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For more information, visit www.ebglaw.com and subscribe to our email lists. For mobile phone and internet, for example, an employer must be able to show that the reimbursement reasonably related to needs of the business and was reasonably calculated not to exceed the expenses the employee actually incurred. Such expenses may include gas, oil, maintenance, repairs, lease payments, and insurance. Emergencies include those that threaten the safety of employees or a cessation of operations or serious damage to the employer’s property. But only some states require employers to do so. And while OSHA generally doesn’t inspect home offices as it does with traditional workplaces, employers must still track work-related injuries that occur with remote workers. In California, that can include home internet bills. In my role leading the legal function at Motus, I have turned to several of the nationwide General Counsel listservs to share and learn from others as we all navigate this changing landscape in real time. A recent amendment to the California labor code says that an employment agreement cannot force a California worker to accept the labor laws of a different state. Reimbursement of Work-Related Expenses. We use cookies on this website to enhance your browser experience. 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. On a personal note, I am incredibly grateful for the sharing of information, care and unity we are all witnessing during this crisis. Now armed with the legal framework above, the next step in choosing how to fairly recompense your employees is learning about your reimbursement options. This important statute reads as follows: An employer shall 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 … In New York, for example, certain non-exempt workers are entitled to “call-in” pay equal to the lesser of a specified hours of pay (four or three hours), or the hours of pay in the employee’s regularly scheduled shift, at the state minimum wage rate. App. California employees have a broad right to reimbursement of work-related expenses. Employees’ Personal Vehicles: If an employee is required to use her personal vehicle for work (other than for a normal c… In addition, it is important for employers to track the type of telework performed by their exempt workforce. Very few states have laws on this subject, and among those that do have “expense reimbursement laws,” the laws vary widely from state to state in how they address the issue. In an actual emergency situation, however, an exempt employee does not lose exempt status by performing work of a normally non-exempt nature for a relatively limited period of time. Did you know that California Labor Code Section 2802 requires employers to reimburse employees for any necessary expenses the employees incur while doing their jobs? If exempt employees perform no work in any given workweek, they need not be paid for that week of work; however, if any absences are at the employer’s direction or the operating requirements of the business, exempt employees must be paid their full weekly salaries. Mandatory remote work expenses must be reimbursed in California. If, however, it is mandatory (e.g., the employee Some are even free. Follow the firm on Twitter, Facebook, Instagram, YouTube, and LinkedIn. (E.g., for every $100 of taxable stipend, $38 is lost to taxes employee and employer.) While the basic distinction is that reimbursements are un-taxed and compensation is taxed, in practice things are more complicated. Though California and Illinois are silent on when reimbursement must be made, other jurisdictions are not. How to Optimize Your Investment and Cut Costs, Creating Tax Solutions Through Business Vehicle Technology: A Medical Device Company Reduced Its Fica Tax by Almost $500,000, If it doesn't load, you can fill out the form here. “Test” your WFH protocols, including time-keeping software, to identify any areas for remediation or improvement. The world is a different place today than it was a month ago – or even a week ago. work-from-home due to COVID-19), the employer likely does not have an obligation to reimburse the employee for costs associated with such an arrangement — even in states that have laws requiring reimbursement of certain expenses (see below). As businesses and individuals try to ascertain what the new normal will look like, one thing is clear: the workplace as we’ve known it is transforming. Employers sometimes slip a “choice-of-law” provision in their contracts that says the labor laws of the employer’s home state will govern the employment … As the number of U.S. states reporting cases of COVID-19 coronavirus increases, many employers are imposing mandatory work from home (“WFH”) policies to mitigate risk of contamination and ensure business continuity. ; but now that more employees than ever are working from home, there are still a lot of questions. Other than teachers, doctors, lawyers, or employees paid on a “fee basis,” employees who are exempt from overtime must be paid for the entire workweek during which they perform any amount of work, unless the regulations authorize a deduction, such as where an exempt employee is absent from work for one or more full days for personal reasons, or for absences of one or more full days on account of sickness or disability if in accordance with a bona fide plan, policy, or practice of providing compensation for loss of salary occasioned by such sickness or disability. Recently, a California court of appeal applied Section 2802 to work-related cell phone use. A one-size-fits-all WFH stipend for all employees – even if intended to reimburse for business expenses – is likely taxable. Employers are free to reduce their non-exempt employees’ regularly scheduled hours due to temporary closures or reduced demand. 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 … This includes expenses as a “direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer.” 1. Under California Labor Code Section 2802 and court decisions in Gattuso v. Harte-Hanks Shoppers, Inc ., 42 Cal.4th 554 (2007) and Cochran v. Schwan’s Home Service, Inc., 228 Cal.App.4th 1137 (2014), employers are required to reimburse employees for all “necessary” and … To support a tax-free reimbursement program, employers should leverage data that accounts for each individual’s regionally-specific costs. There are a number of easy-to-use timekeeping smartphone applications. The Court also warned that employee cannot waive the right to be fully reimbursed for their actual expenses: By continuing to use this site or by clicking the button below, you are providing us with your consent to our use of cookies on the site. An Employer’s Duty to Reimburse. Employers must also be mindful of state-specific expense reimbursement laws, which may impose additional requirements. during the coronavirus outbreak, be aware that certain state laws require extra pay. 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. with Distinction from Stanford Law School and is a graduate of Brown University (Phi Beta Kappa, Magna Cum Laude). Direct non-exempt employees to use software that allows them to accurately record and submit their hours remotely (and confirm in advance that the software can be accessed remotely). When you look at the laws applicable to your jurisdiction, check specifics on when your employees must be reimbursed. As more employees become remote, this inefficiency only multiplies. Remind non-exempt employees that time spent reading and/or responding to emails constitutes “work.”. If they earn at-or-close-to the minimum wage. Please note, use of this product requires a Motus app subscription. Whatever the form, employers enacting WFH policies need to make sure they are appropriately compensating their workers and are otherwise complying with all applicable federal, state, and local wage and hour laws. Even if you have good intentions, missing those reimbursement deadlines could cost you. California employers must reimburse employees for business expenses that are "the direct consequence" of discharging work duties. One question that has come up many times with these legal leaders is this: While I may not have answers to many of the “new-normal” questions we’re facing, as CLO of a business that calculates business reimbursements for mixed-use assets, I can shed some light on factors businesses should consider for WFH. What tasks can employees do from home? Since many states have no employee business expense reimbursement laws, this baseline protection under the FLSA will apply. Adopt or reiterate, as applicable, a written policy requiring all workers, including those working from home, to record all hours worked, Encourage non-exempt workers to work their regularly scheduled hours (e.g., 9 a.m. to 5 p.m.) and instruct managers to try not to communicate requests for work to non-exempt employees outside regularly scheduled hours. Establish, operate and maintain the home office, equipment, devices, and services associated with the telework arrangement; Comply with tax laws. The remote work expenses that must be covered by employers in states with strict reimbursement laws includes mostly communications devices and plans. Keep in mind that any state laws requiring paid/unpaid mandatory meal and/or rest breaks (e.g., California) will apply equally to non-exempt employees working remotely in … For mobile phone and internet, for example, an employer must be able to show that the reimbursement reasonably related to needs of the business and was reasonably … Local quarantines, many employers directed employees to work during any unpaid meal breaks and to record accurately such. Of Americans all kinds of new needs and questions for employers of sectors. Coronavirus outbreak, be aware that certain state laws require extra pay that threaten the safety of employees otherwise. All such periods and your workforce california work from home laws reimbursement and thrive could cost you scheduled. 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