California Labor Code 2802: The Work Expenses Your Employer Must Pay Back

California Labor Code 2802 requires your employer to pay you back for necessary expenses you incur doing your job: mileage, the work share of your phone bill, tools and required equipment. The duty is automatic, it is not a company courtesy, and you cannot sign it away. An award carries interest at the civil judgment rate from the day you spent the money, and your reasonable attorney's fees form part of what you recover.

At a glance

• Section 2802 covers what you spend doing your duties, or what you spend following your employer's instructions. Those are two separate triggers.
• A company expense policy can decide how you are paid back. It cannot decide whether.
• Any agreement to waive these rights is void under Labor Code 2804, including one you signed.
• If work use of your personal phone is required, your employer owes a reasonable share of the bill even when your plan is unlimited and the work calls cost you nothing extra.
• The IRS mileage rate is one accepted method, not a legal floor. You can challenge the amount, and showing the shortfall is your job.
• Interest on an award runs from the day of each expense, well before you ask for anything.
• Reasonable attorney's fees form part of what you recover where a claim succeeds, which can make a small claim worth a lawyer's time.
• The deadline depends on the route you take. It is commonly three years, and it can be four or as short as one.

What does Labor Code 2802 actually require?

The operative words are in subdivision (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 duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful.

Two details in that sentence do a lot of work.

First, the statute says indemnify, not reimburse. The job is to make you whole for money you should never have been out of pocket for. It is not a benefit a manager approves.

Second, there are two triggers, joined by "or". An expense counts if you incurred it in direct consequence of doing your duties. It also counts if you incurred it obeying your employer's directions, so nobody need have ordered the purchase. The second trigger carries one limit on its face: a direction you believed at the time was unlawful is not indemnified.

The section has four subdivisions:

• (a) creates the duty to indemnify necessary expenditures or losses.
• (b) adds interest at the same rate as civil judgments, and says it "shall accrue from the date on which the employee incurred the necessary expenditure or loss". It refers to awards made by a court "or by the Division of Labor Standards Enforcement", which confirms the Labor Commissioner can award reimbursement too.
• (c) defines "necessary expenditures or losses" to include "all reasonable costs, including, but not limited to, attorney's fees incurred by the employee enforcing the rights granted by this section".
• (d) lets the Labor Commissioner issue a citation against an employer, or a person acting on the employer's behalf, who violates reimbursement obligations. Amounts recovered go to the affected employee.

The current wording took effect on January 1, 2016, under Assembly Bill 970, and has not been amended since.

Which work expenses does your employer have to pay back?

Three things about that last row. On fees, section 2802.1 is stronger than 2802: a court shall award a prevailing plaintiff reasonable attorney's fees and costs, instead of folding them into the sum recovered. It is narrow on who it reaches: employees and applicants providing direct patient care for a "general acute care hospital", as defined in section 1250 of the Health and Safety Code, and nobody else. And it is narrow on what it reaches: residencies, orientations and competency validations count, but subdivision (a)(2) expressly excludes the license, registration or certification you need to practice at all, and any training you took voluntarily.

Does your employer have to pay for your cell phone?

Yes, if work use of your personal phone is required. Cochran v. Schwan's Home Service settled this in 2014, removing the defenses employers relied on.

The Court of Appeal held that the employer must pay some reasonable percentage of the bill. Critically, it does not matter:

• whether your plan is limited or unlimited;
• whether the work calls cost you anything extra;
• who actually pays the bill, which means a plan in a family member's name does not defeat the claim;
• whether you changed your plan because of work.

The court put liability in a single sentence: required work use of a personal phone, plus no reimbursement. The percentage is the harder part, and it comes after liability. Cochran left that calculation to the parties and the trial court case by case.

How much is work mileage worth, and is the IRS rate the law?

The IRS standard business mileage rate is the figure most employers use, and it changed part way through this year. From July 1, 2026 through December 31, 2026 the business rate is 76 cents per mile. From January 1, 2026 through June 30, 2026 it was 72.5 cents. A claim spanning the year is calculated at both rates.

Here is the part most pages get wrong. The IRS rate is not a statutory minimum. In Gattuso, the California Supreme Court treated it as a convenient predetermined amount, and quoted the state labor agency's view that the figure is a national average and not dispositive of what an employee actually spent.

Gattuso names three permissible methods for vehicle expenses: the actual expense method, a mileage rate, or a lump sum. Whichever your employer picks, you must be allowed to challenge the amount, and a shortfall has to be made up. Two limits come with that, and both are Gattuso's own. The comparison is yours to make: the duty to top up is triggered only if the employee can show the payment fell short of the expenses necessarily incurred. And the test is what you necessarily spent, which the court said depends on the reasonableness of your choices, vehicle choice being its own example. The state labor agency takes a similar line, having opined that paying the IRS allowance satisfies the obligation absent evidence to the contrary. So the cents-per-mile figure is a starting point rather than the answer, your records are what turn it into a number, and unusually high running costs are worth raising without being automatically recoverable.

