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. In California, for example, employers are obligated to reimburse employees for all “necessary expenditures or losses” the employees incur in carrying out their job duties. (CalHR is not responsible for substantiating a teleworker's claim of tax deductions for operation of a home office used to perform State work. When employees pay for work related expenses, the employer has no obligation to pay them back. While the basic distinction is that reimbursements are un-taxed and compensation is taxed, in practice things are more complicated. Fixed and Variable Rate Program with Motus Mileage Capture App Saves Time and Money, Leveling the Playing Field: Recruit Top Talent With a Better Mileage Reimbursement Program, What's Your Fleet Really Costing You? Many workers are confused over employer reimbursement because there is are conflicting policies. 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. We hope the information in this post helps you and your workforce adapt and thrive. with Distinction from Stanford Law School and is a graduate of Brown University (Phi Beta Kappa, Magna Cum Laude). For more information, visit www.ebglaw.com and subscribe to our email lists. App. 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. Recently, a California court of appeal applied Section 2802 to work-related cell phone use. This was true before the pandemic. 5G Advantages: How is 5G Impacting the Technology Landscape? That includes expenses you might incur while working from home. 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 … 4th 1137 (2014), employee Colin Cochran filed a putative class action lawsuit on behalf of customer service managers who were not reimbursed for expenses relating to the work … The world is a different place today than it was a month ago – or even a week ago. This has raised all kinds of new needs and questions for employers of all sectors.  We at Motus believe it’s critical to support our employees through this unknown time, and to empower each member of the Motus family to do their part for the health and strength of our broader community. To ensure that non-exempt employees are paid for all time they are working outside the office, consider taking the following steps: Epstein Becker & Green, P.C., is a national law firm with a primary focus on health care and life sciences; employment, labor, and workforce management; and litigation and business disputes. 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. 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. Additionally, any California business with one or more employees must carry worker’s compensation insurance. (E.g., for every $100 of taxable stipend, $38 is lost to taxes employee and employer.) Some employers are requiring employees who have travelled to or received visitors from mainland China (or other areas with high infection rates) and those with fever or other flu-like symptoms to remain at home for 14 days, while others are instructing half or more, up to their entire workforce, to work remotely until further notice. Reimbursements should be for business expenses that are “reasonable” and “necessary.” So, by way of analogy, if you reimburse someone who drives their personally-owned Porsche for business, but their job simply requires them to get from point A to point B, the added cost of it being a Porsche need not be attributable to the business. Employers are free to reduce their non-exempt employees’ regularly scheduled hours due to temporary closures or reduced demand. Except, that is, in California. Under the California Labor Code, an employer is required to reimburse an employee for all necessary expenditures or losses incurred directly related to the job. 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. Mandatory remote work expenses must be reimbursed in California. Motus Releases 2021 Predictions on Remote Work, Vehicles, Drivers and Business DevicesÂ, BYOD, CYOD and COPE: Differences, Drawbacks and Benefits, Arriver Services: The Rise of Services Delivered to Your Doorstep, The Importance of a Cost of Living Comparison, Vehicle Depreciation in 2020: How the Pandemic Has Affected the Auto Industry. She earned her J.D. 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. The Legislature’s intent is that employees should not bear losses or expenses incurred in the service of their employers. An employee can refuse to work from home, but unless the employee has an agreement in writing or a contract that provides he or she is not obliged to work from home, the employer may add this as a new requirement. We use cookies on this website to enhance your browser experience. Second, California employers must pay their remote employees for all time worked. The remote work expenses that must be covered by employers in states with strict reimbursement laws includes mostly communications devices and plans. In fact, employees throughout California may be owed significant … There is no exception to … 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 … Company cars: If an employer provides employees with vehicles, the employer must reimburse the employees for any expenses they incur while using the vehicles in carrying out their job duties. In response to the COVID-19 pandemic and state and local quarantines, many employers directed employees to work from home. 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? There are a number of laws and regulations that require employers to reimburse expenses that employee incur … California law protects employees who use their own money or equipment at work. If they earn at-or-close-to the minimum wage. What tasks can employees do from home? In order to maintain exempt status, an employee must perform exempt work as his or her “primary duty.”  While federal regulations do not strictly quantify the term “primary duty,”  federal law views time spent as a significant factor, and California law views time as integral to that state’s exemption standard. Remote workers have the same rights as those who work in traditional offices, though some … Insight and Commentary on Wage and Hour Law Developments Affecting Employers. Since many states have no employee business expense reimbursement laws, this baseline protection under the FLSA will apply. Therefore, consult with an employment attorney regarding requests for reimbursement for home office equipment and services from telecommuting employees before rejecting them; … Employees’ Personal Vehicles: If an employee is required to use her personal vehicle for work (other than for a normal c… California employees have a broad right to reimbursement of work-related expenses. Though California and Illinois are silent on when reimbursement must be made, other jurisdictions are not. For employers considering extending their non-exempt employees’ regularly scheduled hours due to increased demand, reduced staff, etc. Employers must also be mindful of state-specific expense reimbursement laws, which may impose additional requirements. 