In Gattuso v. Harte-Hanks Shoppers, Inc. (2007) 42 Cal.4th 554, the issue was automobile reimbursement expenses, and whether an employer could satisfy the statutory obligation by paying employees increased wages or commissions instead of separately reimbursing them for their actual expenses. (Id. at pp. 559, 575.) Because calculation of actual expenses can be "burdensome for both the employer and the employee," an employer also is permitted to use a lump-sum payment method to reimburse employees provided the amount paid is sufficient to fully reimburse employees for the actual expenses necessarily incurred. (Id. at pp. 568, 570-571.) This reimbursement method is subject to the requirement that the "employee must be permitted to challenge the amount of a lump-sum payment as being insufficient under section 2802." (Id. at p. 571.) If the lump-sum payment is inadequate, the employer must make up the difference to satisfy its statutory obligations to fully reimburse employees for all expenses actually and necessarily incurred. (Lab. Code, 2802, 2804.) Plaintiffs were outside sales representatives seeking indemnification under section 2802 for expenses incurred in using their own automobiles to perform their employment duties. (Gattuso, supra, 42 Cal.4th at p. 560.) The parties and the court agreed that pursuant to Labor Code section 2802, the employer was required to fully reimburse its outside sales representatives for the work-related automobile expenses they "actually and necessarily incurred." (Gattuso, at p. 567.) The court considered three different automobile expense reimbursement methods and found them permissible under section 2802. (Gattuso, at pp. 568-570.) First, the court noted that, under the "actual expense method," the expenses actually and necessarily incurred are calculated and the employee is then paid that amount. (Gattuso, supra, 42 Cal.4th at p. 568.) Under this method, the employee must keep detailed records of the amounts spent in each of the categories reimbursed by the employer as well as records apportioning those expenses between business and personal use. Thereafter, the employer must exercise its judgment to determine whether each of the expenses incurred by the employee was " 'necessary,' " under section 2802, i.e., reasonable under the circumstances. The reasonableness of an employee's choices would be considered in an employer's determination of whether an incurred expense was necessary. (Gattuso, at p. 568.) Second, the court considered the "mileage reimbursement method," under which the employee submits to the employer the total number of miles driven to perform job duties for a particular period, and the employer multiplies the work-required miles by a predetermined amount that approximates the per-mile cost of owning and operating an automobile. (Gattuso, supra, 42 Cal.4th at p. 569.) Since this method is an approximation of actual expenses, and section 2802 requires the employer to "fully reimburse" the employee for "all expenses actually and necessarily incurred," if an employer uses this method, "the employee must be permitted to challenge the resulting reimbursement payment." (Gattuso, at p. 569.) If the employee establishes that the reimbursement amount paid is less than the actual work-related expenses necessarily incurred "(as calculated using the actual expense method)," the employer must make up the difference. (Ibid.) Third, the court considered the "lump-sum payment" method, under which the employee need not submit any information about work-required miles driven or expenses incurred. Instead, the employer pays a fixed amount for automobile reimbursement, which is generally based on the employer's understanding of the employee's work-related duties, including miles typically or routinely driven. (Gattuso, supra, 42 Cal.4th at p. 570.) The Supreme Court held that section 2802 does not prohibit use of the lump-sum reimbursement method for work-required automobile expenses "provided that the amount paid is sufficient to provide full reimbursement for actual expenses necessarily incurred." (Gattuso, at p. 570.) As with the mileage reimbursement method, the court stated an employee must be permitted to challenge the amount of a lump-sum payment as being insufficient under section 2802, and may do so by comparing the amount reimbursed with the amount that would be payable under either the actual expense method or the mileage reimbursement method. (Gattuso, at p. 571.) The court also made clear that while an employer and employee may agree on a particular sum to be paid as automobile reimbursement, Labor Code section 2804 does not permit an agreement which relieves the employer of its statutory obligation to pay full reimbursement, or bar an employee from challenging a lump-sum reimbursement as insufficient under section 2802. (Gattuso, at p. 571.) Section 2804 provides: "Any contract or agreement, express or implied, made by any employee to waive the benefits of this article or any part thereof, is null and void, and this article shall not deprive any employee or his personal representative of any right or remedy to which he is entitled under the laws of this State." Gattuso acknowledged that "an employer's decision to use a lump-sum method rather than a mileage reimbursement system may have income tax consequences, affecting whether the resulting payments are exempt from withholding requirements and, ultimately, the extent to which they are taxable as income or instead treated as deductible