Wage and Hour Defense Blog

The California Court of Appeal for the First Appellate District recently issued its opinion regarding business-related expenses in Thai v. International Business Machines Corporation. The Court found that expenses incurred by employees in direct consequence of performing their jobs may be reimbursable regardless of whether such expenses are directly caused by the employer.

Paul Thai was employed by defendant and respondent IBM. Thai required, among other things, internet access, telephone service, a telephone headset, a computer and accessories in order to perform the functions of his job. On March 19, 2020, Governor Newsom issued a stay-at-home order that instructed all California residents “[t]o stay home or at their place of residence except as needed to maintain continuity of operations of the federal critical infrastructure sectors” and any other additional sectors later designated as critical. After the order went into effect, IBM directed Thai and thousands of other workers to continue performing their regular job duties from home. Thai and the other IBM workers personally paid for the services and equipment necessary to do their jobs while working from home, and IBM did not reimburse them for those expenses.

In an effort to slow the spread of the 2019 novel coronavirus (“COVID-19”), many employers around the country are encouraging—if not requiring—their employees to work remotely.  Although telecommuting during a public health crisis presents obvious benefits, it also presents employers with unique challenges, such as ensuring compliance with applicable expense reimbursement laws.

Employees working from home may incur any number of expenses – home computers, printers, Internet service, WiFi connections, smartphones and even paper, pens and other office ...

In Newman v. Advanced Technology Innovation Corp., the First Circuit Court of Appeals concluded that an employer's per diem expense reimbursements should have been included when calculating an employee's regular rate and overtime rate.