Archives for August 20, 2023

Recent developments raise questions about post-pandemic voluntary work-from-home agreements and reimbursements for work-at-home expenses. This is our monthly blog providing California employers with wage and hour compliance tips and best practices.

When the pandemic initially hit, most California employers scrambled to continue operations while complying with mandatory stay-at-home orders. Many employers acted quickly to set up employees to work from home and may have overlooked whether that triggered the duty to reimburse for certain business expenses associated with working from home, i.e., internet usage, cell phone usage, personal computer usage, etc. For some employers, it may have been unclear whether the employer was required to pay expenses employees may have incurred by working at home as a result of Governor Newsom’s stay-at-home order. Was the cause the government or was the employer the cause? Recently, the California Court of Appeal unequivocally answered the question – the employer. More specifically, the employees’ performance of work duties for the employer. In Thai v. International Business Machines Corporation, relying on statutory language alone, the Court determined that an employer is required to reimburse an employee “for all necessary expenditures …incurred by the employee in direct consequence of the discharge of his or her duties.” The Court determined that the Governor was not an intervening cause, excusing reimbursement, based on the stay-at-home order. The Court reasoned that what matters is whether an employee incurs expenses “in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer.” The reimbursement statute does not state that the employer must reimburse only for expenses directly caused by the employer. This is an important distinction. The obligation to reimburse turns on whether expenses were incurred due to the performance of the employee’s duties as well as other factors.