In this series, we will explore some of the ways states vary from one another in their employment laws.

An employee takes a business trip, spends their own money on flights, lodging, and meals, and completes an expense report upon their return to the office. Another employee lives 10 minutes from the office but works from home most days for their own convenience and uses their home internet and cell phone for work. Is their employer legally required to reimburse both of them for their expenses? It depends on the state.

California has the broadest expense reimbursement law. The language of the statute itself does not necessarily sound all that broad — employers must indemnify employees for all “necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.” But in execution, courts have held that this reimbursement requirement can be far-reaching. 

For example, courts have held that employees are entitled to a reimbursement of a reasonable percentage of their cell phone and internet bills if they use their phones or computers for work. California courts have also held that remote employees may be entitled to reimbursement for office equipment such as computers and printers, furniture, and vehicle expenses in some situations. The California statute contains little language to limit an employee’s right to reimbursement, which has caused many employers to fear that employees may be entitled to reimbursement of nearly any work-related expense.

Illinois’ statute is similar to California’s, but it has some provisions that narrow an employer’s duty to reimburse. For example, an employer does not have to reimburse an Illinois employee’s expenses if those expenses were unauthorized or required or the employee did not follow the terms of the employer’s reimbursement policy. An expense may also not be reimbursable if an employer makes it clear that the expense is primarily for the employee’s benefit and that there should be no expectation of reimbursement. 

For example, if an employer makes it clear that an employee’s decision to work remotely rather than in the office is for their own convenience and that there will be no reimbursement for expenses related to remote work, then the employer likely will not be required to reimburse most expenses.

Montana, North Dakota, and South Dakota also have broad reimbursement requirements. However, several states take a narrower approach. Iowa only requires reimbursement of authorized expenses. New York requires reimbursement only if it is promised in a policy or agreement. States such as Colorado, New Jersey, and Washington only require reimbursement for uniform expenses. Arkansas requires reimbursement for traveling expenses incurred by traveling salespeople.