Employees Reimbursed Even When Not Following Company Policy

California law mandates employers reimburse all employees for any “work-related expenses.” Mileage, travel expenses, cell phone usage costs, and the cost of maintaining uniforms are examples of work-related expenses. The costs of defending a lawsuit if an employee is sued for work-related conduct (and like matters) may also be a reimbursable expense. The further states employees cannot waive the right to be reimbursed for work-related expenses.

According to a recent decision of the U.S. District Court for the Northern District of California, the law means even if employees don’t turn in expense reports in compliance with company policy, employers nonetheless must reimburse them.

Moreover, the court determined employers are obligated to reimburse work-related expenses even when employees don’t follow through with a formal reimbursement request if the employer knows or has reason to know an expense was incurred.

To encourage employees to submit expense reports in a timely manner and ensure all expenses are reported, employers can implement two steps.

1. Make sure your expense reimbursement policy mandates employees to report all work-related expenses, no matter how small the expense may be.

2. Inform employees if they do not submit expense reports in a timely way, lack of following company policy is factored in during their overall performance evaluation, and they may be subject to discipline. (workersxzcompxzkit)

(Although employers must reimburse employees for expenses even when company policy is not followed, employers are allowed to discipline employees for not following company policies. However, this is a general discussion and you should check with corporate legal counsel when instituting any policy.)

To avoid claims for unreimbursed expenses following an employee departing the company, ask employees at the time of separation to sign a written document confirming all work-related expenses were reimbursed.

Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers' Compensation costs, including airlines, health care, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He can be contacted at: [email protected] or 860-553-6604.

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.