Employment law on travel expenses splits into two questions with different answers: when your employer must pay you for time spent traveling, and when your employer must reimburse what you spend. Under the Fair Labor Standards Act, travel that is part of your workday is paid time, but ordinary commuting is not. Reimbursement is thinner at the federal level: the FLSA only requires it when unreimbursed costs push your effective wage below the $7.25 federal minimum or eat into overtime. About a dozen states go further and require employers to cover all necessary business expenses. How those payments are taxed depends on whether the employer runs an “accountable” plan under IRS rules.
Travel Time That Must Be Paid
Your normal trip from home to work and back is not compensable, no matter how long or inconvenient. Federal regulations treat home-to-work travel before and after a regular workday as ordinary commuting, and employers owe nothing for it, whether you report to a fixed location or a different job site each day.1eCFR. 29 CFR 785.35 – Home to Work Travel The same rule usually covers a company vehicle used to commute, as long as the travel stays within the employer’s normal commuting area and rests on an agreement with the employee.2eCFR. 29 CFR 785.50 – Section 4 of the Portal-to-Portal Act A union contract or established company practice that treats the commute as paid time still controls.
Travel During the Workday
Once your shift starts, travel between job sites, from a reporting point out to a field assignment, or across town on a work errand is compensable. The Department of Labor treats this as “all in the day’s work” because you remain under your employer’s control the whole time.3U.S. Department of Labor. Fact Sheet 22 Hours Worked Under the Fair Labor Standards Act – Section: Travel Time
One-Day Assignments in Another City
If you normally work in one city and your employer sends you to another city for a single day, that travel is paid. It isn’t ordinary commuting because the employer created the trip for a specific assignment. You can subtract the time you’d usually spend getting to your regular workplace, but the rest must be compensated.4eCFR. 29 CFR 785.37 – Home to Work on Special One Day Assignment in Another City
Overnight Travel
Travel that keeps you away from home overnight follows its own rule. Time spent traveling during your normal working hours is compensable on every day of the week, including weekends and holidays. If your regular schedule is 9 to 5 Monday through Friday, Saturday travel between 9 and 5 is paid even though you wouldn’t ordinarily be working.5eCFR. 29 CFR 785.39 – Travel Away From Home Community
Time as a passenger on a plane, train, or bus outside your normal working hours is generally not compensable unless you’re actually working during the trip.5eCFR. 29 CFR 785.39 – Travel Away From Home Community Driving is different. Any employee who drives a vehicle while traveling is working while riding, except during meal breaks or when permitted to sleep in adequate employer-provided facilities.6eCFR. 29 CFR 785.41 – Work Performed While Traveling Employers sometimes try to limit compensable overnight travel to normal working hours even when the employee is behind the wheel. That isn’t how the regulation reads.
Remote Workers Traveling to the Office
When a remote employee travels to a central office for meetings or training and the trip requires an overnight stay, federal courts have found this isn’t ordinary commuting, because ordinary commuting assumes you leave and return home the same workday. The standard overnight-travel rules apply, and time spent traveling during normal working hours is paid.5eCFR. 29 CFR 785.39 – Travel Away From Home Community
When Employers Must Reimburse Expenses
Federal law doesn’t require your employer to reimburse travel expenses on its own terms. The FLSA only steps in when unreimbursed costs push your effective pay below the $7.25 federal minimum wage for any workweek, or when they cut into required overtime premiums.7U.S. Department of Labor. Wage and Hour Division Opinion Letter FLSA2020-12 If you earn well above minimum wage, federal law doesn’t require your employer to cover airfare, hotels, or meals.
State law is where most reimbursement rights live. Roughly a dozen states require employers to reimburse employees for all necessary business expenses regardless of wage level. Details vary, but the core principle is that the cost of the employer’s business shouldn’t come out of the worker’s pocket. In those states, mileage, lodging, and work-related meals must be covered. Elsewhere, the minimum-wage floor is your only federal protection.
Mileage
No federal law sets a required mileage rate, but the IRS business standard mileage rate is the working benchmark. For 2026, that rate is 72.5 cents per mile.8Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents Per Mile Reimbursements at or below the IRS rate are tax-free for both employer and employee, which is why most employers match it. Paying less isn’t a federal violation, but in states with mandatory reimbursement laws, courts sometimes treat the IRS rate as evidence of what is reasonable.
