CA Statute Permitted Payment Of Increased Wages To Satisfy Employer's Obligation To Reimburse Employees For Expenses
The
Supreme Court of California has held that an
employer, whose sales employees used their own cars, could satisfy its
obligation, under the California Labor Code provision requiring employers to
indemnify employees for costs necessarily incurred in the discharge of their
duties, by paying the employees enhanced compensation in the form of increases
in base salary or commission rates, provided: (1) the employer established a
means to identify the portion of overall compensation that was intended as
expense reimbursement; and (2) the amounts so identified were sufficient to
fully reimburse the employees for all expenses actually and necessarily
incurred. Neither the statute defining "wages" nor the employer's statutory
obligation to itemize compensation payments precluded such a method of
reimbursement.
Gattuso v. Harte Hanks
Shoppers, Inc.