Photo by Minh Pham 

Reimbursements for reasonable business expenditures

While allowing employees to work from home is an option many employers may consider as a prophylactic measure to avoid the spread of the virus, requiring them to work from home triggers the labor code. California Labor Code section 2802 requires employers to reimburse employees for “all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer.”

Reimbursement obligations likely are not triggered if the employer simply provides employees with the option to work from home, but if an employer requires an employee who does not typically work from home to do so, the employer may have to reimburse the employee for certain reasonable expenditures. For example, if the employer requires an employee to work from home and that employee must be reachable if they are working from home, that employee may need to be compensated for the use of their personal phone under Labor Code section 2802. Similarly, if an employee must log in remotely on their home internet in order to complete work, employers may need to reimburse the employee for at least a portion of the home internet plan.

However, if an employee voluntarily self-quarantines, employers arguably do not need to pay for any marginal costs as a result of the employee’s remote work because the employer did not require that the employee perform any work outside of the workplace using personal devices or services.

Effectively Track All Hours Worked and Comply with All Wage and Hour Requirements

California’s wage and hour laws will apply equally to nonexempt employees working remotely, which means that having an employee who works remotely does not excuse your obligations under California’s wage and hour laws. When your nonexempt employees work remotely, you must:

  • Have measures in place to maintain accurate records of the employees’ hours worked;
  • Ensure they are taking required meal and rest breaks;
  • Pay for any overtime hours; and
  • Make sure they’re not working off the clock.

Because remote employees aren’t supervised in the same way an on-site employee is, there can be some added challenges to monitoring required meal and rest breaks. Having a clearly written meal and rest break policy, however, can help combat those challenges. In addition to your standard meal and rest break policy, your telecommuting policy can reiterate that employees are expected to take their uninterrupted, off-duty meal and rest breaks.

You also need to have an effective method for tracking all hours your nonexempt employees work and pay for any overtime. As a reminder, California law requires all overtime hours to be paid, even if that time was not approved. Overtime pay is calculated at 1.5 times the employee’s regular rate of pay for all hours worked beyond eight hours in a workday or 40 hours in a workweek.

Additional Considerations

Keep in mind that if you have remote employees working outside the state in which your company’s office is located, the law in the state where the employee works is, in most cases, the law that covers that employee. For example, and employee working at their home in Nevada for an employer headquartered in California is generally governed by Nevada employment laws.

If, however, the out-of-state employee travels to California to work for a California-based employer, California’s overtime laws apply to any work conducted within the state longer than eight hours in a day or 40 hours in a week. Given the current isolation, shelter-in-place and quarantine directives, most travel likely will be restricted, but in instances where it isn’t, it’s important to remember this overtime requirement.

Similarly, for employees outside the city or county where your office is located, make sure you monitor and comply with local employment-related ordinances in the employee’s location. For example, many cities and counties have enacted minimum wage and paid sick leave ordinances that could affect employees working in a remote location.

It’s also important to keep workers’ compensation and workplace injuries in mind, as employers are required to maintain workers’ compensation insurance for all employees, whether they work on site or remotely. Under workers’ compensation, if an employee suffers an injury on the job, you are liable for the employee’s temporary disability benefits, medical expenses and possibly a permanent disability based on the injury’s long-term effects. Remote workers, whether they’re permanently remote or only temporarily to help slow COVID-19’s spread, enjoy the same protections as employees working in the office; they’re eligible for workers’ compensation if an injury arises out of and in the course and scope of employment. Having a clear definition of an employee’s normal working hours and job duties can be instrumental in evaluating whether a particular injury was work-related.

Employers also must be mindful of the various notices required under federal, state or even local law — such as industry-specific wage orders and state and local minimum wage notices. An employer’s posting requirements must still be met, even in situations where an employee works remotely from home.

If you have an employee who works 100 percent from home and never reports to a headquarters or other location, then you should mail hard copies of those notices to the employee’s home, where they can be posted. Otherwise, if you have an employee who does report to a physical location some of the time, ensure that the appropriate notices are posted and visible in that particular location.

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