![]() ![]() ![]() Some workers may be required to bring a cellular phone with them as they work in order to contact the business, clients, or other people associated with the performance of his or her job, when necessary. A common example of a work expense in today's work environment is a phone bill. Secondly, the expenditures must be in "direct consequence of the discharge of his or her duties." California Labor Code section 2802(a). However, the employee would still be entitled to reimbursement for the drill, because the job required use of a drill and the employer did not provide one. If the employee buys a set of power equipment that comes with other tools besides the drill, then the accompanying tools might not be recognized by a court as a reimbursable expense under the statute. For instance, an employee is required to have a power drill to carry out the duties of his employment and the employer does not supply one. First, the employee shall be reimbursed only for "necessary expenditures." These shall include "all reasonable costs, including, but not limited to, attorney's fees incurred by the employee enforcing the rights granted by this section.” California Labor Code section 2802(c). There are two key elements to this statute. Any contract or agreement between an employer and employee waiving the employee’s right to reimbursement for work expenses is invalid. The statute aims to protect California workers by preventing “employers from passing their operating expenses on to their employees.” Gattuso v. ![]() “he broad purpose of Labor Code section 2802 is to require an employer to bear all of the costs inherent in conducting its business and to indemnify employees from costs incurred in the discharge of their duties for the employer's benefit.” In re Acknowledgment Cases (2015) 239 Cal.App.4th 1498, 1506. Originally enacted in 1937, California Labor Code section 2802 mandates that “An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by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." Reimbursable expenses can include mileage for use of the worker’s motor vehicle in the discharge of the employee’s duties, as well as parking, hotel, restaurant, and airfare charges. Email the completed document to The document will be reviewed by Tax Compliance and a determination provided on processing the payment as an independent contractor through Accounts Payable or as an employee through Payroll.Workers in California have a broad right to reimbursement for work expenses. This document should be completed at the time of initial hiring/contracting if there is any question if the payment to the individual should be treated as an employee or independent contractor. Independent Contractor Checklist that will gather facts on the three areas mentioned above. TAMU Tax office has developed an Employee vs. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business? Type of Relationship: Are there written contracts or employee type benefits (e.g.Financial: Are the business aspects of the worker’s job controlled by the payer? (These include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.).Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?.The IRS uses the "Common Law Rules" to gather facts that provide evidence of the degree of control and independence. The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. You do not generally have to withhold or pay any taxes on payments to independent contractors. Generally, you must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee. It is critical that TAMU correctly determine whether the individuals providing services are employees or independent contractors. Employee TAMUS EmployeesĪs a general rule, payments to individuals for services who are currently TAMUS employees or have been employed by TAMUS within the last 12 months must be processed through Payroll and cannot be paid through Accounts Payable. ![]()
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