240 | 2024 Cal-Peculiarities ©2024 Seyfarth Shaw LLP www.seyfarth.com therefore did not qualify under Labor Code section 2802 as “necessary expenditures ... incurred by the employee[s] in direct consequence of the discharge of [their] duties.”374 Commuting expenses. In a 2020 case involving travel time, the Court of Appeal held that the same factors governing whether service technicians are entitled to wages for their commuting time also govern whether they are entitled to reimbursement for their commuting mileage expenses. The ultimate question was whether they were required to transport company tools and equipment in their personal vehicles that were so voluminous that the service technicians were unable to use their commutes for their own personal purposes.375 Remote working expenses. The Covid-19 pandemic has led to an increase in litigation over reimbursement of expenses incurred by employees who work remotely—such as expenses for home internet access, utilities, and the use of home office space. Courts have concluded that the reasonableness of such expenses depends in large part on whether employees had the option to use the employer’s facilities and services such as internet.376 In a recently filed class action, an employee challenged his employer’s reimbursement of only “incremental” home internet costs incurred by remote employees – i.e., only those costs above what employees would normally incur if they were not working from home. The Northern District of California declined to certify the class, citing evidence that many employees had received reimbursements of more than a “reasonable percentage” of their home internet costs, in compliance with Labor Code section 2802.377 As noted above, in 2023, the California Court of Appeal expanded the scope of reimburseable expenses for remote workers.378 A trial court dismissed a lawsuit for reimbursement of business expenses incurred while working from home, on grounds that the Governor’s 2020 stay-at-home order was an “intervening cause,” i.e., the plaintiff could not successfully allege facts that the employer directly caused its employees to incur the business expenses at issue. On appeal, the Court of Appeal reversed, holding that expenses need not be directly caused by the employer in order to be subject to reimbursement. Instead, the analysis depends upon whether the expenses incurred were directly related to the employee’s duties—the statute does not have carve-outs for intervening causes. Direct patient care workers. Legislation enacted in 2020 requires employers to reimburse employees who provide direct patient care—and applicants for such positions—for any expense or cost of employer-provided or employer-required educational programs or training, including residencies, orientations, or competency validations necessary for direct patient care employment.379 Public employers. It remains a grey area whether, and when, public employers must reimburse employees for business expenses. In 2023, the California Court of Appeal held that California State University was not required to reimburse a professor for remote teaching expenses, because applying Labor Code section 2802 would “infringe upon its sovereign governmental powers in two ways.” “It would limit the discretion vested in CSU to establish policies for employee reimbursement for necessary expenses, and would potentially divert limited educational funds from CSU’s core function to pay not only legal judgments but potentially huge additional amounts to outside parties.”380 However, the decision was limited to the facts of the case and does not create a bright-line rule: “We do not hold that section 2802 can never apply to CSU, only that it does not apply in this case because Krug's claim falls squarely within the ambit of CSU’s vested authority to set the terms for employee expense reimbursement.” Further lawsuits against public employers may provide clarity.
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