Lump-Sum Payment For Employee Expenses

Law360, New York (November 28, 2007, 12:00 AM EST) -- On Nov. 5, 2007, the California Supreme Court issued its opinion in Gattuso v. HarteHanks Shoppers Inc., holding that an employer may indemnify employees for reasonable and necessary business expenses under California Labor Code § 2802 (Section 2802) by paying employees enhanced compensation in the form of salary or commissions.

The Court concluded, however, that there must be a means or method for apportioning the enhanced compensation between expense reimbursement and wages/salary, so as to delineate which amount is for labor performed and which is to...
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