We have written frequently here about AB5, California’s controversial law that creates an “ABC” test that must be satisfied in order for a worker to be treated as an independent contractor.  As we explained here, AB5 codified and expanded the “ABC” test adopted by the California Supreme Court in Dynamex Operations West, Inc. v. Superior Court for determining whether workers in California should be classified as employees or as independent contractors.

While the statute was unambiguously aimed at ride share and food delivery companies that treat drivers as independent contractors, it was broadly written and was passed with little discussion.  Confusingly, it contained a mishmash of last-minute exemptions from the “ABC” test that, from a distance, seemed to be based on little more than which industry groups were able to get legislators’ ears in the hours before the statute was passed.

The original exemptions to AB5 extended to doctors, dentists, insurance agents, lawyers, accounts, real estate agents, and hairstylists, among others.

Now, eight months after AB5 went into effect, more industries and occupations have been exempted from AB5.

On September 4, 2020, Governor Gavin Newsom signed AB 2257, which immediately exempts the following professions from the ambit of AB5:

  • Fine artists
  • Freelance writers
  • Still photographers
  • Photojournalists
  • Freelance editors
  • Newspaper cartoonists
  • Translators
  • Copy Editors
  • Producers
  • Cartographers
  • Musicians with single-engagement live performances
  • Musicians involved in sound recordings or musical compositions
  • Insurance inspectors
  • Real estate appraisers
  • Manufactured housing salespersons
  • Youth sports coaches
  • Landscape architects
  • Professional foresters

These new exemptions may be just the start of amendments to AB5 that will carve out other industries and occupations.

And while it seems highly unlikely that AB5 will be amended to exempt ride share and food delivery companies from the “ABC” test, California voters will decide that themselves in November when they vote on Proposition 22, which would exempt those companies.

In this installment of Epstein Becker Green’s “Class Action Avoidance” webinar series, attorney Michael S. Kun addresses potential wage and hour class actions related to expense reimbursement for employees working from home during the COVID-19 pandemic.

Many employers may have employees working from home for the first time—or at least have employees in certain job categories doing so for the first time. Even employees who sometimes worked from home previously may be doing so for much more time now and, arguably, incurring greater expenses as a result.

This webinar will cover federal and selected state laws on expense reimbursements, including expenses for home computers, smartphones, Internet access, Wi-Fi, phone lines, and even utilities. Not only might employers be sued based on whether or how much they reimburse employees, but these suits could be brought as class actions—and they are already being brought.

Watch the webinar below, on our website, or on YouTube.  Learn more about the full Class Action Avoidance Series here.

In this installment of Epstein Becker Green’s “Class Action Avoidance” webinar series, attorney Jeffrey H. Ruzal discusses wage and hour issues that could result from “work from home” policies and practices on account of the ongoing COVID-19 pandemic.

As fall approaches, businesses are deciding whether to fully reopen, maintain a largely remote workplace, or provide employees with the option of working in the workplace or at home through a hybrid approach. Recent reports and surveys have shown that many remote workers throughout the United States have been, on balance, satisfied with their current work-from-home arrangements. While these arrangements might prove mutually beneficial to employers and their employees, employers must be mindful of the potential wage and hour issues attendant to work-from-home scenarios.

This webinar will focus on (i) ensuring that all work time is properly recorded and paid to employees who are not exempt from overtime, and (ii) maintaining exempt status for managers and supervisors. These two issues figure to be the likely predominant areas that could lead to wage and hour class and collective treatment; therefore, it is important for employees to address them through policies and enforcement as soon as possible.

Watch the webinar below, on our website, or on Vimeo.  Learn more about the full Class Action Avoidance Series here.

Given the ongoing considerations businesses face with the COVID-19 health crisis, many employers have increased the amount of teleworking for employees, including many roles that ordinarily would not telework.  As the COVID-19 health crisis has progressed, employers have continued to extend their teleworking policies while other employers are gearing up to reopen offices.  With these ongoing health risks, it is important for employers to review their teleworking policies and practices to ensure that they are appropriately compensating employees under the Fair Labor Standards Act (“FLSA”) as well as any applicable state and local laws.

