Expense reimbursement laws vary sharply by state: federal law only stops unreimbursed work costs from dragging your pay below the $7.25 minimum wage, while roughly a dozen states — led by California, Illinois, Massachusetts, and New York — require employers to cover all necessary business expenses no matter what you earn. Everywhere else, your rights come from your employment contract or company handbook, not a statute.
Where you work controls which rules apply, not where your employer is headquartered. A remote worker sitting in California is covered by California’s statute even if the company is based in Texas.
The Federal Floor Every Worker Gets
The Fair Labor Standards Act doesn’t mention “expense reimbursement” by name, but 29 C.F.R. § 531.35 requires that wages be paid “free and clear” of unauthorized deductions. If your employer requires you to buy tools, uniforms, or supplies, those costs cannot reduce your effective pay below the federal minimum wage of $7.25 per hour, and they cannot cut into overtime owed for hours past 40 in a week.1eCFR. 29 CFR 531.35 – Free and Clear Payment; Kickbacks2U.S. Department of Labor. Minimum Wage
A warehouse worker earning $8.00 an hour who spends $40 on required steel-toed boots in a workweek has an effective wage that dips below $7.25, and that’s a federal violation. A salaried analyst earning $30 an hour who spends $50 on work supplies has no FLSA claim — the effective rate stays well above the floor. That gap is exactly where state law matters.3U.S. Department of Labor. Fact Sheet 16 – Deductions From Wages for Uniforms and Other Facilities Under the FLSA
States That Require Full Reimbursement
About a dozen states go beyond the FLSA floor and require employers to reimburse all necessary business expenses regardless of the worker’s pay rate. The shared principle: if your employer requires you to spend money to do your job, they owe you that money back.
California
California Labor Code Section 2802 is the broadest expense reimbursement statute in the country. Employers must cover “all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.” Courts have applied that language to personal cell phone bills used for work calls, home internet used for remote tasks, and mileage driven between job sites.4California Legislative Information. California Labor Code Section 2802
You can recover the unpaid expense plus interest running from the date you incurred it, and attorney’s fees. The state Labor Commissioner can also issue citations directly. The statute of limitations reaches back four years.
For a personal device used partly for work, California doesn’t require the employer to pay your entire phone bill. The standard is a “reasonable percentage” reflecting work-related usage, which many employers handle with a flat monthly stipend.
Illinois
Illinois law under 820 ILCS 115/9.5 mirrors California’s language: employers must reimburse “all necessary expenditures or losses” within the scope of employment and directly related to services performed. The employer must have authorized or required the expense, or failed to follow its own written reimbursement policy.5FindLaw. Illinois Code 820 ILCS 115/9.5 – Reimbursement of Employee Expenses
Employees must submit expenses with supporting documentation within 30 calendar days, though an employer’s written policy can extend that window. Missing the 30-day clock can sink an otherwise valid claim.
New York
New York Labor Law Section 198-c treats expense reimbursement as a “benefit or wage supplement” and makes it a misdemeanor for an employer to fail to provide agreed-upon benefits within 30 days. Corporate officers — the president, secretary, and treasurer — can be charged individually. That criminal exposure is unusual and gives the law real teeth.6New York State Senate. New York Labor Law Section 198-C – Benefits or Wage Supplements
One important limit: Section 198-c does not apply to executive, administrative, or professional employees earning more than $1,300 per week.6New York State Senate. New York Labor Law Section 198-C – Benefits or Wage Supplements
Massachusetts
Massachusetts has no standalone reimbursement statute. Courts have interpreted the state’s Wage Act to prohibit employers from shifting ordinary business costs onto employees, on the reasoning that unreimbursed expenses effectively reduce wages. State regulations at 454 CMR § 27.04(4) specifically require travel expense reimbursement.7General Court of Massachusetts. Massachusetts Code Chapter 149 Section 148 – Payment of Wages
Wage Act violations can result in treble damages, meaning three times the unreimbursed amount. That makes even modest claims worth pursuing and makes Massachusetts one of the most expensive states for non-compliant employers.
