A field tech spends the employer’s money all day with his own stuff: his phone runs the dispatch app, his truck gets him to the job, his boots and his meter are his. Whether you have to pay him back depends on where he works. Nine states (California, Illinois, Iowa, Massachusetts, Montana, New Hampshire, North Dakota, South Dakota and DC) have statutes that require reimbursing necessary or required expenses, with California’s the broadest and the most litigated. Nine more limit what you can deduct for tools, uniforms and damage, or make a promised reimbursement enforceable as wages. And everywhere, the federal minimum wage floor means a low-paid helper who buys his own gas is a wage claim waiting to happen.
This guide covers every state’s reimbursement and deduction rule, the IRS mileage rate (which the IRS raised mid-year to 76 cents a mile on July 1, 2026, from 72.5), the tax treatment of allowances and stipends, and the trades-specific questions: cell phones, uniforms, hand tools, PPE and damage. Statutes current as of October 2026.
Quick answer: Nine states require expense reimbursement by statute: California (all necessary expenses, including a share of a personal cell phone bill and mileage at the IRS rate or actual cost), Illinois (necessary expenses, submitted within 30 days; a written policy may cap them), Iowa (expenses the employer authorized, within 30 days), New Hampshire (expenses incurred at the employer’s request, within 30 days), Massachusetts (required workday travel, plus a minimum-wage floor enforced with treble damages), Montana, North Dakota and South Dakota (all necessary expenditures), and DC (required uniforms and tools). Nine (New York, Pennsylvania, Washington, Colorado, Connecticut, Kentucky, Minnesota, Nevada, New Jersey) restrict deductions for tools, uniforms and damage or make promised reimbursements enforceable. 33 have no state rule beyond the FLSA’s requirement that expenses never push pay below minimum wage. The IRS mileage rate is 76 cents from July 1, 2026.
On this page
The Federal Floor: Kickbacks, Accountable Plans and the Mileage Rate
Federal law never says “reimburse your employees.” It says three narrower things that add up to a floor in every state:
- The kickback rule (29 CFR 531.35). Wages must be paid “free and clear.” If a non-exempt employee has to spend money primarily for the employer’s benefit (fuel and wear on a personal vehicle driven between jobs, a required uniform, tools the employer requires), that cost is treated as a kickback of wages. If it drops the employee’s effective pay for the week below $7.25 an hour (or the state minimum), or cuts into overtime, the employer owes the difference plus liquidated damages. For a tech earning $28 an hour this rarely bites; for a helper at $15 driving 200 miles a week, it does. In Parker v. Battle Creek Pizza (6th Cir. 2024) the court rejected both the IRS rate and a “reasonable approximation” as automatic measures and required the employer to show the employee’s actual costs were covered, which is pushing employers toward tracked mileage.
- Accountable plans (26 CFR 1.62-2). Reimbursements are tax-free to the employee and payroll-tax-free to you only if there’s a business connection, the employee substantiates the expense within a reasonable time (60 days is the IRS safe harbor), and any excess advance is returned (120 days). A flat car allowance with no mileage log is taxable wages. A per-mile reimbursement at or below the IRS rate with a log is not.
- The standard mileage rate. 72.5 cents a mile for business driving from January 1 to June 30, 2026, and 76 cents from July 1, 2026, after a rare mid-year increase for fuel prices. The rate is the tax-free ceiling for per-mile reimbursement and the presumptive measure of adequacy in California; it isn’t a legal mandate anywhere, and an employer may reimburse actual costs instead.
- OSHA PPE (29 CFR 1910.132(h)). Separate from wage law, the employer must pay for required personal protective equipment (hard hats, gloves, respirators, fall protection, hearing protection), with exceptions for everyday safety-toe footwear and prescription safety eyewear the employee can wear off the job, and for equipment the employee loses or intentionally damages.