Exempt Employees

Payment for Full Workweek for Exempt Employees

While employers do not need to worry about overtime pay for exempt employees, employers must ensure that they pay exempt employees for the entire workweek during each week in which the employee performs any work, even if the employee does not perform work for the entire week.  29 C.F.R. § 541.602(a).  An employer, however, can pay an exempt employee less than the full weekly salary if the deduction falls within a regulatory exemption, which includes, but is not limited to, absences for one or more full days for personal reasons (other than sickness or disability), absences of one or more full days because of sickness or disability taken in accordance with a bona fide plan or policy, or absences for unpaid disciplinary suspensions, made in good faith, of one or more full days.  29 C.F.R. § 541.602(b).  The FLSA does not require employers to pay employees during weeks in which the employee does not perform any work.  It is important to note that where the employer mandates partial-week absences, exempt employees must receive their full weekly salaries. 29 C.F.R. § 541.602(a)(2).

Ensuring Employees are Performing Exempt Duties

Employers should also keep track of the type of work performed in exempt positions to ensure that the employees are performing exempt work.  Under the FLSA, to maintain exempt status, an employee must perform exempt work as his or her “primary duty,” and time spent on these duties is a significant factor in determining whether the employee is performing exempt work.  29 C.F.R. § 541.700.  Thus, even when employees are teleworking, employees should continue to perform exempt duties, particularly where switching to teleworking requires employers to redistribute duties due to layoffs or to allow employees to telework.  However, the U.S. Department of Labor Wage and Hour Division published the COVID-19 and the Fair Labor Standards Act Questions and Answers (“COVID-19 FLSA Q&A), which notes that “during the period of a public health emergency declared by a Federal, State, or local authority with respect to COVID-19, otherwise exempt employees may temporarily perform nonexempt duties that are required by the emergency without losing the exemption.”  While this provides some leeway to employers regarding the tasks performed while employees are primarily teleworking, employers should continue monitoring tasks performed by exempt employees to ensure that  exempt employees are still primarily performing exempt duties and, if any non-exempt duties are necessary, that the exempt employees are not performing non-exempt duties for an extended period of time.

Non-Exempt Employees

Time Keeping While Teleworking

Under the FLSA, employers must provide non-exempt employees at least the applicable minimum wage for all hours worked, plus premium overtime pay after 40 hours in a workweek.  (State law or the parties’ agreement may require more.)  These pay requirements apply to telework just as they do to work at an employer’s premises.  Of note, an employer must treat as compensable work all working time, even if the employer has not authorized such work, if the employer “knows or has reason to believe” that the employee is working.  29 C.F.R. § 785.11.  This includes any overtime hours, or any telework not authorized by the employer and any unreported hours of work so long as the employer knew, or had reason to believe, that the employee was performing that work.  The Families First Coronavirus Response Act (“FFCRA”), which is a temporary measure effective from April 2, 2020 through December 31, 2020 and applies to employers with fewer than 500 employees, specifically states that “[e]mployees who are teleworking for COVID-19 related reasons must be compensated for all hours actually worked and which the Employer knew or should have known were worked by the Employee.  29 C.F.R. § 826.10.

As teleworking may create more difficulties for the employer to monitor hours worked by employees and thereby increase risks for off-the-clock work, the COVID-19 FLSA Q&A guidance states that employers may meet their obligations to appropriately compensate employees for time worked “by providing reasonable time-reporting procedures and compensating that employee for all reported hours.”  Employers should consider using time-keeping software that allows non-exempt employees to contemporaneously record all hours worked.  If utilizing new software, an employer may want to provide training, and testing of the software, to ensure that employees are aware of and know how to operate the time-keeping systems.  Regardless, employers should communicate to non-exempt employees, particularly while working remotely, the importance of contemporaneous and accurate time-keeping for working time and for any unpaid meal breaks.  Another good practice to ensure teleworking employees are following the time-keeping policies and reporting all hours worked, is that employers can require non-exempt employees to obtain authorization before working overtime or engaging in any other unapproved work.  Creating, enforcing, and communicating these types of policies to employees will help ensure that teleworking employees continue to appropriately report all hours worked.

