California law generally holds that an employer may not pass the ordinary costs of doing business on to employees. However, this general rule has a multitude of nuances once one examines all the different costs that arise in the employment context and the various Labor Code and Wage Order provisions that apply. This article addresses five types of costs that arise in the employment context and the various regulations that apply to those scenarios:
1. Physical examinations
Employers are prohibited from requiring an applicant or employee to pay for a physical examination required by the employer. Likewise, the employer cannot require an employee to pay for a medical or physical examination required by any federal, state or local law or regulation. However, costs for pre-employment examinations that are required by law do not have to be reimbursed to the applicant. See Labor Code section 222.5.
If an employer requires as a condition of employment a driver’s license, the employer is responsible to pay the costs for any physical examination that may be required for issuance of the license. However, the employer is not responsible for costs for physical examinations taken prior to when the employee applied for employment. See Labor Code section 231.
2. Cost of cashing checks and lost paychecks
California law prohibits employers from deducting the costs of cashing a paycheck from the employee’s wages. The Division of Labor Standards Enforcement (DLSE) has issued an opinion letter stating that this prohibition also applies to the cost of reissuing a lost or misplaced paycheck. See Opinion Letter 1994.01.27.
3. Tools and equipment
Employers are responsible for paying for and providing the tools and equipment required to perform the job. One exemption to this rule is for employees who earn at least two times the state minimum wage may be required to provide and maintain hand tools and equipment customarily required by the trade or craft. See Wage Orders Nos. 1-2001 to 16-2001, section 8. Protective and safety equipment governed by the Occupational Safety and Health Standards Board requires that employers provide all equipment required under those regulations.
Labor Code section 2802 requires an employer to reimburse employees for expenses they necessarily incur while discharging their duties. If employees are required to drive their personal car for work, the employer must reimburse the employee for the costs attributed to the use of the employee’s car. In Gattuso v. Harte-Hanks Shoppers, Inc., the California Supreme Court clarified the parameters of mileage reimbursement under California law, as well as the three different methods available for employers to reimburse employees for their mileage reimbursement. Click here for a detailed examination of the California Supreme Court’s ruling in Gattuso v. Harte-Hanks.
California law allows employers to require employees to wear particular types of clothing or uniforms to work. If an employer requires a non-exempt employee to wear a uniform, the employer must pay for and maintain it for the employee. What constitutes a “uniform” is not always clear. Click here for more information regarding other considerations that arise with uniforms.