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Alex J. Esq.
Alex J. Esq., Attorney at Law
Category: California Employment Law
Satisfied Customers: 16397
Experience:  Experienced Licensed Attorney
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My employer paid me a $500 car allowance in addition to

Customer Question

Hi, My employer paid me a $500 car allowance in addition to $1300 to cover my privately bought health care and unaccountable $750 to cover home office cost. They would pay me this in a lump sum once a month and take out taxes. I have added the wording
of the contract below. Would any of these costs be considered a wage in California? I am asking because after they fired me they paid me what was owed of the above 37 days late. I worked there for 3 years. They also paid my vacation payout 37 days late. I
want to know if these allowances and extra payments are also considered wages that would qualify for the wage penalty. I know they are trying to say there was a dispute over the vacation pay out ( there wasn't) to get out of the wage penalty so wondering if
I would also have a wage penalty case with these extra 3 payments that they failed to pay on time. The text of my contract is below. My company would pay the 3 allowances in a lump sum and take out taxes. •Upon receipt by Company of verification to Company's
satisfaction in its sole discretion, Company shall reimburse Employee an amount no more than $1,300 for each month during the Term for health insurance premiums for Employee and Employee’s dependent beneficiaries (i.e., spouse and minor children). •Office/Cellular
Phone Usage/Courier. In lieu of any payment or reimbursement to Employee for business related use of a cellular phone and office expenses (including, but not limited to, rent, messenger services, office equipment, telephones, mail, Skype, and office supplies),
Company shall provide Employee with a non-accountable expense allowance of $750 per month. For all business related courier services, Employee shall use Company’s corporate FedEx account (or, if Company no longer maintains an account with FedEx, the then current
corporate account at an alternative courier service). •Reimbursements. Upon receipt by Company of verification to Company's satisfaction in its sole discretion, Company shall reimburse Employee an amount no more than $1,275 for each month during the Term for
all ordinary and necessary business, entertainment and other expenses reasonably incurred by Employee in the performance of Employee's duties and obligations under this Agreement (including a car allowance of $500 for each month)
Submitted: 1 year ago.
Category: California Employment Law
Expert:  Alex J. Esq. replied 1 year ago.
Hello. My name is***** will be happy to answer your question.I am sorry to hear about this unfortunate situation.Unfortunately, generally, allowances which are to be used toward work related expenses / costs, are not considered wages, but are considered reimbursements and do not fall under the legal definition of wages.I am very sorry to provide you with this bad news, but please understand that I do have professional obligation to provide JustAnswer.com customers with correct answers, even when answer is not favorable to the customer.I wish you the best of luck and God bless you!
Customer: replied 1 year ago.
they were taxed. and non acceptable unlike expenses.
why is the car allowance considered taxable income then?
Expert:  Alex J. Esq. replied 1 year ago.
Thank you for your follow up.
Even though, such allowances can be taxed at the time they are disbursed, it is up to the employee to claim deductions once the allowances are used and that is why such allowances are not considered income / wages.
I am very sorry to provide you with this bad news, but please understand that I do have professional obligation to provide JustAnswer.com customers with correct answers, even when answer is not favorable to the customer.
I wish you the best of luck and God bless you!
Expert:  Alex J. Esq. replied 1 year ago.
Do you have any related follow up questions?
Customer: replied 1 year ago.
what constitutes a good faith dispute? I had filed a claim with the DLSE since I was not paid my allowances and my 20 days of vacation days. my vacation days were then paid 37 days after the date of termination. I am still claiming wage penalty but my employer is saying there was a dispute over the days so they don't have to pay the wage penalty. They obviously didn't keep track of my vacation days because they asked me for them. These conversations over my vacation days happened 30 days after the date of the termination. my employer's accountant sent me an email asking me for my days so she could compare to the company's internal records. She then sent me an email saying that she was paying me for the full 20 accrued days. Does a dispute even possible to exist if they paid me for the full 20 days of accrued vacation? My claim was for 20 days. thank you
Expert:  Alex J. Esq. replied 1 year ago.
Thank you for your follow up. This is an entirely different question and according to the rules of JustAnswer.com has to be posted as a new post and I will be happy to answer your new question, if you request for me to answer it and also I would ask you to positively rate my answer to your original question, so I can be compensated for my work.Thank you.
Expert:  Alex J. Esq. replied 1 year ago.
Do you have any related follow up questions, if not, please positively rate my answer, so I can be compensated for my work.
Thank you and God bless you!

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