Potential Issues with Flexible Workdays

Generally, an employer must compensate employees for the “continuous workday,” which includes the time during the workday after the employee commences his or her principal activity through the time that he or she finishes the principal activity or activities.  29 C.F.R. § 785.9.  As employees have more potential distractions while teleworking, employees may request flexibility in their normal scheduling.  For instance, some employees may request time during normal working hours to attend to child care responsibilities.  Given the added stressors with the current COVID-19 health crisis, the FFCRA states that the “continuous workday” rule “does not apply to employees while they are teleworking for COVID-19 related reasons.”  29 C.F.R. § 826.10.  The COVID-19 FLSA Q&A further noted that the Department of Labor wanted to encourage flexible hours during the COVID-19 health crisis to allow an employee to work with breaks to allow employees to deal with any personal responsibilities, like child care, during the day.  While the temporary guidance emphasizes the emergency measures taken because of the issues presented by the COVID-19 health crisis and the courts ordinarily defer to the Department of Labor’s interpretive guidance, there is no guarantee that the courts will defer to the Department’s newly articulated views regarding the “continuous workday” rule.  Also, employers should emphasize that even where they agree to a more flexible schedule allowing the employee to work a non-continuous workday, the employer and employee should agree to a set schedule.  Additionally, employers should ensure that employees are following the normal time-reporting policies.  Employers should also refer to any relevant state laws, as this temporary guidance regarding the “continuous workday” rule applies to only the FLSA, and states may or may not choose to follow that approach.

Also, as employers begin reopening offices, some of the workforce may be teleworking while other employees are returning to work on-site.  Employers should remain vigilant in ensuring that employees continue to accurately record all time worked, regardless of whether the employee works remotely or on-site.  While the Department has curtailed the “continuous workday” rule under certain circumstances, employees have previously argue that travel time that is otherwise non-compensable becomes compensable if the employer requires employees to perform activities “integral and indispensable to his [or her] principal job activities” at home before commuting into the office or after the employee finishes their workday and commutes home.  See Kuebel v. Black & Decker Inc., 643 F.3d 352, 358 (2d Cir. 2011).  The Second and Ninth Circuit determined that where the employer does not require that the employee to perform duties at a specific time before or after going into the office, the commuting time is not compensable.  See Id.; Rutti v. Lojack Corp., 596 F.3d 1046 (9th Cir. 2010).  As employers begin to reopen offices, employers may consider limiting required on-site working meetings if part of the workforce remains working remotely.  Most importantly, employers should ensure that employees continue reporting all working time.

 

 

Given the ever-increasing number of wage-hour class and collective actions being filed against employers, it is no surprise that many employers have turned to arbitration agreements with class and collective action waivers as a first line of defense, particularly after the United States Supreme Court’s landmark 2018 Epic Systems v. Lewis decision.

If there is a common misconception about Epic Systems, however, it is that the Supreme Court concluded that all arbitration agreements with all employees are enforceable under all circumstances.  The Court reached no such conclusion. In fact, the Court went out of its way to explain that arbitration agreements remain susceptible to challenges, including challenges that would be available as to other contracts.

And, of course, arbitration agreements are susceptible to challenges under the Federal Arbitration Act (“FAA”) itself.

The FAA, which established a federal policy favoring arbitration, extends to arbitration agreements in any contract evidencing a transaction “involving commerce.”

Somewhat confusingly, Section 1 of the FAA includes an exemption for individuals who are actually “engaged in … interstate commerce.”  That is, arbitration agreements that involve “commerce” are not valid under the FAA if the workers are engaged in “interstate commerce.”  Specifically, under Section 1, the FAA does not apply to seamen, railroad employees, and other workers “engaged in foreign or interstate commerce.” This exemption is sometimes referred to as the “transportation worker” exemption.

The courts have struggled to determine whether particular individuals fall within the transportation worker exemption. Their conclusions are far from consistent and are arguably entirely irreconcilable.

Some courts have concluded that the exemption only applies to individuals who themselves transport goods across state lines.  Others have concluded that the exemption can apply to persons who transport goods within a single state, never crossing into another state.

In Rittmann v. Amazon.com, Inc., the United States District Court for the Western District of Washington concluded that Amazon “last mile” delivery drivers who did not transport goods across state lines were nevertheless “engaged in … interstate commerce” and, therefore, fell within the exemption to the FAA — meaning that they were not required to arbitrate their claims pursuant to their arbitration agreements.

In a 2-1 split decision, the Ninth Circuit Court of Appeals has now affirmed that decision.

This ruling comes on the heels of a similar ruling from the First Circuit Court of Appeal in July 2020 in Bernard Waithaka v. Amazon.com Inc. 