Per Diem
Many employers pay a flat daily per diem instead of tracking actual costs. The General Services Administration sets the federal benchmark: for fiscal year 2026, the standard rate is $166 per day in most locations, split between $107 for lodging and $59 for meals and incidental expenses.9GSA. GSA Releases FY 2026 CONUS Per Diem Rates for Federal Travelers Rates are higher in expensive metro areas. Per diem payments at or below the GSA rate are not taxable income.
How Travel Reimbursements Are Taxed
Whether your reimbursement lands on your W-2 as taxable wages depends entirely on how the employer structures its plan. The IRS draws a hard line between accountable and nonaccountable plans.
An accountable plan has to meet three requirements: the expense must have a business connection, you must substantiate it with adequate records, and you must return any excess reimbursement to the employer within a reasonable time.10eCFR. 26 CFR 1.62-2 – Reimbursements and Other Expense Allowance Arrangements Meet all three, and the reimbursement is excluded from your income entirely. It doesn’t appear on your W-2, and neither you nor your employer owes tax on it.
Miss any one of those requirements and the whole reimbursement becomes a nonaccountable plan payment. The full amount is treated as taxable wages, reported in Box 1, and subject to income tax withholding and payroll taxes. That can be a nasty surprise if you assumed the money was tax-free.
There is no backstop on your personal return. The Tax Cuts and Jobs Act eliminated the deduction for unreimbursed employee business expenses starting in 2018, and Congress has since made that change permanent. If your employer doesn’t reimburse you, or reimburses you under a nonaccountable plan, you bear the full cost with no tax offset.
Documentation You Need to Keep
Records are what separate a clean reimbursement or deduction from a dispute. The IRS requires documentation covering four elements for travel expenses: the amount of each separate expense, the dates of travel, the destination, and the business purpose.11Internal Revenue Service. Publication 463 (2025), Travel, Gift, and Car Expenses Credit card statements alone usually aren’t enough, because they don’t show what was bought or why.
For vehicle expenses, keep a mileage log with the date of each trip, the destination, the business purpose, and odometer readings. Record entries at or near the time of the trip. The IRS gives more weight to timely records than to reconstructions done later. Receipts aren’t required for non-lodging expenses under $75 or for transportation costs where a receipt isn’t readily available.11Internal Revenue Service. Publication 463 (2025), Travel, Gift, and Car Expenses
What You Can Recover If Your Employer Doesn’t Pay
Federal remedies for unpaid travel time are stronger than many employees realize. If your employer fails to pay for compensable travel hours, that is a wage violation under the FLSA. You can recover the unpaid wages plus an equal amount in liquidated damages, effectively doubling what you’re owed.12Office of the Law Revision Counsel. 29 USC 216 – Penalties Attorney’s fees and costs are also recoverable, which makes smaller claims worth pursuing.
For unreimbursed expenses, federal remedies are limited to situations where the costs dropped your pay below minimum wage or cut into overtime. In states with mandatory reimbursement laws, penalties can be more significant, and some states allow recovery of attorney’s fees on top of the expenses owed.
You don’t have to file a lawsuit to start. Wage complaints can go to the Department of Labor’s Wage and Hour Division, which can investigate and pursue recovery on your behalf. State labor agencies handle state-level expense claims.
Retaliation Is Illegal
The FLSA makes it illegal for an employer to fire, demote, cut hours, or take any other adverse action against you for filing a wage complaint, participating in an investigation, or testifying in a related proceeding.13Office of the Law Revision Counsel. 29 USC 215 – Prohibited Acts The protection covers complaints to a supervisor, to the Department of Labor, and in court.
If retaliation happens, you can bring a separate claim for it. Remedies include reinstatement, back pay, and liquidated damages equal to the lost wages.12Office of the Law Revision Counsel. 29 USC 216 – Penalties The retaliation claim sometimes ends up worth more than the underlying wage dispute, which is why employers who understand the exposure tend to take travel-pay complaints seriously the first time.