Although most states have fully or almost reopened, some businesses, such as Twitter and Salesforce, have implemented indefinite remote-working policies. Many other businesses will likely follow suit to some extent. As teleworking becomes the norm for many, the question of whether employers must reimburse employees for work-related expenses, such as computers or laptops, internet connection, cell phone bills, printers and printer paper, scanners, and the like are bound to arise.
On the federal level, employers do not have a legal obligation to reimburse or provide their employees for such business-related expenses. At the very least, the federal Fair Labor Standards Act (“FLSA”) disallows employers from requiring their employees to pay for or reimburse their employer for business-related expenses if that would cause the employee’s wages to fall below the federal or state minimum wage rate.
California, Iowa, Massachusetts, Montana, New York, Pennsylvania, Washington D.C., and Illinois are the few states that have already implemented expense reimbursement laws, with California having the broadest reimbursement law.
In New York, an employer who agrees to pay for “benefits or wage supplements” to employees “for the benefit of the employees” but fails to do so would be in violation of the law. “Benefits or wage supplements” include, among other items, “reimbursement for expenses.” Given the general statutory language of “reimbursement for expenses”, one could argue that, for example, if an employer entered into an agreement with its employee to pay for Internet and/or cell phone usage for work-related purposes, the employer is obligated to compensate the employee for such expenses. This law, however, does not apply to employees who are exempt from overtime pay. Currently, New Jersey does not have a state-specific expense reimbursement law.
Apart from contractual obligations, employers may be incentivized to help employees pay for work-related expenses to keep up employee morale and continue team building while teleworking. Whatever the policy, employers should consider being flexible so that significant work-related expenses do not fall solely on the employees.
Though each industry varies in what items or plans employees would more likely utilize, employers should review the potential expenses that employees may incur while teleworking during the days, weeks, or months ahead and update their expense reimbursement policies.
If you have questions or concerns about expense reimbursements and creating or upgrading your business’s expense reimbursement policies, please contact Chaim Book at cbook@mb-llp.com or Sheryl Galler at sgaller@mb-llp.com.