Which miles count is only partly settled. Travel your employer requires on company business is covered, and so is driving between job sites and out to clients. Gattuso puts that much beyond argument. The ordinary commute is a different question, and it remains unsettled in California. The only published decision to reach it, Oliver v. Konica Minolta Business Solutions U.S.A., Inc. (2020), Court of Appeal, Sixth Appellate District, refused to decide whether requiring a personal vehicle is by itself enough to trigger a mileage reimbursement duty, and its ruling rode instead on the employer's concession that paid commute time meant reimbursable commute mileage. The enforcing agency has published no position on it either: "commuting" appears nowhere in the 352 pages of the Division of Labor Standards Enforcement's manual. That double silence is what leaves the question open. The two rules people quote against it answer different questions: the IRS treats commuting as non-deductible, a tax rule, and commute time is generally not compensable, an hours-worked rule. So log the first and last legs of your day separately, and put the commute question to a lawyer before you fix on a total.

What if you work from home?

This is the newest ground, and the leading authority is Thai v. International Business Machines Corp., decided by the Court of Appeal in July 2023 and certified for publication.

IBM argued that the real cause of those home office costs was the Governor's COVID-19 stay-home order rather than any decision of its own, so the order broke the chain of causation. The court rejected it: section 2802(a) contains no tort-style proximate cause element, and reading one in is not rooted in the statute's language.

One honest caveat. Thai reversed the judgment entered after the trial court sustained IBM's demurrer, a ruling at the pleading stage on whether a claim may proceed at all. The court held it could, and sent the case back. That was not a finding that IBM owed any sum, and IBM never disputed that these were the kinds of expenses it covered at the office. Any article telling you a court "ordered IBM to reimburse its staff" is overstating what happened.

The takeaway is still significant. If your employer told you to work from home and you paid for the internet, the desk, the monitor or the extra power, a public health order pushing that decision is not a defense.

Can your employer fold expenses into your salary?

Sometimes, but only on strict terms, and this is where employers most often fall short.

Gattuso held that an employer may discharge the section 2802 duty through increased base salary or higher commission rates. It attached two conditions, and both have to be met:

1. The employer must establish a means to identify which portion of the pay is expense reimbursement rather than wages.
2. That identified portion must fully cover the expenses the employee actually and necessarily incurred.

Gattuso also requires an employer using this method to communicate to employees the basis for apportioning the increased pay between payment for labor performed and expense reimbursement. In a footnote, the court added that such employers should also identify the two amounts separately in the wage statement required by Labor Code 226(a), the itemized pay stub. What it did not hold is that section 226(a) bars combining the two payments: the employees argued that, and the court rejected it. So if your employer says your salary already covers your costs, ask for the apportionment method and keep the answer. No answer and nothing on the stub is a gap worth putting to a lawyer.

Can you sign away the right to be reimbursed?

No. Labor Code 2804 has been on the books since 1937 and says that any contract or agreement, express or implied, by which an employee waives the benefits of this article of the Labor Code, the article that contains section 2802, "is null and void".

That covers the acknowledgment in an offer letter, the expense policy in the handbook you initialed, and the line saying a fixed monthly stipend is accepted as sufficient. Gattuso confirmed it: an employer and employee may agree on a mileage rate or a lump sum, but section 2804 stops that agreement from waiving full reimbursement or barring a challenge to the amount.

Ready to talk it through?

If you have been carrying work costs yourself, a short conversation is usually enough to tell whether it is worth pursuing. Contact the Law Offices of Jonathan J. Delshad for a review of your situation.

How long do you have to claim unreimbursed expenses in California?

There is no single number. The answer depends on the route you take and how the claim is framed, and deadlines can run earlier than you expect, so this is worth confirming early rather than late.

One caution about the three-year figure. It rests on the text of Code of Civil Procedure 338(a) and the Labor Commissioner's published guidance, and no California appellate decision squarely holds that it applies to a section 2802 reimbursement claim.

There is a further theory, and it is not a settled route. Where a failure to reimburse amounts to a business practice, the same money is sometimes pleaded as unfair competition under Business and Professions Code 17200, which carries four years under section 17208; Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163 held that any unfair competition claim gets those four years. But Cortez was about unpaid wages, and its reasoning turns on withheld wages being the employee's own property, while the Supreme Court has treated expense reimbursement as conceptually distinct from wages. Whether unreimbursed expenses support that recovery is not something this page can settle, the relief is discretionary even where the theory works, and the route carries no fees of its own. That makes it a lawyer's question rather than extra time you can rely on.

Which window applies to you is exactly the sort of question to put to a lawyer before it closes. If any part of your claim is approaching a deadline, contact the Law Offices of Jonathan J. Delshad before it runs rather than after.

How do you actually get the money back?

