Navigating Expense Reimbursement for “Work From Home” Employees

In the post-quarantine world, with the shift to telework operations for employees who previously reported to office locations, many employers are faced with new and unexpected business expenses—reimbursing employees’ home internet costs. A number of states have labor laws that dictate if, when, and how much employers are on the hook to pay their teleworking employees for home internet costs. Some states place the burden on employers to affirmatively reimburse a portion of their employees’ home internet costs, without any notice or request from the employees, while other state’s laws are less clear.

Generally, under the Fair Labor Standards Act, employers are not required to reimburse employees for work-related expenses, i.e., teleworking internet costs. That being said, Washington D.C, Seattle, and eleven states have varying laws in place governing when and how employers are required to reimburse employees for necessary work-related expenses. These states include: California, Illinois, Iowa, Massachusetts, Minnesota, Montana, New Hampshire, New York, North Dakota, Pennsylvania, and South Dakota.

Employers that have staff teleworking in these locations should be aware of the laws governing business expense reimbursement requirements. Each state’s law varies greatly and numerous class action lawsuits have been filed, particularly in California, alleging that employers have failed to reimburse teleworking employees for their home internet costs. 

For Further Information:

For more information on this alert or to discuss the issues relating to the required reimbursements, please contact Marjorie Obod or Jenna Coyle.