The Nine Mandate States
| State | What must be reimbursed | Timing | Penalty |
|---|---|---|---|
| California | All necessary expenses: mileage, phone, tools, uniforms, losses | Reasonable time; IRS rate presumptively adequate | Expenses + interest + mandatory fees; PAGA |
| Illinois | Necessary expenses within scope; written policy may cap | Employee submits within 30 days; employer policy period | 5%/month + fees + $250 |
| Massachusetts | Required workday travel; promised expenses; minimum-wage floor | With payroll | Mandatory treble damages |
| Iowa | Expenses the employer authorized | Within 30 days of claim | 5%/day up to amount + fees |
| New Hampshire | Expenses incurred at employer’s request | Within 30 days of proof of payment | Wage claim; up to $2,500 per violation |
| Montana | All necessary expenditures and losses | Reasonable policy | Civil claim; 110% wage penalty where applicable |
| North Dakota | All necessary expenditures and losses | Reasonable policy | Civil claim; up to double if willful |
| South Dakota | All necessary expenditures and losses | Reasonable policy | Civil claim; double after demand |
| District of Columbia | Required uniforms and tools (purchase and maintenance) | Direct pay, receipt, or allowance | Up to treble under Wage Theft Prevention Act |
Vehicles: Van, Mileage, Allowance or FAVR
The vehicle is the biggest expense and the easiest to get wrong. Five arrangements, and how the law and the IRS treat each:
| Vehicle arrangement | Tax and legal treatment | Notes |
|---|---|---|
| Company van, employer pays fuel | Nothing to reimburse; personal use is a taxable fringe unless you track it (commuting-only use can be valued at $1.50 each way) | Simplest; standard for trades |
| Personal vehicle, per-mile reimbursement at the IRS rate (76¢ from July 1, 2026) | Tax-free to the tech under an accountable plan with mileage logs; deductible to you | Required measure in CA unless actual costs are higher; safe harbor everywhere |
| Personal vehicle, flat monthly car allowance | Taxable wages to the tech (and subject to payroll tax) unless paired with mileage substantiation; counts as reimbursement in CA/IL only if it actually covers costs | Common, but overpays low-mileage techs and underpays high-mileage ones |
| Personal vehicle, FAVR plan (fixed + variable rate) | Tax-free if it meets IRS rules (at least 5 employees, standard vehicle cost limits, 5,000+ business miles) | Best for fleets of 5+ personal vehicles across regions |
| Personal vehicle, nothing paid | Violates CA, IL, MA, IA (if authorized), NH (if requested), MT, ND, SD; everywhere else, violates the FLSA if costs push pay below minimum wage for the week | Not a lawful option for a field tech in the mandate states |
Two details trip up shops that pay mileage. First, commuting isn’t reimbursable or taxable anywhere: home to the first job and last job to home are the tech’s own miles, unless the employer requires a stop at the shop or (in California) requires and restricts a company vehicle. Second, the mileage log is the whole case: date, start, end, purpose, miles. GPS data from the dispatch app satisfies the IRS and every state agency, and it’s the same record that settles drive-time overtime disputes.
Phones, Uniforms, Tools, PPE and Damage
| Expense | Who pays, and where |
|---|---|
| Personal cell phone used for the dispatch app | CA: reasonable share of the bill, even on an unlimited plan (Cochran). IL: necessary expense, policy may set a stipend. Elsewhere: not required, but a $30–$50 monthly stipend is tax-free if it reasonably reflects business use (IRS Notice 2011-72) |
| Company-issued phone | No reimbursement issue; personal use is a nontaxable de minimis fringe if the phone is provided for business reasons |
| Required uniforms with logo | Employer’s cost in CA, DC, NV, WA, CO, CT, HI, KS, MA (deposit limits), NY (or maintenance pay); can’t reduce pay below minimum wage anywhere (FLSA) |
| Hand tools the tech owns | CA: employee may supply customary hand tools only if paid at least 2x minimum wage; otherwise the employer provides. Elsewhere: lawful for the tech to own them, but deductions or required purchases can’t cut pay below minimum wage |
| Power tools, meters, ladders, safety gear | Employer’s cost in the mandate states; OSHA requires the employer to pay for most required PPE everywhere (29 CFR 1910.132(h)), with exceptions for ordinary safety-toe footwear and prescription safety glasses |
| Damage to the van, broken customer property, lost tools | Can’t be deducted without a post-loss written authorization in MN, ND, WI; barred outright in KY, NJ, NY, CT (without approved form); CA bars it absent dishonesty or gross negligence. Everywhere: never below minimum wage |
| Training the employer requires (EPA 608, OSHA 10, manufacturer certs) | CA/IL/MT/ND/SD: necessary expense, reimbursable. Elsewhere: time is paid if required; cost is policy. Stay-or-pay clawbacks are restricted in CA (AB 692) and NY from 2027 |
The California cell phone rule deserves a sentence of its own because it surprises everyone: in Cochran v. Schwan’s Home Service (2014) the court held that an employer that requires an employee to use a personal phone for work must reimburse a reasonable percentage of the bill even if the employee has an unlimited plan and incurs no extra cost, because otherwise the employer is passing its operating expense to the employee. Illinois reads its statute the same way. A $25 to $50 monthly stipend, stated in the policy as a phone reimbursement, satisfies both and is tax-free if it reasonably reflects business use; a company phone eliminates the question.
