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California Labor Laws and How They Put Your Organization at Risk

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2 CALIFORNIA LABOR CODE SECTION 2802(A) LOOKS SIMPLE ENOUGH: WHAT CA 2802 SAYS WHY SECTION 2802 MATTERS (a) 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 du es, or of his or her obedience to the direc ons of the employer, even though unlawful, unless the employee, at the me of obeying the direc ons, believed them to be unlawful. The simplicity of the language makes Sec on 2802 powerful and significant. Because California's reimbursement statute does not iden fy specific types of business expenses, a broad array of expenditures could fall under the scope of reimbursements. Sec on 2802 has been on the books since 1937. Cases invoking Sec on 2802 focused on reimbursement for job-related tools and equipment, not mileage, according to an analysis by law firm Seyfarth Shaw LLP. That changed 70 years later in Gattuso v. Harte-Hanks Shoppers. In this ruling, the California Supreme Court made clear that automobile expenses are included in the "necessary expenditures" covered by Sec on 2802, and that employees should expect to be reimbursed for driving in pursuit of business. Sec on 2802 goes on to make non-compliance par cularly costly. Subsec on (b) says that successful plain ffs will receive damages with accrued interest from the date of the original expenditure, and subsec on (c) requires employers to reimburse costs associated with a successful lawsuit, including a orney's fees. Furthermore, Sec on 2804 voids any waiver or agreement designed to circumvent the required reimbursements. These provisions and the added costs for failing to properly reimburse employees offer employers a clear path: reimburse employees in full for any job-related mileage.

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