Currently, California Labor Code section 2802 requires California employers to reimburse employees for necessary business expenses. Employers required to reimburse employees for necessary expenses in growing number of states. The WARN Acts are essentially designed to give employees and the government agencies advanced notice to prepare for mass layoffs. The EDD is reportedly expediting benefit payments in light of COVID-19. Accordingly, please do not send us any information about any matter that may involve you unless we have agreed that we will be your lawyers and represent your interests and you have received a letter from us to that effect (called an engagement letter). TERMS & CONDITIONS   |   Reports confirmed to Ogletree Deakins by an official from Immigration and Customs Enforcement (ICE) indicate that an initiative commenced on September 15 will result in over 500 new Notices of Inspection (NOIs) being issued to employers across the country. Employers should carefully weigh the risks and benefits of giving shortened WARN Act notice or late notice after mass layoffs have already occurred. Gattuso, at 479. The California Labor Code – and, consequently, Section 2802 – only … As the coronavirus situation is fluid, we encourage review of the EDD’s website at least daily relative to whether, and to what extent, benefits might be available. Employers seeking to reduce labor costs temporarily sometimes use the euphemism “furlough.”  The term “furlough” has no legal or agreed-upon meaning in California. This statute requires employers to reimburse employees for all expenditures necessarily incurred by the employee in direct discharge of duties for the employer, or in obedience to directions of the employer. As such, employers should be sure to implement programs to reimburse employees for such expenses as home internet, cell phone usage, printer ink, paper, and other relevant supplies. The federal law provides escape clauses for labor strikes, natural disasters, and even “not reasonably foreseeable” business circumstances. California’s law is Labor Code section 2802. This statute requires employers to reimburse employees for all expenditures necessarily incurred by the employee in direct discharge of duties for the employer, or in obedience to directions of the employer. This article provides employers with analysis and tips related to expense reimbursement of remote workers in California. Some cities are now legally requiring employees to take “shelter” in their homes and not report to the employer’s place of business. Critically, during the furlough period all employees will continue to receive their health benefits. Employers should be careful to reduce hours in a way that does not appear discriminatory. Courts and the Division of Labor Standards Enforcement may be sympathetic to employers facing an immediate shut-down order. In response to “stay-at-home” orders issued by Governor Gavin Newsom and various California municipalities to prevent the further spread of the coronavirus (SARS-CoV-2) employers have been asking or requiring employees to work from home. Employers must reimburse the employee within a time period “reasonable” under the circumstances. The EDD publishes on its website the names of the employers, the date of the layoffs and the date of the notice. Employers may demand proof of incurred expenses. If employers fail to give 60 days’ notice, such employers often find themselves defending class action lawsuits seeking back pay up to 60 days, statutory penalties, and attorney’s fees. However, an employer should certainly not wait more than 72 hours to tender final paychecks. (b) 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. California, COVID-19/Coronavirus, Employment Law, State Developments. October 12, 2020 Assembly Bill 2855, recently signed into law by Governor Newsom, will require that acute care hospitals in California reimburse employees and job applicants for certain training costs. Recent Case Results. California's Labor Code requires employers to pay for "all necessary expenditures" workers incur in performing their jobs. Businesses depending on large gatherings may also be forced to consider reductions in force. If an employer were to reduce only the hours of the highest paid workers, for example, such a practice may have the unintended impact of harming only older workers over 40-years-old and thus create the specter of age discrimination. Employers should seek legal counsel for closer analysis if the headcounts are very close to the threshold. 