Employee Expense Reimbursement in California

  

  

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California, unlike most other states, has a law that requires employers to reimburse its employees for reasonable business expenses.   california Labor Code Section 2802 (a) requires an employer to "indemnify ... employees for all necessary expenditures and losses incurred ... in direct consequence of the discharge of his or her duties ..." Employers have flexibility in their ability to set off these expenses through any means that works - but no matter how it is done, the company has to reimburse its employees for all reasonable business expenses incurred.  

Our firm is currently handling a case against a company that simply does not reimburse its sales team for reasonable costs incurred as part of their sales duties such as to tolls, parking, business meals and the like.   It is a fairly common practice and in most states companies do not have to reimburse its employees unless the expenses incurred cause the employees wages to fall below minimum wage.