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Top 10 Reimbursement-Related Lawsuits

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TOP 10 REIMBURSEMENT-RELATED LAWSUITS Inaccurate reimbursements can cost employers hundreds of dollars per employee each month, adding up to thousands of dollars over the course of a year. These costs are significant, but pale in comparison to settlements paid for reimbursement-related lawsuits. The Fair Labor Standards Act (FLSA) requires employers to pay minimum wage, and some states like California have additional employee-protection laws (i.e. California Labor Code section 2802) that require employers to reimburse their employees for all necessary business-related expenses. Falling short of these standards can lead to class action lawsuits, stretching the costs of inaccurate reimbursements into the millions. The 10 following lawsuits are publicly available and showcase the importance of accurate expense reimbursements in today's increasingly mobile workforce: 1. RadioShack paid $4.5 million to settle a lawsuit related to California Labor Code section 2802. An employee in Northern California claimed the company did not reimburse employees for the expenses they incurred when using their personal vehicles for inter-company store transfers. As part of the lawsuit, RadioShack contended that they were only required to reimburse employees for work-related expenses if proper requests were made according to company policy, but the Court disagreed. 2. A court approved $5.1 million for current and former Pizza Hut, Inc. drivers as part of a class action settlement. The plaintiffs argued they were not reimbursed for job-related costs incurred while using their personal vehicles. These costs included , without limitation, making Pizza Hut deliveries. 3. Harte-Hanks Shoppers, Inc. ("Shoppers") paid $6.95 million to settle a class action lawsuit related to California Labor Code section 2802. Shoppers reimbursed their sales representatives for using their personal vehicles by providing a higher base compensation, rather than providing customized expense payments. The courts ruled that adding a lump sum to compensation could satisfy an employer's requirement to reimburse employees, but there must be a method to "apportion" the increased compensation to identify what amount represents reimbursement. 4. Starbucks settled a mileage reimbursement-related class action lawsuit of $3 million with about 30,000 employees. The plaintiff alleged that Starbucks did not reimburse workers for mileage expenses incurred when using their personal vehicles on the job "as a matter of company policy." 5. Of the $23 million Walgreen Co. paid as part of 9 consolidated wage and hour class action lawsuits, $1.5 million was allotted for claims under California Labor Code section 2802. In this case, Walgreen allegedly failed to reimburse employees for business-related expenses, such as travel between stores and for bank deposit runs.

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