Labor Code (Section 2802)
Reimbursement Claim, Penalties & Examples

Labor Code § 2802 is a California law that requires employers to reimburse workers for “all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.” Employers that fail to abide by the law can face legal consequences by the filing of a lawsuit.
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C.L. Mike Schmidt Published by C.L. Mike Schmidt

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What You Need to Know About Labor Code 2802

California's Labor Code Section 2802 requires employers to reimburse employees for all necessary work-related expenses.

If an employer fails to comply, they may face legal penalties, including lawsuits.

This guide covers key aspects of reimbursement claims, penalties, and real-world examples to help you understand your rights and obligations.

What is Labor Code § 2802 Penalties?

A claim for expenses can be filed with a Labor Commissioner who is authorized to investigate the complaint.

Labor Code § 2802 provides for the commissioner to impose civil penalties on the employer for failure to pay.

The penalty for the first failure is $100.00. For each subsequent violation, the penalty is $250.00.

Common Situations Where Employees Need Reimbursement

Many employees incur expenses while performing their job duties. Here are some real-world examples where reimbursement applies:

  • Remote Work Costs: Employees working from home may need compensation for internet, phone, and office supplies.
  • Mileage & Travel Expenses: Employees using personal vehicles for work-related travel should be reimbursed based on the IRS mileage rate.
  • Work Equipment & Uniforms: If an employer requires specific tools, uniforms, or safety gear, they must cover the costs.
  • Continuing Education & Licensing Fees: Certain professions require employees to maintain certifications or licenses, which should be reimbursed if job-related.

Understanding these scenarios helps employees and employers navigate reimbursement obligations efficiently.

Can a Full-Time Employee Deduct Business Expenses?

Deducting business expenses isn't just for individuals who are self-employed. Taxpayers classified as employees may also deduct many of their unreimbursed business expenses.

To deduct workplace expenses, your total itemized deductions should be greater than the standard deduction. You must also meet "the 2% floor," which means the total of the expenses you deduct must be greater than 2% of your adjusted gross income.

Labor Code 2802 Reimbursement Claim Elements

To successfully claim reimbursement under Section 2802, employees must prove:

  1. The expenses were necessary for job duties.
  2. The expenses occurred while performing job duties.
  3. The employer knew or should have known about the expenses.
  4. The employer failed to reimburse the expenses.

For example, if a salesperson is required to drive to multiple locations daily, the employer is responsible for reimbursing mileage expenses based on California’s legal standards.

What Happens if an Employer Fails to Reimburse?

Failure to reimburse expenses can lead to financial penalties. The law states:

  • First violation: A civil penalty of $100.
  • Subsequent violations: A penalty of $250 per violation.
  • Additional damages: Employees may recover interest and attorney’s fees if they win a claim against their employer.

If an employer systematically fails to reimburse workers, employees can file a lawsuit or a complaint with the California Division of Labor Standards Enforcement (DLSE).

Related Article: Is California a Right-to-Work State?

Employee Business Expense Examples

Here’s a breakdown of common reimbursable expenses:

Expense Type Example Potential Cost
Tools & Supplies A mechanic purchasing specialty tools $500+
Work Uniforms Nurses required to wear scrubs $100 - $300 per set
Mileage & Travel Real estate agents driving to showings Based on IRS mileage rate
Cell Phone & Internet Employees using personal devices for work Varies based on use
Professional Dues Memberships in job-related organizations $200 - $500 annually

If an employer refuses reimbursement for these expenses, employees have legal grounds to file a claim.

Statute of Limitations: How Long Do You Have to File?

Employees have three years from the date they incurred an expense to file a reimbursement claim under Labor Code 2802. Missing this deadline can result in losing the right to claim reimbursement.

Expenses That Cannot Be Claimed

Certain expenses do not qualify for reimbursement, including:

  • Personal expenses (e.g., groceries, rent, entertainment)
  • Commuting costs (unless the employer specifically requires travel beyond regular work hours)
  • Political contributions
  • Gifts over $25

Employees should keep detailed records to distinguish work-related expenses from personal spending.

Does the IRS Require Proof of Business Expenses?

Yes. To claim business expenses for tax purposes, employees must provide documentary evidence, such as:

  • Receipts
  • Invoices
  • Canceled checks

Additional evidence may be required for travel, entertainment, and vehicle-related expenses.

Common Mistakes to Avoid

  1. Not Keeping Receipts: Always save copies of receipts and invoices for any reimbursable expenses.
  2. Missing Deadlines: The statute of limitations is three years—do not wait too long to file a claim.
  3. Assuming Your Employer Will Automatically Reimburse You: Some employers require written reimbursement requests before they process payments.
  4. Failing to Track Work-Related Mileage: Use an app or logbook to track mileage for work travel.

Avoiding these mistakes can help ensure you receive the reimbursement you are owed.

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FAQs

Can I Receive Reimbursement for Mileage If I Use My Car for Work?

Yes. California law requires employers to reimburse employees for work-related mileage at the IRS standard rate.

What Are My Rights If My Employer Denies My Reimbursement Request?

Employees can file a complaint with the California Division of Labor Standards Enforcement (DLSE) or pursue legal action with an attorney.

Can I Recover Attorney's Fees If I Sue My Employer Under Labor Code 2802?

Yes. Employees who win reimbursement lawsuits may recover attorney’s fees and court costs in addition to their unpaid expenses.

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If you or a loved one was injured, you should contact our law firm immediately for a free case evaluation. You may be entitled to a settlement by filing a suit and we can help.