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 “reasonable” 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 … Necessary expenditures or losses include all reasonable costs. California expressly rejected the hazy “not reasonably foreseeable” exception. The cost of office supplies such as pens, pads, lamps, and furniture are not reimbursable unless the employer requires the use of specific types of supplies. The underlying assumption of Labor Code Section 2802, Cochran, and Gattuso is that an employer provides employees with the equipment and resources necessary for employees to perform their jobs. However, as the state and local stay-at-home orders have been extended into May, employers may want to review their expense reimbursement policies to ensure that they are not leaving themselves vulnerable to claims and litigation later. Dictionaries tend to define “calamity” in terms of the effects of distress or misery rather than actual events. In addition to the threshold 50-employee requirement, the federal WARN Act applies only if the number of displaced employees exceeds 33% of the full time workforce. The California WARN Act is not as forgiving. SITEMAP   |   The mission of the California Labor Commissioner's Office is to ensure a just day's pay in every workplace in the State and to promote economic justice through robust enforcement of labor laws. The California Labor & Workforce Development Agency (LWDA) is an executive branch agency that provides leadership to protect and improve the well-being of California’s current and future workforce. Yesterday, Governor Gavin Newsom signed AB1867 into law, which provides supplemental paid sick leave benefits for California workers. Finally, the costs of postage, mail delivery, and messengers are not reimbursable except when required if a reasonable alternative (such as scanning, faxing, and email) does not exist. Must an employer reimburse remote workers for all cell phone usage since supervisors are calling employees at home? In California, Governor Gavin Newsom waived the traditional one week waiting period for EDD benefits to kick in, thus providing employees with immediate relief. Judges in a federal WARN Act case have the discretion by statute to excuse shortened notice given under the circumstances; judges in a California case apparently do not have as much discretion in that regard. Significantly, the WARN Acts require the employer to give the group of affected employees sixty (60) days’ notice of the layoffs. Due to the coronavirus (COVID-19) pandemic, millions of employees who ordinarily work at an office or other workplace provided by their employers are now working at home.While you can no longer get a tax deduction for work at home expenses, here are some other ways you can get reimbursed for these costs, including as qualified disaster relief payments. All employees may apply for unemployment benefits with the Employment Development Department (“EDD”). All Rights Reserved. But what if urgent circumstances do not allow for 60 days’ notice? As changes are made, employers should be mindful of the following existing laws and new laws on the horizon. California Labor Code section 2802 obligates employers to reimburse employees for “all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, …” The Cochran decision posed, and answered, the “threshold question” presented on appeal as follows: In the face of the swift and dramatic changes to business operations caused by the pandemic, many employers transitioned some or almost all of their employees to working at home literally overnight. (a) 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 or her 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. Many other laws found in the California Government Code, Public Utility Code, and Harbor & Navigation Code state that a “calamity” includes not only fires and floods, but also “epidemics.”  Because an “epidemic” is usually defined as the spread of disease, a judge should find that the spread of deadly COVID-19 and the drastic attempts to curb its spread qualify as an “epidemic” and thus a “calamity.”. For expensive items or detailed invoices, that turnaround time rarely exceeds a few months. Making sure the employees had the technology to make the transition seamless was an initial priority. 20STCV41117, is currently pending in the Los Angeles County Superior … Businesses that are faltering but not completely shut down face a bigger risk of not waiting 60 days to shutter or lay off workers. Lawmakers are also planning soon to protect employee job status and health insurance coverage. Section 2802 operates to prevent an employer from passing its operating expenses to employees. The federal House of Representatives is in the process of passing bill H.R. Hopefully, judges will not require bubonic plague-like infection statistics to deem the COVID-19 fallout a “calamity.”  Mitigating the employer’s exposure is the California WARN Act provision that an employer may argue its “good faith” belief that the 60-day WARN Act notice was not required. With respect to personal computer and printer usage, if the employee were required to use personal devices for work, reimbursement for the normal “wear and tear” on the personal equipment could be required. 