What Is Employee Expense Reimbursement?

Posted on: October 1, 2018

If you’ve spent money on things that are necessary for the operations of your company, then your employer is obligated under California law to reimburse you for those expenses. If your employer fails to—or refuses to—reimburse you for your advances, then your employer is
guilty of violating the employee expense reimbursement law.

Know the Employee Expense Reimbursement Law

Under Section 2802 of the California Labor Code, an employer should “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.”

This means that you have the right to be reimbursed by your employer for business-related expenses, including meals and entertainment, travel, and the purchase of materials for training. The law was also enacted to ensure that your employer does not pass some of the operating costs of the company to you.

Understand Your Company’s Employee Expense Reimbursement Policy

It’s important to note, however, that not all expenses incurred by the employee while working should be reimbursed by the employer. Your employer may provide an employee expense reimbursement policy that dictates the kind of expenses that are considered reimbursable. If you buy things that are not related to your work during work hours or while doing work-related tasks, these purchases are not reimbursable as they’re neither vital to your work nor the operations of your company.

Reimbursable expenses depend on the circumstances of the case. For example, salespeople and executives are often required to travel a lot for their jobs. If you’re asked to drive to meet a client as part of your work, then any gas expense needs to be reimbursed by your employer. This includes any toll or parking fee. Also, if you’re using your cell phone to call clients as part of your job, then your employer should reimburse you for the cost of those calls.

Common Types of Reimbursement Expenses

The kinds of reimbursement expenses vary and depend on the occupation and the business. Some employees have few reimbursements and others have daily reimbursements that can amount to thousands of dollars per year.

Here are some typical reimbursement expenses:

  • Driving costs
  • Uniform costs
  • Travel expenses
  • Internet service fees
  • Training fees
  • Business center expenses
  • Conference fees

Proof of Expenses

In order to make an honest claim for reimbursement, you’ll need to itemize or document your work-related expenses. These could include cell phone bills with calls related to your work; receipts for gas, toll, and parking; and receipts for materials purchased for presentations. Your employer will counter-check these before reimbursing you for your advances.

Be Aware That Some Employers Misclassify to Avoid Reimbursing

There are employers who misclassify their employees in order to avoid reimbursing work-related expenses. If you’re an employee but your employer misclassifies you as a job contractor or independent contractor, then your employer is guilty of misclassification.

A real job contractor is his own employer. This means that as a job contractor you’re given compensation for the final output of your work. However, an employee is different. An employee is given compensation for the work or service rendered on an hourly, weekly, or monthly basis. He should not be forced to pay for any operating expense that’s related to his work duties.

Seek Legal Help if Your Employer Doesn’t Reimburse Your Work-related Expenses

Employers should never discriminate or retaliate against employees who’re asking for rightful reimbursements. Remember that this is also against California law. If you’re experiencing problems with your employer, do not handle this concern on your own. Seek the help of experienced employment and labor law attorneys in Los Angeles.

Mesriani Law Group’s team of knowledgeable attorneys will ensure that you’re correctly reimbursed for all of your work-related expenses, as well as recompensed for any damages you’ve suffered as a result of your employer’s unscrupulous behavior.