1. Write down every expense, with dates and amounts. Receipts, a mileage log that separates business miles from personal ones, phone bills, the order confirmation for the monitor. Interest on an award runs from the date of each expense, so the dates are worth money.
2. Read your pay stub, and ask for the formula. If your employer says your salary or commission already covers expenses, Gattuso entitles you to know the method used to apportion it. Keep the answer, or the absence of one.
3. Ask in writing, and name a figure. Email is fine. State the period, the categories and the total, and keep a copy. Courts applying section 2802 have looked at whether the employer knew or had reason to know of the expense and failed to reimburse it, so the record of when your employer knew matters.
4. Set a reasonable deadline and keep the reply. A refusal in writing, or a partial payment with no explanation, is useful evidence. If you are still employed, how and when you raise this is worth a conversation with a lawyer first.
5. File a wage claim with the Labor Commissioner, or bring a civil claim. The Labor Commissioner route runs from an online, mail, email or in-person filing, through an investigation, usually a settlement conference, then a hearing before a hearing officer if the conference does not resolve it. The attorney's fees provision in subdivision (c) is what makes the civil path realistic for an ordinary employee.
6. Talk to an employment lawyer before the deadline. Which window applies, and which route is stronger on your facts, are the two questions worth professional input.

If you were paid on a 1099 and treated as a contractor, you are not automatically shut out. The Labor Commissioner's Office states that it has no jurisdiction over genuine independent contractors, but it will accept a wage claim, and it may hold a hearing on whether the worker was misclassified in the first place.

What is a section 2802 claim worth?

Three things change the arithmetic, or the odds of collecting it.

Interest from the date of each expense. Subdivision (b) sets interest on an award at the civil judgment rate, running from the date the expense was incurred. On two or three years of monthly shortfalls, that is not a rounding error.

Attorney's fees inside the recovery. Subdivision (c) defines the recoverable "necessary expenditures or losses" to include the reasonable attorney's fees you incur enforcing the section. That is why a claim measured in a few thousand dollars of expenses can still be worth a lawyer's time where it succeeds: the fees are part of the sum claimed, instead of a separate bill set against a small principal. They ride on the recovery, so what you are exposed to if a claim fails is a question to settle with any lawyer before you start.

Personal liability for the people who decided it. Not a feature of section 2802 itself, but it travels with these claims: Labor Code 558.1 names section 2802 in its list. An owner, director, officer or managing agent who violated, or caused the violation of, the reimbursement duty can be held liable as the employer.

Frequently asked questions

Does Labor Code 2802 cover working from home?

Yes. In Thai v. International Business Machines Corp. (2023), the Court of Appeal held that section 2802(a) has no proximate cause element, so the Governor's COVID-19 stay-home order was not an intervening cause that relieved the employer of the duty to reimburse home office expenses. The court reversed a dismissal at the pleading stage and allowed the claim to proceed.

Does Labor Code 2802 require mileage reimbursement?

Section 2802 requires the necessary cost of business use of your vehicle to be covered. It does not name a rate. Gattuso permits three methods: actual expense, a cents-per-mile rate, or a lump sum. The IRS business rate is 76 cents per mile from July 1, 2026 through December 31, 2026, and was 72.5 cents for the first half of 2026, but that rate is an accepted method rather than a statutory floor.

Which miles count for mileage reimbursement in California?

Travel your employer requires on company business is covered, including driving between job sites and out to clients. The ordinary commute is unsettled in California. The only published California decision to reach the question, Oliver v. Konica Minolta Business Solutions U.S.A., Inc. (2020), declined to decide it, and the Division of Labor Standards Enforcement's manual does not address commuting anywhere in its 352 pages. The IRS non-deduction rule is about tax, and the rule that commute time is generally not compensable is about hours worked. Neither answers the Labor Code question, so raise the first and last legs of your day with a lawyer.

Does Labor Code 2802 require cell phone reimbursement?

Yes, where work use of your personal phone is required. Cochran v. Schwan's Home Service requires a reasonable percentage of the bill, on limited and unlimited plans alike, whether or not the work use cost you anything extra, and regardless of whose name is on the account.

How far back can I claim?

Commonly three years, based on Code of Civil Procedure 338(a) and the Labor Commissioner's filing guidance, though no California appellate decision squarely holds that this is the period for a section 2802 claim. A written promise to reimburse can extend it to four years under Code of Civil Procedure 337(a), and penalty claims can be limited to one year. Confirm it before assuming you still have time.

Does it matter that I never submitted an expense report?

It matters, and the safe course is to put it in writing now. Section 2802(a) is not written as a duty that starts only once a form is filed: it attaches to necessary expenditures incurred in doing the job or in obeying the employer's directions. But courts applying it have looked at whether the employer knew or had reason to know of the expense and failed to reimburse, so a claim is stronger where the employer was told. If you have been carrying costs quietly, start with a written request naming the period and the amount.

The Law Offices of Jonathan J. Delshad is a Los Angeles based employment law firm representing employees across California in wrongful termination, discrimination, retaliation, harassment, and wage and hour matters. Representing employees is the core of the firm's practice. Mr. Delshad serves as Editor-in-Chief of the California Wrongful Termination Law Review and trained at Latham & Watkins. Recognition includes Super Lawyers (2022 to 2027), Best Lawyers (since 2017), and an Avvo 10.0 "Superb" rating. Reviewed for California employment law accuracy. Last updated: September 22, 2026.

Attorney advertising. This article is educational only and is not legal advice. Reading it does not create an attorney-client relationship, which exists only under a signed engagement agreement. Every case is different, and outcomes depend on the specific facts. Deadlines can run early, so consult a lawyer promptly about your situation.