An example is when employees use their cars to travel between fields during the day. Driving to and from work at the beginning and end of the day is not compensable. However, any employee using their car to drive between fields after the start of work is entitled to a mileage reimbursement.

Both the California Supreme Court and the Division of Labor Standards Enforcement (DLSE) take the position that payment of a reasonable mileage reimbursement satisfies the Labor Code. The Internal Revenue Service Rate rate ($0.58 per mile in 2019) is an acceptable rate to pay for work-related use of a personal vehicle.

There is an exception to the ‘to and from’ work exemption. Employees who are required to transport tools and equipment necessary for the operation may be entitled to additional mileage reimbursement. An example is a foreman who transports drinking water, bathroom supplies or tools in his personal truck.



Cell phones are ubiquitous in the fields among employees, foremen and supervisors. When does the required use of cell phones for work trigger the obligation to reimburse an employee for such use?

A foreman or supervisor uses a cell phone to contact others in the company or his subordinates is clearly entitled to reimbursement of such costs. The difficulty of distinguishing between personal use and business use has led most employers to simply provide phones to their management staff. Furthermore, a court has ruled that an employer must always reimburse and employee for the reasonable expense of mandatory personal cell use even when the employee incurs no extra charge on his phone plan.

In general, non-exempt harvesters would not be able to claim reimbursement for personal cell use. However, some employees, such as irrigators, quality control employees and truck drivers who receive multiple daily instructions or who must regularly report from remote locations are entitled to reimbursement if a personal cell phone is used.

In order to resolve such issues the employer could reimburse a reasonable portion of the cell cost or provide a low cost phone to such employees.



An employee’s right to be reimbursed for necessary expense should be contained in the Labor Code Section 2810.5 notice. A written notice with rates of pay, payday, employer identification information and sick leave benefits must be provided to all new employees and should be given to all seasonal employees when they start a new season. Including the reimbursement language in this document establishes that the employer has a lawful policy.

The policy should also be featured in any employee manual or set of rules. Ensuring employee awareness of a reimbursement policy is a vital step in preventing class action claims. Once the policy is established, the company should use specific reimbursement forms designed by the employer. The office, all supervisors and foremen should have a supply of such forms and instructions on their use.

Employers may initially be concerned about excessive reimbursement claims. When travel in personal vehicles is required during the day, the foreman should note the distance travelled on the crew sheet. Most of the time employees who use their personal vehicles for short distances will not take the time to obtain, fill out and turn in a form for a couple of dollars. Nevertheless, supervisors must provide the forms and never discourage their use.

A policy which prescribes the use of authorized forms submitted within a designated time period will ensure that reimbursement requests are timely for budgeting, billing and tax purposes and ensure that all employees are treated consistently.

Finally, the forms should allow for reimbursement of other necessary expenses such as cell phone use, special gear, supplies or uniforms.