Boss Refuses To Reimburse Expenses

[karmicdogmom]

CA - My business partner in one project hired me to work on a separate project for him. My contract on this project states that I am to be reimbursed in a reasonable time period. I submitted an expense report for $2,600.00. First, he told me the check was in the mail, and that he had approved it -- then, when I asked about it, he acted confused. I wrote his accountant, who told me he never approved the expense, and when I confronted him -- he confessed that he was withholding it as "collateral," because I owed him $1,000.00 on our partnership project. He said he was "sure I wasn't going to pay the $1,000.00," so he was holding my reimbursement check until it was settled. Then he said he realized this is no way to run a partnership, and that he was going to pay it. A week later (while I was out of town) he said the check was in the office. When I returned and asked for it, he went off again, and again told me he was holding it as collateral. I told him to take the $1,000.00 out of the $2,600.00 and send me an invoice, which he said he would do. He never sent an invoice, or a check. A week ago, he said he would do a direct deposit into my account for the check. It still isn't done.

It's been 2 months since I submitted the initial expense report. I would like to send a demand letter and threaten him with small claims -- or some kind of employment law violation if possible. What's the best recourse?

[pattytx]

You say "business partner". And "contract". Are you a part owner? An employee? A independent consultant?

Employees must be reimbursed for all business-related expenses they personally incurred.
See here, Section 2802:
[url]http://www.leginfo.ca.gov/cgi-bin/displaycode?section=lab&group=02001-03000&file=2800-2810[/url]

This is true even if you didn't have a contract.

[karmicdogmom]

Hi Patty, thanks for responding. We are partners in one project (project "A"). I was hired by him as an independent contractor on a second project (project "B"), which is the one he isn't reimbursing me on.

His initial logic was that I owed him $1,000 on "A" and he didn't trust that I would pay it, so he was withholding my expense reimbursement on "B." Now he's just being a jerk and not paying it.

Also, I just remembered that my contract says we'll abide by the laws of Delaware, which is where he has his LLC - but the work was done in California.

[pattytx]

OK, that changes things. The Labor Code I referred to applies to employees ONLY. So, the fact that the contract states Delaware laws instead of California laws will be applicable is irrelevant under these circumstances. You'll have to have the contract provisions reviewed by an attorney to see if a breach has occurred and, if so, what your recourse is.