What are your rights?

How do you deal with an unpaid reimbursement for work-related expenses?

Well, do you live in California? No?

Does your contract stipulate that the employer must reimburse you, or does the company have some kind of employee expenses reimbursement policy? No?

Unfortunately, in this case you have little legal recourse against the employer. California has a law requiring employers to reimburse employees’ work-related expenses, and some companies make it part of the contract. If, however, that’s not the case for you, your options become more limited. An unpaid wage lawsuit is more or less a non-option.

Unpaid reimbursements for work-related expenses can, however, still be deducted from your taxes, for the amount that exceeds 2% of your Adjusted Gross Income (AGI). Basically, if your AGI is $48,000 (2% of which is $960), and you go on a business trip that costs $1,000, you can only deduct $40. That’s because it has to be filed under ‘miscellaneous deductions.’ It’s much better and more beneficial for the employer to reimburse you directly, knowing that the employer can claim multiple employees’ deductions under one header. Nolo even suggests that it would be better to have a slight salary deduction in exchange for a company credit card or the promise of no longer having to deal with an unpaid reimbursement for work-related expenses.

What Can Be Claimed As An Unpaid Reimbursement For Work-Related Expenses?

Nolo.com provides the following list, along with the caveat that each section must meet for the following requirement:

Expenses to be deducted must be ordinary, necessary, and reasonable in amount.

  • unpaid reimbursement for work related expenseswork-related travel, transportation, meal, and entertainment expenses
  • business liability insurance premiums
  • depreciation on a computer or cellular telephone your employer requires you to use in your work
  • dues to a chamber of commerce if membership helps you do your job
  • dues to professional societies
  • education that is work related
  • home office expenses for part of your home used regularly and exclusively in your work
  • expenses of looking for a new job in your present occupation
  • legal fees related to your job
  • malpractice insurance premiums
  • a passport for a business trip
  • research expenses of a college professor
  • subscriptions to professional journals and trade magazines related to your work
  • tools and supplies used in your work
  • union dues and expenses, and
  • work clothes and uniforms (if required and not suitable for everyday use).

For more information on employee expense reimbursement law, improper deductions, or any kind of workplace issue, look to TMH Law’s blog. If you think you have a claim, contact us today for a free consultation!