Tag Archives: Business Expense Reimbursement

NEW CASE Reminds California Employers Of The Business Expense Reimbursement Requirement

A recent $5.4 million settlement of a California wage and hour class action (Marley Castro, et al. v. ABM Industries, Inc.) reminds employers of the far-reaching scope of California Labor Code section 2802’s business expense reimbursement requirement.

In this case, the plaintiffs alleged that the company had failed to reimburse all employees for the required use of their personal cell phones for business-related purposes.  According to the plaintiffs, the company required all employees to use their personal cell phones to (1) clock in and out from work and (2) to communicate with their supervisors.

While this case was settled, it serves as an important reminder that California employers are required to reimburse their employees for business-related use of their personal cell phones.  Specifically that California law requires that employers reimburse employees for “some reasonable percentage” of their cellphone bills if the employer requires them to use their personal cellphones for a business purpose – regardless of whether the employee incurs charges over and above what his or her plan costs.

Some common business-related uses for which employers may require employees use their personal cell phones include:

  • Clocking in and out for work or meal periods;
  • Checking or updating schedules via a scheduling app or otherwise requiring them to use data;
  • Texting or calling a manager regarding scheduling or for other work-related purposes;
  • Using data plans for GPS purposes;
  • Requiring employees to use cellphones for purposes of responding to emergency calls or for on-call time periods;and
  • Any other required use of a personal cellphone (text, call, or data) for business-related purposes.

It is recommended that all California employers review their current reimbursement policies and determine whether they are currently reimbursing employees for required business-related cell phone usage.  If employees are required to use their cell phones for work, employers have the following options available to them:

  • reimburse employees for actual cell phone fees incurred for business purposes;
  • reimburse for a percentage of cell phone fees that accurately reflects the amount of mandatory business usage (and inform employees that if their business-related use exceeds that flat rate, a process employees should follow for reimbursement); or
  • provide employees with a cellphone or another communication alternative for business use .

REMINDER – Illinois Business Expense Reimbursement Requirement Begins January 1st

Attention Illinois employers, starting January 1, 2019, all Illinois employers will be required to reimburse employees for “all necessary expenses that are incurred by the employee with the employee’s scope of employment and that are directly related to services performed for the employer.”  We previously reported on this new law in “NEW LAW – Illinois To Require Business Expense Reimbursement.”

In preparing for this new law, it is recommended that employers take note of the wide array of “business-related expenses” that an employee can incur, like

  • Mileage for work-related travel
  • Personal cell phone use for work purposes (including checking work emails)
  • Work-related expenses for remote employees (eg internet access, office supplies)
  • Costs associated with work-related travel (mileage, but also hotels, meals, air fare, parking, etc)

It is recommended that all Illinois employers develop a written business expense reimbursement policy that sets forth the steps an employee must follow to have their business expenses reimbursed.  Remember, employees are not entitled to reimbursement if they fail to follow an established, written expense reimbursement policy.

NEW LAW – Illinois To Require Business Expense Reimbursement

Illinois Governor Bruce Rauner recently signed Senate Bill 2999, an amendment to the Illinois Wage Payment and Collection Act into law.  This amendment, which goes into effect on January 1, 2019, will require all Illinois employers to “reimburse an employee for all necessary expenditures or losses incurred by the employee within the employee’s scope of employment and directly related to services performed for the employer.”

For purposes of the new law, the term “”necessary expenditures” means all reasonable expenditures or losses required of the employee in the discharge of employment duties and that inure to the primary benefit of the employer.  The law makes it clear that employers are not required to reimburse employees for losses due to an employee’s own negligence, losses due to normal wear, or losses due to theft unless the theft was a result of the employer’s negligence.

In order to obtain reimbursement, an employee will be required to submit any necessary expenditure with appropriate supporting documentation within 30 calendar days after incurring the expense.  In the event that the employee does not have “supporting documentation” relating to the expense (i.e. the documentation is nonexistent, missing, or lost), the employee must submit a signed statement regarding any such receipts in order to be reimbursed. Continue reading NEW LAW – Illinois To Require Business Expense Reimbursement