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IBM to reimburse employees for work-from-home expenses amid COVID-19

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On Mar. 19, 2020, California’s governor issued an executive order requiring residents to stay at home amid the COVID-19 pandemic, subject to some exceptions. In line with this issuance, IBM directed its employees to work at home.

In December 2020, an Experis employee sued his employer under California’s Private Attorneys General Act (PAGA) on behalf of the state’s Labor and Workforce Development Agency and other aggrieved employees. Later, he added IBM as a defendant because it and Experis were allegedly joint employers. The plaintiff joined the case as an additional PAGA representative.

The employees alleged violations of section 2802(a) of California’s Labor Code, which required an employer to reimburse an employee for all necessary expenditures that the employee incurred as a direct consequence of discharging their duties.

The employees asked for penalties for IBM’s alleged failure to reimburse employees for work-from-home expenses necessarily incurred following the stay-at-home order. In response, IBM filed demurrers. The trial court granted the demurrers and ruled in IBM’s favor.

The plaintiff failed to allege that IBM’s work-from-home instructions to employees independently and directly caused the employees to incur necessary business expenses, the trial court reasoned. Since IBM was responding to government orders, there was an intervening cause for the expenses, the trial court added.

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