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Employers May Be Liable For Work-From-Home Expenses: Thai v. International Business Machines Corp.

Last week the Court of Appeal of the State of California First Appellate District held in Thai v. International Business Machines (IMB) Corp. that employers may be liable for expenses employees incurred while being required to work from home if those expenses were a “direct consequence of the discharge of [the employee’s] duties” even when governmental health and safety orders made working from home mandatory.

In this case, plaintiff Paul Thai sued IBM under the Private Attorneys General Act (PAGA) for reimbursement of costs required to make his home equipped to accomplish his professional duties, such as Internet access, telephone service, a telephone headset, etc. Previously, IBM had provided these items and services to its employees in its in-person office locations. After Governor Newsom’s Executive Order N-33-20, signed in March of 2020, however, Mr. Thai and other employees were directed to perform their regular job duties from home, and consequently had to personally pay for the services and equipment necessary to continue being productive.

In its analysis, the Court explained that “Section 2802 [of PAGA] is designed to prevent employers from passing their operating expenses on to their employees” and that the expenses in this case were indeed operating expenses for IBM itself. This exposed IBM to large penalties for their failure to reimburse employees.

This case is a reminder for all employers to review your practices to ensure that you are providing employees with a reasonable reimbursement and not only just for working from home. Reimbursement is also required in other circumstances such as for an employee’s personal use of their cell phone for business purposes, mileage reimbursement for the business use of an employee’s personal vehicle or even in some circumstances uniform requirements. To learn more about California’s reimbursement requirements and to minimize your legal risk, contact the Employment Attorneys  at Chauvel & Glatt.

The material in this article, provided by Chauvel & Glatt, is designed to provide informative and current information as of the date of the post. It should not be considered, nor is it intended to constitute, legal advice or promise similar outcomes. For information on your particular circumstances, please contact Chauvel & Glatt at 650-573-9500.

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