Minnesota
Minnesota Statutes Section 177.24 approaches the issue through wage deductions. Employers cannot deduct the cost of uniforms, required equipment, consumable supplies, or work-related travel if doing so pushes wages below the minimum. At termination, the employer must reimburse the full amount previously deducted for these items, though the employee can be required to return the physical property.8Minnesota Office of the Revisor of Statutes. Minnesota Statutes Section 177.24
Other Full-Reimbursement Jurisdictions
Montana, North Dakota, and South Dakota use language nearly identical to California’s, requiring employers to indemnify employees for expenses necessarily incurred while performing their duties. New Hampshire’s RSA 275:57 requires reimbursement within 30 days of the employee submitting proof of payment. Iowa requires authorized expenses to be reimbursed either in advance or within 30 days of the claim. The District of Columbia requires employers to cover the cost of tools needed for the job.
The common thread is the word “necessary.” Courts generally read that to cover any cost a reasonable person would need to incur to perform assigned work. If the expense primarily benefits the employer, it’s almost certainly covered.
States Without a General Reimbursement Requirement
Most states — including Texas, Florida, and Ohio — do not require employers to reimburse all business expenses. Workers there rely on the FLSA floor, so unreimbursed costs are only a legal problem if they push pay below minimum wage or eat into overtime.
Texas addresses uniforms specifically: employers cannot impose the cost of furnishing or cleaning required uniforms if doing so drops wages below the minimum.9Texas Workforce Commission. Allowable Deductions Under the FLSA Some industries have their own narrower rules — healthcare employers often must cover required medical screenings — but no general obligation covers office supplies, travel, or technology costs.
In these states, your best protection is a written reimbursement policy. If your employer’s handbook promises to cover certain expenses and then refuses to pay, you may have a breach-of-contract claim even without a state statute. Get the policy in writing before you start spending.
Remote Work Expenses
Working from home has forced expense law into new territory. When your employer requires remote work, the cost of internet service, a computer, a monitor, and even a desk can qualify as “tools of the trade” under the FLSA’s kickback rule. If those costs reduce a non-exempt worker’s pay below minimum wage, that’s a federal violation.1eCFR. 29 CFR 531.35 – Free and Clear Payment; Kickbacks
For higher-paid employees in states without comprehensive reimbursement laws, the FLSA doesn’t help. And if you volunteered to work from home for personal convenience rather than being directed to, even California may not require full reimbursement, since the expense arguably benefits you as much as the employer.
In full-reimbursement states, employer-directed remote work costs are generally covered. California, Illinois, and Massachusetts have all seen claims involving internet service, phone bills, and home office equipment.
Documenting Expenses So You Actually Get Paid
Documentation requirements are similar across states. Keep the original receipt showing date, vendor, amount, and specific items. Itemized invoices work better than credit card statements for professional services or bulk orders. For each expense, write a brief note explaining the business purpose — “client meeting lunch, Project Atlas kickoff” rather than just “meal.”
For mileage, the IRS standard rate for 2026 is 72.5 cents per mile for business use of a personal vehicle, and many employers use that rate as their benchmark.10Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents Per Mile, Up 2.5 Cents Keep a log with the date, destination, business purpose, and total miles. Regular commuting from home to your office doesn’t count; trips between work locations, to client sites, or for other business purposes do.
Match every line item on the reimbursement form to a specific document. Unmatched entries are the most common reason claims stall.
Enforcing Your Rights When the Employer Refuses
If the problem is a federal minimum-wage violation, file a complaint with the Department of Labor’s Wage and Hour Division by calling 1-866-487-9243 or submitting a complaint online. Investigations are confidential; the DOL won’t disclose your name or even confirm a complaint exists. Retaliation against workers who file or cooperate is prohibited.11U.S. Department of Labor. How to File a Complaint
In states with reimbursement statutes, you generally have more options. California workers can file a wage claim directly with the state Labor Commissioner, who can issue citations against non-compliant employers.4California Legislative Information. California Labor Code Section 2802 In New York, the violation is a criminal misdemeanor, so a district attorney can bring charges against the employer or its officers.6New York State Senate. New York Labor Law Section 198-C – Benefits or Wage Supplements Massachusetts workers can recover treble damages under the Wage Act.
Statutes of limitations vary. California gives you up to four years. In states without a specific reimbursement statute, you’re generally limited to the FLSA’s two-year window, or three years for willful violations. Outstanding claims don’t disappear when you resign or get terminated, but you should submit any pending expense claims before your last day whenever possible; once you lose access to company systems, uploading receipts and chasing approvals gets much harder.