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Work-Related Expenses: Practices

     Reimbursement for Work  Related Expenses


California Labor Code Section 2802 requires an employer to indemnify its employee for all necessary  expenditures or losses incurred by the employee in direct consequence of the discharge of their duties, or of the employee's obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful.

All awards made by a court or by the Division of Labor Standards Enforcement for reimbursement of necessary expenditures under this section shall carry interest at the same rate as judgments in civil actions. Interest shall accrue from the date on which the employee incurred the necessary expenditure or loss.

For purposes of this section, the term “necessary expenditures or losses” shall include all reasonable costs, including, but not limited to, attorney’s fees incurred by the employee enforcing the rights granted by this section.

In addition to recovery of penalties under this section in a court action or proceedings pursuant to Labor Code Section 98, the commissioner may issue a citation against an employer or other person acting on behalf of the employer who violates reimbursement obligations for an amount determined to be due to an employee under this section.

                                                                                  Common FAQ:

Q:  Are employees in California entitled to be reimbursed for their out-of-pocket work-related expenses?
A: Yes. Employees are entitled to be reimbursed by the employer for all expenses or losses incurred in the direct consequence of the discharge of the employee's work duties. 

Q:  Are employees in California entitled to be reimbursed for the use of their personal cell phones as part of their job?
A: Yes. In California, Employers must pay some reasonable percentage of employees’ cell phone bill when employees are required to use their personal cell phone for work-related purposes. This applies even when the employee has a cell phone plan with limited or unlimited minutes, the phone bill is paid for by a third person, employees changed plans to accommodate worked-related cell phone usage, or employees’ phone are part of a family or group plan.

Q:  Are employees in California entitled to be reimbursed for the cost of using their personal vehicles for work-related activities?
A: Yes. In California, if employees use their personal vehicles to travel on company business, Employers must reimburse employees for the cost of that travel.  Employers can reimburse employees in a number of ways:

  • Reimburse the “actual expenses”:  Employers can reimburse employees for the actual expenses incurred by separately paying the amount of automobile expenses including the actual costs of fuel, maintenance, repairs, insurance, registration, and depreciation.

  • Reimburse using a “mileage rate”: Employees keep a record of the number of miles driven for job duties, an then multiply those miles by a predetermined amount that approximates the per-mile cost of owning and operating a vehicle. This method merely approximates the actual expenses and is less accurate than the actual expense method.

  • Reimburse with a “lump-sum payment”: Employers pay a fixed (monthly or weekly) amount of money for vehicle expense reimbursement, such as a per diem, vehicle allowance, or gas stipend. This method is generally based on the number of miles an employee routinely must drive to perform his or her job duties, and may be used only if the amount paid is sufficient to provide full reimbursement for actual expenses incurred.  Employees can challenge the amount of a lump sum payment if it is insufficient to cover the mileage expenses.

Employers are NOT required to reimburse employees for mileage driven commuting to or from work. The same goes for other transportation costs incurred in commuting to and from work.

An employee is entitled to be reimbursed by his or her employer for all expenses or losses incurred in the direct consequence of the discharge of the employee's work duties.

Q:  What action can an employee take if the employer does not reimburse the employee for out-of-pocket work-related expenses?
A: An employee can either file a wage claim with the Division of Labor Standards Enforcement (the Labor Commissioner's Office), or file a lawsuit in court against the employer to recover the lost wages. Additionally, if the employee no longer works for this employer, the employee can make a claim for the "waiting time penalty."

Q:  What is the procedure that is followed after an employee files a wage claim?
A:  After a claim is completed and filed with a local office of the Division of Labor Standards Enforcement (DLSE), it will be assigned to a Deputy Labor Commissioner who will determine how best to proceed.

Initial action taken regarding the claim can be:

(i) referral to a conference

(ii) referral to a hearing, or

(iii) dismissal of the claim.

If the decision is to hold a conference, the parties will be notified by mail of the date, time and place of the conference. The conference is held to determine the validity of the claim, and to see if it can be resolved without a hearing. If the claim is not resolved at the conference, the matter is usually referred to a hearing.

At the hearing the parties and witnesses testify under oath, and the proceeding is recorded. After the hearing, an Order, Decision, or Award (ODA) of the Labor Commissioner will be served on the parties.

Either party may appeal the ODA to a civil court of competent jurisdiction. The court will set the matter for trial, with each party having the opportunity to present evidence and witnesses. The evidence and testimony presented at the Labor Commissioner's hearing will not be the basis for the court's decision.

In the case of an appeal by the employer, DLSE may represent an employee who is financially unable to afford counsel in the court proceeding.

Q:  What can an employee do if they prevail at the hearing and the employer doesn't pay or appeal the Order, Decision, or Award?
A:  When the Order, Decision, or Award (ODA) is in the employee's favor and there is no appeal, and the employer does not pay the ODA, the Division of Labor Standards Enforcement (DLSE) will have the court enter the ODA as a judgment against the employer. This judgment has the same force and effect as any other money judgment entered by the court. Consequently, the employee may either try to collect the judgment themselves or the employee can request it to be assigned to DLSE.

Q:  What can an employee do if their employer retaliates against them after the employee informs the employer that they are going to file a wage claim?
A:  If an employer discriminates or retaliates against an employee in any manner (for example, discharges the employee) because the employee filed a wage claim or threats to file a wage claim with the Labor Commissioner, the employee can file a  discrimination-retaliation complaint with the Labor Commissioner's Office, file a lawsuit in court against your employer.

If you have any further questions regarding reimbursement for work-related expenses, or other compensation, or you need legal representation after a claim is filed, contact me at (916) 333-4653 or for a FREE confidential consultation to learn more.


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