expenses." (Gattuso, supra, 42 Cal.4th at p. 571.) Gattuso concluded, "section 2802 does not require an employer to use a reimbursement method that is congruent with any tax law or has any particular tax consequence. Of course, . . . any tax consequences that result from the employer's choice of reimbursement method should be considered in determining whether a particular payment provides the full measure of reimbursement that section 2802 requires." (Gattuso, at p. 571.) Gattuso also concluded that it is permissible for an employer to combine wages and business expense reimbursements in a single enhanced employee compensation payment or increase an employee's base salary or commission rate to include the statutorily required business expense reimbursement. However, "the employer must provide some method or formula to identify the amount of the combined employee compensation payment that is intended to provide expense reimbursement." (Gattuso, supra, Cal.4th at pp. 572-573.) The court suggested that employers who provide business expense reimbursement to employees through increases in base salary or commission rates should separately identify the amounts that represent payment for labor performed and the amounts that represent reimbursement for business expenses in order to comply with section 226, subdivision (a), which requires an employer to document the basis of employee compensation payments. (Gattuso, at pp. 574, 575.) Gattuso concluded: "an employer may satisfy its statutory business expense reimbursement obligation under section 2802 by paying employees enhanced compensation in the form of increases in base salary or commission rates, provided the employer establishes some means to identify the portion of overall compensation that is intended as expense reimbursement, and provided also that the amounts so identified are sufficient to fully reimburse the employees for all expenses actually and necessarily incurred." (Gattuso, supra, 42 Cal.4th at p. 575.) Section 2802, subdivision (a), requires an employer to "indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer." The defendant contended it satisfied its statutory obligation by paying the plaintiffs higher base salaries and higher commission rates than it paid to employees who were not required to use their vehicles to contact customers. The court concluded section 2802 required the defendant to fully reimburse its employees for vehicle expenses incurred in performing their employment tasks, and this could be done through a lump sum payment. (Gattuso, supra, 42 Cal.4th at p. 567, 570-571.) Discussing whether the vehicle reimbursement could be combined into a single payment with salary and commissions, the court noted that wages are subject to statutory restrictions, such as minimum wage laws, and may be subject to contractual provisions, which do not apply to the obligation to indemnify the employee for all business expenses. It concluded the payments may not be combined "in a way that would seriously hamper or effectively preclude enforcement of the various statutory and contractual obligations." (Id. at p. 572.) The court added: "This does not mean, however, that an employer is prohibited from combining wages and business expense reimbursements in a single enhanced employee compensation payment or from discharging its section 2802 business expense reimbursement obligation through an increase in base salary or in commission rates (or an increase in both salary and commission rates). It simply means that the employer must provide some method or formula to identify the amount of the combined employee compensation payment that is intended to provide expense reimbursement. Using that method or formula, the employee (and also officials charged with enforcement of state and federal wage laws) then can readily determine whether the employer has discharged all of its legal obligations as to both wages and business expense reimbursement. Although section 2802 does not expressly require the employer to provide an apportionment method, it is essential that employees and officials charged with enforcing the labor laws be able to differentiate between wages and expense reimbursements. Because providing an apportionment method is a practical necessity for effective enforcement of section 2802's reimbursement provisions, it is implicit in the statutory scheme." (Gattuso, supra, 42 Cal.4th at pp. 572-573.) The court also concluded the combined payment of vehicle expense reimbursement with salary and commissions did not violate section 226, subdivision (a). "We find nothing in the language of section 226, subdivision (a), that prohibits an employer from discharging its reimbursement obligations under section 2802 by increases in base salary or commission rates. Section 226, subdivision (a), requires the employer to document the basis of the employee compensation payments, including the gross wages earned, the hours worked, the number of piece-rate units earned, and each deduction taken. As we have explained, an employer that uses salary and/or commission increases to discharge its reimbursement obligation must also communicate to its employees the method or basis for apportioning any increases in compensation between compensation for labor performed and business expense reimbursement. Such a requirement, as noted, is necessary for effective enforcement of section 2802's reimbursement provisions and, thus, implicit in the statutory scheme." (Gattuso, supra, 42 Cal.4th at p. 574.)