Remote work has well-recognized benefits (no commute) and drawbacks (disappearing boundaries between personal and professional life), but one little-commented side effect of the "WFH" lifestyle is the cost associated with being at home throughout the work week.
From skyrocketing utility payments to additional costs for phone and internet use, many remote workers are now shouldering the expenses that their employers used to pay. But are employees really responsible for expenses incurred while working from home?
In California, at least, the answer is no. California is one of about two dozen states with laws requiring employer reimbursement of employee work expenses—and one of only a few states to make clear that those laws apply to remote work. (Cal. Lab. Code § 2802 (2022).)
In fact, 2022 saw a spate of California lawsuits by remote workers demanding reimbursement from large employers such as Amazon, Visa, and Bank of America for work-from-home expenses incurred during the pandemic.
As these lawsuits continue to make their way through the courts, the question for California workers remains: Which of your WFH expenses must be reimbursed by your employer?
Under California law, your employer must reimburse you for any "necessary" expenses incurred while you're working from home.
Expenses are considered "necessary" if they're required for you to do your job. This is true whether you're working in the office (or other worksite) or working remotely.
For example, if your job involves scientific research, then it might be necessary for you to pay for a subscription to an online science journal; your employer would have to reimburse you for that expense. If, on the other hand, you feel you are a more effective leader if you stay abreast of developing news, but doing so is not part of your job duties, then subscriptions to various newspapers are not "necessary" for you to do your job and would not be reimbursable.
California courts have also found that when it comes to monthly expenses such as cell phone or internet bills, "necessary" expenses generally include a "reasonable percentage" of such costs.
For example, one court found that when an employee had to use his personal cell phone to make work calls, his employer was required to reimburse him for a portion of his phone bill even though the employee did not incur any additional expenses because he had an unlimited data plan. The court found that any other interpretation would result in an unfair windfall to the employer.
While the determination of whether an expense is "necessary" varies depending on the circumstances of a particular case, generally speaking, California employees who work from home are likely entitled to reimbursement for the following expenses:
Although the law regarding these expenses is not yet decided, remote California workers may also be entitled to reimbursement for:
Employers and courts are more likely to find that expenses incurred while working from home are "necessary" if remote work is required or encouraged by your employer.
However, if your organization has returned to in-person work, but you choose to work from home, it's less likely that your business expenses will be seen as "necessary"—as you could have avoided them by working from the office or other worksite.
While many employers require you to submit expense reports or other paperwork in order to be reimbursed, California courts have held that reimbursement requests aren't necessary if your employer has reason to know about the expenses you're incurring.
In Williams v. Amazon, a high-profile case arising from the pandemic, a California software development engineer alleged that Amazon failed to properly reimburse its employees for expenses incurred while they were working from home during the COVID-19 pandemic (2022).
Amazon filed a motion to dismiss the plaintiff's lawsuit, arguing that it didn't have to reimburse its employee's expenses because he hadn't submitted reimbursement requests.
But in June 2022, the court denied Amazon's motion to dismiss, finding that Amazon knew or should have known that its employees who work from home incurred basic costs related to remote work—including expenses related to internet, electricity, and physical space.
In overruling Amazon's motion to dismiss, the court found that the lawsuit could move forward, although it has not yet decided the ultimate question of whether Amazon must actually reimburse employees for their WFH expenses.
If your employer has failed to reimburse you for expenses you incurred while working from home, consider raising the issue with your employer. Because many companies are still adjusting to the "new normal" of remote work, they might be unaware of their legal obligation to reimburse employees for necessary expenses. For that reason, it might be helpful to refer your employer to the relevant law.
If your employer refuses to meet its legal requirements, it might be worth contacting an employment attorney to discuss your legal options.