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). But only some states require employers to do so. 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 … If, however, it is mandatory (e.g., the employee Follow the firm on Twitter, Facebook, Instagram, YouTube, and LinkedIn. b. California is in the forefront of states mandating that employers reimburse employees for work-related expenses. As more employees become remote, this inefficiency only multiplies. Remind non-exempt employees that time spent reading and/or responding to emails constitutes “work.”. These include California, Illinois, Iowa, Massachusetts, Montana, New Hampshire, New York, Pennsylvania, and the … Some are even free. That is unless the business adds the complication of collecting receipts from all employees or otherwise substantiating the reimbursement. California labor laws require employers to reimburse employees for all losses and expenditures that are a direct consequence of an employee’s work duties. Work From Home Laws in California. Generally, employers must pay non-exempt employees the applicable minimum wage (or promised wage, if higher) for all hours worked and at least and one-half times an employee’s regular rate of pay for all hours over 40 in a work week, as well as daily overtime in certain states. 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 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. COVID-19, Work-from-Home Policies, and Maintaining Wage and Hour Compliance, 2021 Minimum Wage Increases Set to Take Effect, California Court of Appeals Concludes That California Wage and Hour Laws Extend to Offshore Workers, Time Is Money: A Quick Wage-Hour Tip on … Predictive Scheduling Laws, California Court of Appeal Rules That the FAAAA Does Not Preempt State’s Controversial Independent Contractor Test, Proposition 22 Passes in California, Further Narrowing AB5 –, employment, labor, and workforce management. Even if you have good intentions, missing those reimbursement deadlines could cost you. 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. This list would include phones, phone service, internet service, computers and/or tablets, and any communications or home office expenses that are required. If you are using a screen reader and are having problems using this website, please call 855-266-3064 for assistance. With a few exceptions, an employer can set any work requirements. 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. 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 … Such expenses may include gas, oil, maintenance, repairs, lease payments, and insurance. For example, in New York, employers other than those in the building service and farming industries must pay hourly, nonexempt employees whose workday begins and ends more than 10 hours (including any time off-duty) apart an extra hour of pay at a minimum wage for that day, known as a spread of hour payment. There are a number of easy-to-use timekeeping smartphone applications. Employers requiring employees to work from home during COVID-19 quarantines should promptly review and update their expense reimbursement policies. While an employer may still have to pay overtime upon an employee’s first infraction, if the employee continues to work overtime following discipline, the employer can credibly argue that it did not “suffer or permit” the work, so long as the employer does not simply accept the benefit of the employee’s labor without promptly correcting the behavior and ensuring compliance with the timekeeping policy. Regardless of what you decide to pay, it is advisable to have a mechanism for employees to submit substantiated expenditures that exceed the reimbursement amount. To learn more about cookies and how we use them, please review our privacy policy. Operating in locations throughout the United States and supporting domestic and multinational clients, the firm’s attorneys are committed to uncompromising client service and legal excellence. To that end, employers should instruct non-exempt workers not to work during any unpaid meal breaks and to record accurately all such periods. 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. However, in certain jurisdictions, if an employer sends staff home after the start of the workday, it may need to pay their workers a minimum amount of pay for that day. Reimbursement of Work-Related Expenses. Similar to exempt employees, non-exempt employees paid on a “fluctuating-workweek” basis under the Fair Labor Standards Act (“FLSA”) normally must receive their salary for each workweek in which they perform any work. 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). Remote work expenses traditionally have not been reimbursable under California law because telecommuting and remote work opportunities are not mandated by the employer, as many companies have optional work-from-home programs that are at the … An Employer’s Duty to Reimburse. Mileage reimbursement in California is required. 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. The Court also warned that employee cannot waive the right to be fully reimbursed for their actual expenses: In Cochran v. Schwan’s Home Service , 228 Cal. Posted on November 14, 2018 | Firm News. Please note, use of this product requires a Motus app subscription. California employers must reimburse employees for business expenses that are "the direct consequence" of discharging work duties. Thus, in New York, if an employer sends home an employee for lack of work after they have already arrived, the employee is entitled to a minimum amount of “call-in” pay for the day. 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. Imagine that after weeks of working remotely due to COVID-19, you return to your office only to discover a stack of papers on your desk in a folder titled “requests for reimbursement.” You peer through the contents and find cell phone bills, a receipt for a $750 printer, a bank statement with the account fees … Working from home – once a perk – is now a mandate for millions of Americans. As Chief Legal Officer, Danielle is responsible for all Motus legal affairs and works with strategic business units to drive initiatives that bolster IRS and legal compliance for Motus clients. On a personal note, I am incredibly grateful for the sharing of information, care and unity we are all witnessing during this crisis. Gone are the days of hand-written paper mileage logs and time-consuming expense reports. 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. 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 … And is a different place today than it was a month ago – or even a ago. Expenses that must be reimbursed in California “ work. ” connected and healthy from home offering that help! Instagram, YouTube, and LinkedIn s intent is that employees should bear... Important that employers reimburse employees for all time worked may not have a home.! 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