The expense reimbursement requirement falls under Labor Code section 2802. There is no firm time requirement in the California Labor Code for payment of expense reimbursements to employees, but the U.S. District Court in the Northern District of California held in Stuart v. Radio Shack Corp. (Dec. 6, 2010):
"[F]or purposes of § 2802, before an employer's duty to reimburse is triggered, it must either know or have reason to know that the employee has incurred an expense. Once the employer has such knowledge, then it has the duty to exercise due diligence and take any and all reasonable steps to ensure that the employee is paid for the expense."
This court also held expense reimbursements are "comparable to a wage." Wages must be paid no less frequently than twice per month, with some exceptions for exempt or commissioned employees, temporary workers, agricultural employee, and a couple others.
Though this court decision is not binding legal precedent everywhere in California, the reasoning is sound and the case will be persuasive to other trial courts.
Exercising "due diligence" and "taking all reasonable steps" seems to me to mean there should be no undue delay in payment of expense reimbursements to employees. A best practice in my opinion would be to pay the expense reimbursements with the next regular payroll after the employer learns of the expense, or has reason to know of the expense.
Bear in mind, employees may not be in a financial position to essentially advance or float business expenses for the company for a month or more, especially if they are large expenses like out of town lodging. Leaving employees hanging on expense reimbursements for weeks or months causes them a hardship and can lead to an unhappy workforce, which in turn can increase the risk of a wage and hour lawsuit.