3. However, printer ink and printer paper costs may be reimbursable when paperless work is not possible. $44,000,000.00 settlement for misclassified stock brokers Read On $7,200,000.00 settlement for cable installers who were not reimbursed for expenses and denied state mandated meal breaks and rest breaks Read On $4,250,000.00 settlement for employees denied state mandated meal and rest breaks and required to pay check cashing fees Read On Who is submitting the receipt? Coping with the outbreak of COVID-19 will require most employers and employees to make significant changes at work. 6201 still requires approval by the Senate and the President to become law. Employers are reminded that laid-off employees are entitled to their final paychecks immediately upon separation. Jathan Janove: You joined Ogletree Deakins in….. ABM Industries, a janitorial service provider, recently agreed to a $5.4 million dollar proposed settlement in Marley Castro, et al. Unscrupulous lawyers are likely trolling the website for potential 60-day violators to sue. The State of California has led the way in defining what employers are required to do when asking officers to bring their personal phones to work. Ogletree Deakins will continue to monitor and report on developments with respect to the COVID-19 pandemic and will post updates in the firm’s Coronavirus (COVID-19) Resource Center as additional information becomes available. What about printer ink costs? Exempt employees must be paid not only for actual work performed but for the entire workweek if any time was worked during that workweek. Id. As such, employers should be sure to implement programs to reimburse employees for such expenses as home internet, cell phone usage, printer ink, paper, and other relevant supplies. Where the employer does not provide adequate equipment but expects the employee to work from home, the employer may be obligated to provide equipment (e.g., computer hardware and peripherals) or provide reimbursement for the equipment. As more employees work from home during the pandemic, expense reimbursement issues may arise and, potentially, evolve into claims underpinning Private Attorneys General Act (PAGA) lawsuits and/or class actions. To the extent employers are requiring employees to clock in/out using a cellphone app on their personal cellphones, reimbursement of a portion of the employee’s cellphone expense may be required. (b) All awards made by a court or by the Division of Labor Standards Enforcement for reimbursement of necessary expenditures under this section shall carry inte… The Solantic Corporation, class action lawsuit, Case No. Employers considering mass layoffs or entire business closures should be aware of the federal and state Worker Adjustment & Retraining Notification (“WARN”) Acts. For example, if a company has 150 employees, a layoff of 50 employees would pass the 50-employee threshold and the 33% threshold. California Labor Code § 2802: Employers’ Duty to Reimburse. PRIVACY   |   NOIs inform employers of the initiation of an I-9 audit and typically require employers to be. California Labor Code § 2802 (“Section 2802”) requires employers to reimburse California employees for “ all necessary business expenditures or losses … The Cochran court held that when an employee must use a personal cell phone for work purposes, the employer must provide reimbursement for a “reasonable percentage of [the] cell phone bills.” In theory, depending on the circumstances, an argument regarding the reasonable rate of reimbursement for expenses related to employee use of internet services, personal computers, or printers could be made. How about internet service? LWDA oversees seven major departments, boards, and panels that serve California … California does not mandate any deadline by which expenses must be submitted for reimbursement or paid. California Labor Code Section 2802 provides as follows: (a) 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 or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed … The fact that the Legislature qualified the term “calamity” with the word “physical” may suggest that the calamity must actually cause damage to the body of employees or customers, or the workplace itself. The federal WARN Act is more forgiving of employers. Laying a Foundation for Diversity & Inclusion: A Case Study. Reimbursement of Employee Expenses. That principle may encourage a judge to find reasons to lower the award of damages. Expand sections by using the arrow icons. A small minority of courts have held that reducing compensation and reducing normal hours worked could constitute a sufficient injury (“adverse employment action”) to support a lawsuit for discrimination or retaliation. 6201, which, among other things, will amend the Family and Medical Leave Act (“FMLA”) to allow 12-weeks of job protection for those who are self-quarantining at home, caring for an infected family member, or even having to watch over young children due to a school closure. Critical information for employers is also available via the firm’s webinar programs. In this regard, there may be uncertainty about whether employers are required to reimburse employees for expenses incurred to perform remote work. The general threshold for both the federal and California WARN Act is the layoff of 50 or more employees within a 30-day period. 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