The federal Fair Labor Standards Act (FLSA) generally does not require that an employee be reimbursed for expenses incurred while working from home. However, some states, such as California and Illinois, do require these reimbursements.
A recent decision from the California Court of Appeal First District sheds some light on employee reimbursements for costs incurred while working from home. In Thai v. International Business Machines Corporation (2023) 93 Cal.App.5th 364, The Court of Appeal clarified that employees working from home may be entitled to reimbursements for expenses incurred while carrying out their work duties, regardless of whether there was a stay at home order in effect.
California Work From Home Reimbursement Laws Explained
As much of the world, including California, has shifted to working from home more over the last few years, the question of how employee reimbursements are handled has been a new frontier in the law.
California is a state with strong employee protections, including Labor Code 2802, which entitles California employees to reimbursements for necessary expenses incurred while working. While there has been no doubt that California employees have a right to be reimbursed for mileage incurred while driving on the job, or for cell phone use when it is a necessary component of their work, increased work from home has created new areas that are at issue for whether or not employees should be reimbursed by their employer. Notably for the employee in Thai v. International Business Machines Corporation, “[t]o accomplish his duties, he required, among other things, internet access, telephone service, a telephone headset, and a computer and accessories.”
Mr. Thai brought a case in the San Francisco Superior Court, and as the court explained, “at issue in the present case are operating costs incurred by employees in performance of their actual work duties for IBM at home.” In reinforcing California’s strong protection of workers, the court of appeal went on to state that, “[e]ffectively, section 2802(a) allocates the risk of unexpected expenses to the employer, which is consistent with the Legislature's intent in adopting the statute.” Thus, the burden of expenses like internet access, telephone, headsets, computers, accessories, is on the employer in instances where these items are used by the employee for their work, regardless of whether it is done in the office or at home. Ultimately the court affirmatively stated, “in the present case there is no dispute that the types of expenses at issue are ones for which IBM is liable. Instead, the only question is whether the circumstance that the expenses were being incurred at employees’ homes following the March 2020 order changes IBM's reimbursement obligation. For the reasons already given, the answer is no.” In other words, IBM was required to reimburse the employees for the expenses incurred as a result of their working from home regardless of whether or not they were ordered to work from home during the pandemic.
What Does This Mean For California Remote Workers?
If you are an employee that works from home in California, you may be entitled to reimbursements for your expenses incurred as a result of your work. If you are an employee working from home in San Diego, Los Angeles, San Francisco, San Jose, Sacramento, Fresno, or anywhere else in the state of California, and you are not being reimbursed for your expenses incurred as a result of working remotely, then you may be entitled to compensation.
Contact Nichols Law Firm today for a free consultation about your rights to reimbursements. Our exceptional San Diego employment attorneys can analyze your situation and determine whether there are employee reimbursements that you are missing out on, or if there are other wage and hour issues with your employment.
