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Are we required to reimburse work-related expenses for employees who work from home?

Under federal law, employers are only required to reimburse for work-related expenses when the expenses drop the employee's earnings below minimum wage. Because many employees are working remotely, employers will need to keep a close eye on those earning near minimum wage to ensure the costs of working from home are not cutting into the employee's required minimum earnings. See 29 C.F.R. 531.35.

Several states, including California, the District of Columbia, Illinois, Iowa, Massachusetts, Montana and New York, do require employers to reimburse employees for necessary business-related expenses. Employers should refer to the state law in the location where the employee is working to determine the specific obligations for expense reimbursement. For example, California requires employers to reimburse employees when they are required to use their personal cellphones for work even if there is no increased cost to the employee. 

A written policy outlining expense reimbursement for telecommuting arrangements is recommended. Employers with employees working from multiple states may choose to tailor a different policy for each state or incorporate the most generous requirements into a single policy applicable to all employees.

Common telecommuting expenses that may be covered by state law reimbursement requirements include cell phone charges, internet or data plan charges and the purchase of office supplies or other services or equipment necessary for the employee's job.  


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