These two decisions permit the delivery drivers to pursue their wage-hour claims as class actions in court, rather than as individual arbitrations – unless the decisions are overturned during en banc reviews or unless the United States Supreme Court steps in.

Given the very different interpretations of the transportation worker exemption, it is certainly possible that the Supreme Court will in fact review the issue and resolve the conflict among the courts.

Until then, these decisions are worth review by employers with arbitration agreements, particularly those who have employees involved in transportation.  And it is important for them to keep in mind that even if an arbitration agreement is not enforceable under the FAA, it could be enforced under state law.

As we wrote here just several days ago, Californians were facing the seemingly unimaginable this week– the possibility of living without ride share services for the foreseeable future.

In short, a state court judge issue a temporary restraining order (“TRO”) requiring ride share companies to treat their drivers as employees in purported compliance with  AB 5, California’s controversial new law that only permits workers to be classified as independent contractors in most industries if they satisfy an “ABC” test.

After the same judge refused to stay the TRO during the pendency of the ride share companies’ appeal beyond the initial 10-day stay, the ride share companies made clear that they might cease operating in California effective midnight on Thursday, August 20. 2020, gearing up instead for the November ballot initiative when California voters will decide for themselves whether to pass Proposition 22, which would allow ride share and food delivery companies to treat drivers as independent contractors.

As thousands of Californians likely wondered aloud how they would go back to driving each other to the airport and finding designated drivers for evenings on the town, the Court of Appeal stepped in and issued an emergency stay of the TRO such that the ride share companies are not required to treat the drivers as employees – at least for now.

In the order, the Court of Appeal set a September 4, 2020 deadline for the ride share companies to submit sworn statements setting forth their “implementation plans” to comply with California’s controversial AB 5 within 30 days if the Court upholds the TRO and if Proposition 22 does not pass in November.

So, once again, the stage is set for a ballot showdown in November.  By passing Proposition 22, voters would effectively take this issue out of the courts’ hands.

And if you know how Californians have reacted the past few days to the mere possibility that they might not have ride share services for the foreseeable future, you might have a good sense how they will vote in California when a “no” vote on Proposition 22 might mean that ride share and food delivery companies will stop doing business in the state.

Of course, there will be a tremendous irony if Proposition 22 passes.  It is no secret that AB 5 was aimed at ride share and food delivery companies – and it could end up being the case that companies doing business in California must comply with the controversial statute except for the very companies at which it was aimed.

To some, it may feel like it was a lifetime ago when ride share companies did not even exist.  In those seemingly long-ago days, people relied upon friends to drive them to or from the airport, or assigned designated drivers for those nights when they attended events where alcohol would be served, or used other methods of transportation to travel the roadways to their various destinations.

Californians may soon be living like that again.

As we shared the other day, a California Superior Court has issued a temporary restraining order requiring ride share companies to treat their drivers as employees.

Shortly thereafter, a spokesperson for at least one of the ride share companies let it be known that not only would they be appealing that decision but, unless that order is stayed while it is being appealed, the ride share companies may simply stop providing services in California during the appeal.

The Superior Court’s order is only stayed for 10 days.  And already, the Superior Court has denied a request to continue the stay during the appeal.

The next step for the ride share companies will be to ask the Court of Appeal to stay the decision during the pendency of the appeal.

While the arguments to stay the order during the appeal appear to be very strong – the ride share companies arguably will lose the benefit of the appeal if they must comply with the order only to prevail on appeal – the Court of Appeal has broad discretion in these matters.

And should the Court of Appeal follow the Superior Court and also refuse to stay the order requiring the ride share companies to treat drivers as employees, Californians should not be surprised if the ride share companies take a safe route and simply stop doing business in California during the appeal.

What would that mean for Californians?

It would mean that the ride share apps on their phones may stop functioning very, very soon.  And Californians can go back to finding friends to take them to the airport, getting designated drivers for events that will include alcohol, and taking other means of transportation.  It will be old times all over again.

We have written here frequently about California’s controversial AB 5 law, which permits companies to treat workers as independent contractors only if they satisfy a stringent “ABC” test.

The broad statute, unambiguously written to try to force companies to treat gig economy workers as employees, has been the subject of a great deal of debate and litigation, including a state court action filed by the State Attorney General trying to force ride share companies to treat their drivers as employees.

