Remote Work = Increase in Reimbursement Liability?

The effects of COVID-19 are being felt in the courtroom. Aggrieved employees are increasingly filing lawsuits against employers demanding reimbursement for work-related expenses arising from remote work during the pandemic. Alleged expenses include, for instance, internet, computer, phone, printer, and electric bills. Businesses, both big and small, have been hit with these lawsuits.

These lawsuits have arisen for at least two reasons:

1. California law 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” (Labor Code, § 2802); and
2. Employers have failed to adopt remote-work reimbursement policies.

The confluence of (1) and (2) has energized the plaintiff’s bar.

And these lawsuits are no laughing matter. In addition to requiring an employer to reimburse an employee for work-related expenses, these lawsuits potentially subject an employer to liability on a class-wide basis and onerous civil penalties under California’s dreaded Private Attorneys General Act of 2004 (“PAGA”). And it doesn’t help that the California Labor Commissioner has failed to issue COVID-19-specific expense reimbursement guidelines.

Happily, however, the vast majority of lawsuits settle before trial—and a skilled attorney can raise defenses to minimize reimbursement liability. But prevention in law, as in life more generally, is often the best cure—meaning that employers should proactively create and implement reimbursement policies for remote workers (or those who formerly worked remotely). Doing so may save countless dollars downstream.

If you need assistance to further understand how this impacts your business, please contact us at info@mnklawyers.com.

This material is provided for informational purposes only. It is not intended to constitute legal advice, nor does it create a client-lawyer relationship between MNK Law and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material.