Every wage claim I see includes a claim for unpaid expenses. California law requires employers to reimburse employees for expenses incurred during employment, even if those expenses were not pre-approved. Such expenses often include travel costs (such as hotels and meals), mileage for car travel, telephone usage, data plans, supplies, and the like.

There are two related questions that often arise in my practice, and neither has a clear answer.

First, what expenses are covered?

  • The employee uses a bicycle to run work errands. How is the employer supposed to reimburse the employee for bike mileage or wear-and-tear?
  • The employee stops at the post office or UPS drop something off on the way home; is that mileage reimbursable if on the way home anyway?
  • The employee purchases a headset for her own office use, but she did not get the required approval for the purchase, yet she has already used it and insists she needs it.
  • The employee uses her own smartphone to check her work schedules, or her Internet to log her time from home, or her cell phone to take calls from her supervisor — is any portion of her monthly data pack or minute allowance reimbursable? How much personal phone or computer usage time crosses the de minimis threshold and must be reimbursed?

Second, how can an employer protect itself from wage claims involving expenses?

  • The first step is a handbook policy clearly setting forth that employees should get all expenses pre-approved and submit them for reimbursement within 30 days. Consider adding some examples of non-obvious types of expenses that might be reimbursable, such as phone minutes used for work, or a portion of a data package if employees are expected to use their own devices.
  • Another step is to prevent employees from running errands or making stops on the way to or from the office (even if they offer and are trying to be helpful). This is especially important for non-exempt employees, because not only will you have an expense problem but you will also have an “off-the-clock” and possible overtime problem.
  • On the issue of technology or device usage, a clear policy setting forth expectations of any Bring Your Own Device (BYOD) protocol, including what portions of device usage are expected and reimbursable, is critical.
  • A final step is raising the issue of expense reimbursement at the exit interview (or on your exit checklist) and confirming that all expenses have been submitted for reimbursement.

With these steps at least the employer has a clear policy, has thoughtfully anticipated issues, and if the policy is not followed, has some defense to a claim for unpaid expenses.