Remote work has gone from a pandemic stopgap to a permanent feature of California’s workforce. For employers, this shift has created flexibility and expanded access to talent — but it has also introduced a web of compliance challenges. Under California law, remote employees are entitled to the same wage and hour protections as on-site staff, and that means employers must pay close attention to two critical areas: expense reimbursement and timekeeping.

Failing to comply doesn’t just frustrate employees — it can fuel lawsuits and costly penalties under the Labor Code and the Private Attorneys General Act (PAGA).

Expense Reimbursement: Paying for More Than Wages

California Labor Code §2802 requires employers to reimburse employees for all necessary expenses incurred in the course of their work. This obligation applies with full force to remote employees.

Common reimbursable expenses include:

• A portion of home internet costs used for work.
• Cell phone bills when employees use their personal phones for calls, texts, or apps related to work.
• Office supplies such as paper, ink, or ergonomic equipment if required for job duties.
• In some cases, utilities or electricity where remote work significantly increases usage.

For example, in Cochran v. Schwan’s Home Service, Inc. (2014), a California court ruled that employers must reimburse employees for work-related cell phone use, even if the employee didn’t incur extra costs. If the employee pays a flat monthly rate, the employer still owes “a reasonable percentage” of the bill.

That principle extends to other expenses: if remote work requires it, employers must cover it.

Timekeeping: Remote Work Doesn’t Excuse Precision

California law requires non-exempt employees’ work hours to be tracked to the minute. That means employers must have systems in place to record:

• Clock-in and clock-out times.
• Meal breaks (at least 30 minutes, duty-free, after 5 hours).
• Rest breaks (10 minutes for every 4 hours worked or major fraction).

The challenge with remote work is oversight. Employers cannot assume employees will take their breaks properly or accurately report hours. Courts expect employers to enforce compliance — not just leave it up to employees.

For example, if a remote employee regularly logs back in after hours to answer emails without pay, the employer can be liable for off-the-clock work. Even if the company had no knowledge, the failure to implement proper monitoring or training may be considered negligence.

Common Pitfalls in Remote Work Compliance

Employers often stumble in three areas:

1. Flat “work from home” stipends that don’t reflect actual expenses. A flat $50/month allowance may not cover increased internet and cell usage — and courts have signaled this could violate Labor Code §2802.
2. Assuming exempt classification solves everything. Even exempt employees may need reimbursements, and employers must ensure they truly meet exemption tests.
3. Failing to update policies. Old handbooks often don’t address remote work at all, leaving ambiguity around expenses, breaks, and timekeeping.

Best Practices for Employers

To reduce risk:

• Adopt clear remote work policies that define reimbursable expenses and explain the reimbursement process.
• Implement reliable timekeeping software accessible from home devices, with reminders for breaks.
• Train managers to monitor workload and ensure remote staff don’t work off the clock.
• Audit expense claims and payroll records regularly to catch compliance gaps.
• Document reimbursements with receipts, payroll entries, or expense reports to prove compliance.

Flexibility + Compliance is Best

Remote work offers flexibility, but California law makes clear that distance doesn’t dilute employee protections. Employers must treat expense reimbursement and timekeeping as core compliance priorities, not afterthoughts. By setting clear policies, investing in reliable systems, and documenting every step, employers can support their remote workforce while avoiding costly litigation.

Train Your Remote Workforce

At Cal Comply, our wage and hour training helps California employers adapt to the realities of remote work. From expense reimbursement rules to enforcing timekeeping and break compliance, we equip HR leaders, managers, and employees to stay compliant in this new era of work.

👉 Learn more about our Wage & Hour Training

This post is for informational purposes only and does not constitute legal advice. California’s meal and rest break laws are complex and vary by industry and workforce. Consult an experienced employment attorney for guidance tailored to your business. Cal Comply is a paid training provider mentioned for illustrative purposes; other compliance resources are available.