In the action filed by the State Attorney General, the Superior Court judge has issued a temporary restraining order requiring the ride share companies to treat their drivers as employees.

The Superior Court judge ruled that the companies could not satisfy the “B” part of AB 5’s “ABC” test, which requires that the worker performs work that is outside the usual course of the hiring entity’s business in order to be treated as an independent contractor.

The decision is appealable within 10 days – and there is every reason to believe that the ride share companies in fact will appeal the decision.

How the issue plays out with the Court of Appeal will be closely monitored.  But whatever the Court of Appeal does, there ultimately will be a ballot showdown in November 2020 when California voters will be asked to decide whether ride share and food delivery companies may treat their workers as independent contractors.  Of course, only time will tell whether that initiative will be successful.

In employment, as in life generally, breaking up can be hard to do.  This is particularly so when a departing employee owes the employer money.  Most employers understand that applicable law often prohibits simply deducting such debts from an employee’s final paycheck.  Consider, for example, a recently terminated employee who refuses to return a $500 printer the employer provided to allow the employee to work from home.  In most states, absent an agreement in writing, wage payment laws prohibit the employer from deducting $500 from the employee’s final paycheck to recover the cost of the printer.  A small claims lawsuit may be the only available way to recover the $500 owed, but that is not likely to be worth the time or money.

But what about business expenses the employer ordinarily reimburses to the employee – e.g., airfare, hotel, and meal expenses for work-related trips, or, during these pandemic times, monthly cell phone and internet service?  Continuing with our example, if the employee has properly submitted for reimbursement of expenses (meaning complied with policy requirements) in an amount equal to or greater than the $500 cost of the printer, may the employer refuse to reimburse the employee for $500 in expenses, and call it even?  This potential offset strategy faces several potential hurdles.

The First Hurdle:  Are Reimbursable Expense “Wages”?

The FLSA:  Reimbursable Expenses Are Not “Wages,” But Beware Minimum Wage and Salary Basis Traps

Withholding expense reimbursements will not work as an offset strategy if the expense reimbursements qualify as “wages” under applicable law.  The FLSA’s definition of “wages” does not include business expense reimbursements.  See 29 U.S.C. § 203(m).  And the FLSA’s definition of “regular rate” for purposes of calculating overtime specifically excludes reimbursable business expenses, such as “reasonable payments for traveling expenses, or other expenses, incurred by an employee in the furtherance of the employer’s interests and properly reimbursable by the employer.”  29 U.S.C. § 207(e)(2).  However, beware the minimum wage requirement.  Withholding an expense reimbursement can give rise to a minimum wage violation under the theory of an indirect wage deduction, if the employee’s earnings are reduced below the required minimum wage.  The DOL highlighted this prohibition against unlawful “kickbacks” as part of its COVID-19 guidance, which we explained here.  [hyperlink:  https://www.wagehourblog.com/2020/03/articles/wage-and-hour-policies/employees-telecommuting-during-public-health-crisis-may-be-entitled-to-expense-reimbursement/].  Similarly, plaintiffs’ lawyers may argue that withholding an expense reimbursement affects an exempt employee’s salaried compensation for the final week of work.

State Wage Payment Laws:  Definitions Differ

State wage payment laws, unfortunately, provide differing answers.  On one hand, the District of Columbia Court of Appeals recently analyzed this question under Washington D.C.’s wage payment law, concluding that “expense reimbursements” are not “wages.”  Sivaraman v. Guizzetti & Assocs., 2020 WL 3088865, — A.2d. – (D.C. June 11, 2020) (reviewing dictionary definitions, applying statutory interpretation canons, and relying upon Antonin Scalia & Bryan A. Garner, Reading Law:  The Interpretation of Legal Texts (2012)).  On the other hand, states like New York specifically define “wages” to include “reimbursement for expenses.”  See N.Y. Labor Law §§ 190(1), 198c(2).  Consequently, the operative state’s definition of “wages” may pose an insurmountable hurdle to the expense reimbursement offset strategy.

A Second Hurdle:  Many States’ Laws Specifically Govern Expense Reimbursements

California’s well-known Labor Code § 2802 provides that an employer “shall indemnify” employees “for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties[.]”  The mandatory “shall indemnify” language precludes an employer from refusing to pay an otherwise proper expense reimbursement.  Consequently, § 2802 prohibits the potential expense reimbursement offset strategy.

