On July 11, 2023, the California Court of Appeal in Thai v. IBM held that whether an employer is obligated to reimburse expenses incurred by an employee working from home turns on whether the expenses were a direct consequence of the discharge of the employee's job duties, not on whether the expenses were directly caused by the employer. This case is important for all employers whose workforce suddenly began working from home as a result of the COVID-19 pandemic, and employers who continue to permit employees to work from home today.
California Court of Appeal Clarifies Employer's Obligation to Reimburse Expenses Depends on Whether They Were a Direct Consequence of Job Duties, Not Proximately Caused by Employer
Sheppard Mullin Richter & Hampton LLP
Read the ruling in Thai v. IBM.
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California Labor Code section 2802 ("Section 2802") requires employers to reimburse employees for "all necessary expenditures or losses" they incur as a "direct consequence of the discharge of … [their] duties, or … [their] obedience to the directions of the employer."
Court of Appeal Clarifies Employers' Expense Reimbursement Obligations for Pandemic-Related Remote Work
Proskauer | Jul 2023
The issue in Thai v. International Business Machines Corp. was whether International Business Machines Corporation (IBM) was obligated to reimburse its employees for computer, internet, and phone-related expenses they incurred as a result of working at home during the COVID-19 pandemic, where working at home was required not by IBM but by Governor Gavin Newsom's stay-at-home order.
California's Pandemic Stay-at-Home Order Didn't Excuse Employer's Obligation to Reimburse Necessary Work-From-Home Expenses
Morgan Lewis | Jul 2023
The IBM decision is a stark reminder that the law does not consider whether the employer requires or even requests the expenditure. Instead, employers must reimburse employees for any expenditure that is required in order for them to perform their job responsibilities.
Reimbursing California Remote Employees' Expenses: Obligation Confirmed
Davis Wright | Jul 2023
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