Under California Labor Code Section 2802 and court decisions in Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal.4th 554 (2007) and Cochran v. The short answer is, probably not. In some states employers are required by state law to reimburse their employees for their necessary job expenses. What’s clear is that not all effective sales people do the same things—or incur the same expenses. As employees continue working from home during the Coronavirus/COVID-19 pandemic, California Labor Code section 2802, which requires employee reimbursement for all necessary expenses incurred while completing work duties, operates to ensure employers who fail to provide necessary equipment and resources for completing the job reimburse employees who use their personal property. An employee who is asked to work from home can always ask their employer to compensate them for any expenses necessary to set up a home office. Over the last few years, California has led the way in efforts to gain reimbursement for employees of many different work-related expenses. When non-exempt employees work from home, it can be difficult for an employer to monitor their hours, thereby increasing the risk of off-the-clock and overtime claims. An Employer’s Duty to Reimburse. See Cochran v. Schwan’s Home Serv., Inc. Under federal law, employers are generally not required to reimburse employees for their business related expenses. Employees working from home may incur any number of expenses – home computers, printers, Internet service, WiFi connections, smartphones and even paper, pens and other office equipment. This article provides employers with analysis and tips related to expense reimbursement of remote workers in California. A number of other states have enacted statutes that require reimbursement of employees’ necessary business expenses: In California, an employer must reimburse an … The law is intended to prevent employers from passing on their operating expenses to their employees. One unforeseen consequence of requiring employees to work from home is some jurisdictions mandate that employers reimburse their employees for certain expenses incurred as a result of their employment. Section 2802 applies to every kind of expense an employee might incur in performing a job and includes the cost of home internet service where work from home is required. If so, you may be wondering if you’re allowed to take the home office tax deduction for those expenses on your 2020 federal tax return. In a handful of states, employers must reimburse employees for all expenditures incurred in performing their duties at home. Finally, remember that California’s expense reimbursement law only applies to expenses that are “necessarily” incurred in direct consequence of the job duties or in complying with an employer’s directions. Posted in Expense Reimbursement, ... employers must consider several issues before allowing employees to work from home. B. In response to the COVID-19 pandemic and state and local quarantines, many employers directed employees to work from home. California is in the forefront of states mandating that employers reimburse employees for work-related expenses. In addition, under California law employers don’t have to reimburse expenses incurred because an employee chooses to work from home. California’s law has been interpreted to require reimbursement of a “reasonable percentage” of an employee’s monthly bill for Internet or mobile device data plan, even if the employee does not incur any additional cost for using the Internet or mobile device for work (e.g., unlimited data plan). The California Labor Code – and, consequently, Section 2802 – only … Reimbursement of Employee Expenses California’s Labor Code Section 2802 normally requires employers to reimburse employees for “reasonable” and “necessary” expenses incurred while performing their job duties. There are a number of laws and regulations that require employers to reimburse expenses that employee incur or to pay for employees use of their own property. All is not necessarily lost for employees forced to work at home. Expense Reimbursement for Employees Working Remotely Employers requiring employees to work from home during COVID-19 quarantines should promptly review and update their expense reimbursement policies. If paying a percentage of the bill, employers should explain the calculation method to employees when they receive the reimbursement payment. In an effort to prevent the spread of COVID-19, many employers are permitting, and in some cases requiring, employees to work from home. Navigating Expense Reimbursement for “Work From Home” Employees March 30, 2020 To curb the rapid spread of COVID-19, over half of U.S. states and numerous local governments have adopted shelter-in-place orders, most of which require residents to remain at home, except to provide or receive essential services. Purchase costs or maintenance expenses associated with employee-owned items or related services. A. This issue may seem less significant than some California mandates—such as paid-time-off … Depending on … Otherwise, you end up losing 30-40% of the payment to taxes. Can my boss fire me for filing a claim for travel expenses? It is illegal for an employer to retaliate … Mileage reimbursement rates do not necessarily have to be set at the IRS rate, but use caution. The … But only some states require employers to do so. The Legislature’s intent is that employees should not bear losses or expenses incurred in the service of their employers. The employee then reports the miles driven to the employer, who then reimburses the employee according to a set per mile rate. California employers must reimburse workers for reasonable business expenses. These include California, Illinois, Iowa, Massachusetts, Montana, New Hampshire, New York, Pennsylvania, and the District of Columbia. Expenses incurred as a result of working a telework schedule will not be reimbursed by the State including, but not limited to, the following: usage fees for privately owned computers, utility costs associated with the use of telephone, computer or occupation of the home, or travel to the Central office if required to come in on a telework day. That means if you take part in an optional work-from-home program, your home office expenses may not be reimbursable. California employers must reimburse employees for business expenses that are "the direct consequence" of discharging work duties. Pandemic or no, reimbursement policies for work-related employee expenditures “should already be on employers’ radar,” according to Lenore Horton, an employment attorney with FisherBroyles. Who is submitting the receipt? As in the case of a car allowance versus a vehicle reimbursement, it is generally preferable to choose a non-taxable approach. So, if your home office space is 200 square feet and your home is 2000 square feet, you would claim 10% (200/2000) of your home-related expenses (insurance, taxes, mortgage interest, etc.) In California, when employees must use their personal cell phones for work-related calls, employers must pay some reasonable percentage of those phone bills even if employees incurred no extra expenses using their cell phone for work. Labor Code Section 2802 … as … Now, individuals who normally come into an office and use the resources there to conduct business may be using their own laptops, Internet, and carving out office space in their apartments and homes. As remote work takes off, the issue of home-office reimbursements could become a legal one, said Josh Henderson, a labor lawyer and partner at … The “mileage reimbursement method” is the most common way employers reimburse employees for personal automobile expenses and requires the employee to track all mileage driven for work. The Labor Commissioner, discussed here, has recognized the futility in guessing why or how sales are made. Employers should reimburse home-bound employees for at least a reasonable percentage of their home internet expenses; risk-averse employers may choose to reimburse the entire home internet bill. These include California, Illinois, Iowa, Pennsylvania, Montana, and New Hampshire. They can ask their employer to reimburse them for their home office expenses. ... since their supervisors obviously cannot consistently see when work is being performed. In California, that can include home internet bills. But the last thing you want is for your expense reimbursement policy to crimp sales by stifling effective sales activities. In California, residential energy ... "Some states and cities have laws that actually require employers to reimburse employees for work-related expenses. To ensure that non-exempt employees are paid for all time they are working outside the … The following telework or remote work expenses will not be reimbursed: Private worksite or employee home expenses such as electricity, insurance, home maintenance, home modification for office purposes and other similar personal expenses. Work-from-home stipend or reimbursement? 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