Illinois passed a similar law governing expense reimbursements that became effective in 2019, which has received considerable attention during the COVID-19 pandemic.

[hyperlink:  https://www.workforcebulletin.com/2020/03/25/illinois-stay-at-home-order-a-checklist-for-operating-during-covid-19/].

And several other states have laws on the books regulating payment of expense reimbursements, including Pennsylvania, Montana, Iowa, and New Hampshire.  The full text of these laws is set out below.  These laws vary somewhat in scope, but generally require reimbursement of expenses, particularly when the employer maintains an expense reimbursement policy.  Consequently, state laws like these probably prohibit withholding otherwise valid expense reimbursements to offset separate amounts owed to the employer.

A Third Hurdle:  Your Reimbursement Policy

If the relevant state neither defines “wages” to include expense reimbursements nor regulates expense reimbursements, the offset strategy faces a third hurdle:  your expense reimbursement policy.  Specifically, your expense reimbursement policy may not permit offsetting otherwise proper expense reimbursements to repay separate amounts owed.  In reality, your policy drafter was probably not thinking about the interplay of offsets and  expense reimbursements when creating your policy.  Consequently, it seems unlikely the company will have a contractual right to refuse to pay an otherwise valid request for reimbursement.  However, the offset strategy may create the practical outcome the offset strategy seeks.  The employee may not be incentivized to pursue a $500 expense reimbursement claim in small claims court knowing he or she has wrongfully retained the $500 printer.

In sum, when time is money, companies must carefully, and quickly, weigh the risks of taking action against an employee.  Before refusing an otherwise proper request to reimburse expenses to offset a separate debt, carefully analyze the governing state’s laws governing wages and expense reimbursements, and the language of your specific policy.

State Expense Reimbursement Laws

California, Cal. Lab. Code § 2802:

(a) An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful.

(b) All awards made by a court or by the Division of Labor Standards Enforcement for reimbursement of necessary expenditures under this section shall carry interest at the same rate as judgments in civil actions. Interest shall accrue from the date on which the employee incurred the necessary expenditure or loss.

(c) For purposes of this section, the term “necessary expenditures or losses” shall include all reasonable costs, including, but not limited to, attorney’s fees incurred by the employee enforcing the rights granted by this section.

(d) In addition to recovery of penalties under this section in a court action or proceedings pursuant to Section 98, the commissioner may issue a citation against an employer or other person acting on behalf of the employer who violates reimbursement obligations for an amount determined to be due to an employee under this section. The procedures for issuing, contesting, and enforcing judgments for citations or civil penalties issued by the commissioner shall be the same as those set forth in Section 1197.1. Amounts recovered pursuant to this section shall be paid to the affected employee.

Illinois, 820 ILCS 115/9.5L

(a) An employer shall reimburse an employee for all necessary expenditures or losses incurred by the employee within the employee’s scope of employment and directly related to services performed for the employer. As used in this Section, “necessary expenditures” means all reasonable expenditures or losses required of the employee in the discharge of employment duties and that inure to the primary benefit of the employer. An employer is not responsible for losses due to an employee’s own negligence, losses due to normal wear, or losses due to theft unless the theft was a result of the employer’s negligence. An employee shall submit any necessary expenditure with appropriate supporting documentation within 30 calendar days after incurring the expense, except that an employer may provide additional time for submitting requests for reimbursement in a written expense reimbursement policy. Where supporting documentation is nonexistent, missing, or lost, the employee shall submit a signed statement regarding any such receipts.

(b) An employee is not entitled to reimbursement under this Section if (i) the employer has an established written expense reimbursement policy and (ii) the employee failed to comply with the written expense reimbursement policy. An employer is not liable under this Section unless the employer authorized or required the employee to incur the necessary expenditure or the employer failed to comply with its own written expense reimbursement policy. If the written expense reimbursement policy of an employer establishes specifications or guidelines for necessary expenditures, the employer is not liable under this Section for the portion of the expenditure amount that exceeds the specifications or guidelines of the policy so long as the employer does not institute a policy that provides for no reimbursement or de minimis reimbursement.

(c) To ensure consistency with federal law, any rules adopted by the Department and interpretation of this Section shall be consistent and not in conflict with federal regulations and guidelines regarding employer requirements for reimbursement of employee expenses.

