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<!–:en–>BUSINESS EXPENSE REIMBURSEMENTS<!–:–><!–:ja–>経費の払い戻し<!–:–>

March 28, 2011

Although most companies typically maintain their own policies, procedures, special forms, filing deadlines and other requirements for employees to receive business expense reimbursements, in California employees have the legal right to be reimbursed for their work-related expenses.

In a recent 2009 lawsuit, Stuart v. RadioShack, a former employee filed a class action lawsuit against the company claiming he and other employees were not reimbursed for all work-related expenses. RadioShack  argued that the employee didn’t follow internal company procedures for requesting reimbursement including filing expense reimbursements on time. Therefore, the Company, as stated in its procedural guidelines and Handbook, opted to not reimburse the employee for not meeting the requirements.

A U.S. District Court in California, on hearing the case, rejected RadioShack’s arguments and held that the employee expense reimbursement rights cannot be waived. The court further held that as long as an employer knows, or should know, that employees are incurring work-related expenses, it is the employer’s duty to take steps to make sure that employees are reimbursed.

Although this case has not been heard yet in the California Supreme Court for a further ruling, it is most likely that the U.S. District Court’s logic will be followed by California Courts. As a practical matter, employers should consider the following:

  1. Employers should no longer refuse to pay “late” expense reimbursements requests from employees who have submitted their expenses later than the company’s deadline.
  2. Employers should closely monitor their employees activities that result an employee incurring work-related expenses and make sure the employee has receipts and uses the reimbursement request forms.

Employers should obtain written verification from departing employees that they have requested reimbursement for all work-related expenses before leaving the company.

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