I have an Employee Traveling Out of Town. Do I Need to Reimburse Him for All of His Expenses?
By Kevin M. Mosher • Sep 4, 2014
Legally, maybe. As this is an issue of wages, we need to understand both federal and state laws.
At the federal level there is no clear requirement that employers must reimburse employees for all of their out-of-pocket expenses incurred in work-related travel. However, where the expense incurred by the employee inures solely the benefit of the company and such expense takes the employees total weekly compensation below the federal minimum wage, there is risk that a minimum wage violation has occurred.
At the state level, several states have stepped into this area. Minnesota, for example, prohibits employees for paying for travel expenses (not regular commuting expenses) if it would dip their total compensation below the minimum wage. Moreover, at the time of the employee’s termination Minnesota employers must reimburse the employee for all travel expenses incurred on behalf of the company.
Informatively, travel expenses in Minnesota are considered “receipted out-of-pocket expenses for transportation, meals and lodging, or an agreed upon allowance, whichever is greater.” This should help guide Minnesota employers in creating policies around these expenses through employers outside the state, absent guidance from the particular state in which their employees work, have less specific guidance on what is and is not a travel expense. In these situations, crafting a policy that reimburses for reasonable business travel related expenses incurred on behalf of the company would seem appropriate.
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