Iowa, Iowa Code §91A.3(6):

Expenses by the employee which are authorized by the employer and incurred by the employee shall either be reimbursed in advance of expenditure or be reimbursed not later than thirty days after the employee’s submission of an expense claim. If the employer refuses to pay all or part of each claim, the employer shall submit to the employee a written justification of such refusal within the same time period in which expense claims are paid under this subsection

Montana, Mont. Code Ann. § 39-2-701:

(a) An employer shall indemnify an employee, except as prescribed in subsection (2), for all that the employee necessarily expends or loses in direct consequence of the discharge of duties as an employee or of the employee’s obedience to the directions of the employer, even though unlawful, unless the employee at the time of obeying the directions believed them to be unlawful.

(b) An employer is not bound to indemnify an employee for losses suffered by the employee in consequence of the ordinary risks of the business in which the employee is employed.

(c) An employer shall in all cases indemnify an employee for losses caused by the employer’s want of ordinary care.

New Hampshire, N.H. Rev. Stat. § 275:57: 

(a) An employee who incurs expenses in connection with his or her employment and at the request of the employer, except those expenses normally borne by the employee as a precondition of employment, which are not paid for by wages, cash advance, or other means from the employer, shall be reimbursed for the payment of the expenses within 30 days of the presentation by the employee of proof of payment.

(b) Enforcement and administration of this section by the department shall be as provided for wage claims under RSA 275:51

(c) An action by an employee to recover unreimbursed expenses may be maintained in any court of competent jurisdiction by any one or more employees for and in behalf of himself or herself, or themselves, or such employee or employees may designate an agent or representative to maintain such action.

(d) An employer who willfully violates the provisions of this section may be assessed interest and a civil penalty of up to $1,000 per violation, which shall be deposited into the department of labor restricted fund established in RSA 273:1-b.

(e) The commissioner shall adopt rules under RSA 541-A necessary for the administration of this section.

Pennsylvania, 43 Pa. Stat. Ann § 260.3:

(a) Wages other than fringe benefits and wage supplements.  Every employer shall pay all wages, other than fringe benefits and wage supplements, due to his employes [sic] on regular paydays designated in advance by the employer.  Overtime wages may be considered as wages earned and payable in the next succeeding pay period.  All wages, other than fringe benefits and wage supplements, earned in any pay period shall be due and payable within the number of days after the expiration of said pay period as provided in a written contract of employment or, if not so specified, within the standard time lapse customary in the trade or within 15 days from the end of such pay period.  The wages shall be paid in lawful money of the United States or check, except that deductions provided by law, or as authorized by regulation of the Department of Labor and Industry for the convenience of the employe [sic], may be made including deductions of contributions to employe [sic] benefit plans which are subject to the Employee Retirement Income Security Act of 1974 …

(b) Fringe benefits and wage supplements.  Every employer who by agreement deducts union dues from employes’ [sic] pay or agrees to pay or provide fringe benefits or wage supplements, must remit the deductions or pay or provide the fringe benefits or wage supplements, as required, within 10 days after such payments are required to be made to the union in case of dues or to a trust or pooled fund, or within 10 days after such payments are required to be made directly to the employee, or within 60 days of the date when proper claim was filed by the employee in situations where no required time for payment is specified.

As we wrote here recently,  two federal courts in California rejected Postmates’ attempt to escape having to defend thousands of individual arbitrations filed by drivers contending they have been misclassified as independent contractors. Those decisions require Postmates to pay millions in arbitration fees alone.

A federal court in Illinois has now reached the same conclusion, holding that Postmates must proceed with more than 200 individual arbitrations that will cost Postmates $11 million in arbitration fees.

Arbitration agreements with class action waivers have become more prevalent than ever following the United States Supreme Court’s Epic Systems decision.  And they are especially prevalent with gig economy employers.

As we have written before, companies that implement arbitration agreements with class action waivers must be careful what they ask for.  By using such agreements, they run the risk of dozens, hundreds or even thousands of individual arbitrations, the cost of which could threaten the companies’ very existence.  (In California, we estimate that the arbitration costs alone for a single-plaintiff case are approximately $60,000 – which does not include the attorney’s fees in defending that case or the potential exposure.)  It is for that very reason that some companies have elected not to implement such agreements.