Recent Changes
What’s new: The IRS raised the business mileage rate mid-year to 76 cents on July 1, 2026 (from 72.5), only the fourth mid-year change since 2008; reimbursement policies pegged to “the IRS rate” should have updated with it. Illinois’ Department of Labor adopted expense-reimbursement rules in 2023 (56 Ill. Adm. Code 300.540) spelling out the factors for “primarily for the employer’s benefit.” The Sixth Circuit’s Parker decision (2024) made the FLSA kickback analysis for personal-vehicle use stricter in Kentucky, Michigan, Ohio and Tennessee. Minnesota’s 2024 wage theft amendments tightened deduction rules. California’s AB 692 (2027) and New York’s Trapped at Work Act (December 2026) restrict clawing back training costs from departing employees. No state added a general reimbursement mandate in 2025 or 2026.
State-by-State Breakdown
Red chips mark states with a statutory duty to reimburse necessary or required expenses; amber marks states that restrict deductions for tools, uniforms and damage or make promised reimbursements enforceable as wages; grey marks states with no rule beyond the federal minimum-wage floor (most still require written authorization for any deduction, noted in the block). Each block links the statute or agency page.
Jump to your state
Alabama No State Mandate
State rule: None. Alabama has no expense reimbursement or wage-deduction statute; the FLSA kickback rule is the only limit.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Alaska No State Mandate
State rule: None. Alaska has no general reimbursement statute, though its wage law bars deductions that aren’t authorized in writing and for the employee’s benefit (AS 23.10.043).
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Arizona No State Mandate
State rule: None. Arizona requires written authorization for most wage deductions (A.R.S. § 23-352) but doesn’t require reimbursing expenses.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Arkansas No State Mandate
State rule: None. Arkansas has no reimbursement statute.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
California All Necessary Expenses (Lab. Code 2802)
Statute / Agency: Cal. Labor Code § 2802; Wage Orders § 9
What must be reimbursed: “All necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties”: personal-vehicle mileage, cell phone use (a reasonable percentage of the bill even on an unlimited plan, per Cochran v. Schwan’s, 2014), home internet for remote dispatchers, required tools and uniforms (the Wage Orders let employees earning at least twice the minimum wage supply their own hand tools customary to the trade), training the employer requires, and losses like a cracked phone screen on the job. Employees can’t waive it.
How and when: Any method that fully reimburses: the IRS mileage rate is presumptively adequate but the employee may prove actual costs were higher (Gattuso v. Harte-Hanks, 2007); a lump-sum allowance works only if it’s identified as reimbursement and actually covers the cost. No statutory deadline, but the Labor Commissioner expects reimbursement within a reasonable time after the expense is submitted.
Penalty: Unreimbursed expenses plus interest and mandatory attorney fees (§ 2802(c)), recoverable through the Labor Commissioner or a lawsuit; a PAGA penalty of $100 per employee per pay period on top. Expense claims are a standard count in every California wage class action.
Trades note: If a tech uses a personal phone for the dispatch app, you owe part of the bill; if he drives his own truck to jobs, you owe mileage; if you require steel-toe boots of a particular brand, you buy them. Company phones and company vans are the simplest compliance. See California employment laws for trade employers.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Colorado Deduction Limits
Statute / Agency: C.R.S. § 8-4-105
State rule: No general reimbursement duty. Deductions for tools, uniforms, equipment or damage are allowed only if required by law, for the employee’s benefit with written authorization, or to recover an actual theft or loss with a police report; required uniforms can’t be charged to the employee at all, and deposits for them must be returned.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Connecticut Deductions Need Approved Authorization
Statute / Agency: Conn. Gen. Stat. § 31-71e
State rule: No general reimbursement duty, but Connecticut bars any wage deduction that isn’t required by law or authorized by the employee in writing on a form approved by the Labor Commissioner, which rules out charging techs for tools, uniforms, damage or shortages. Uniforms that can’t double as street clothes must be provided or paid for.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Delaware No State Mandate
State rule: None. Delaware limits deductions to those required by law or authorized in writing for the employee’s benefit (19 Del. C. § 1107) but has no reimbursement statute.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
District of Columbia Tools and Uniforms
Statute / Agency: 7 DCMR § 910; D.C. Code § 32-1008
What must be reimbursed: The cost of purchasing and maintaining any uniform or tools the employer requires. Instead of paying the actual cost, the employer may pay a weekly uniform allowance set by regulation when the employee launders the uniform. Vehicle and phone expenses aren’t covered by the regulation but fall under the minimum-wage kickback rule.
How and when: Pay for the items directly, reimburse on receipt, or pay the regulatory allowance; the Department enforces through wage claims.
Penalty: Treated as unpaid wages under the Wage Theft Prevention Act: liquidated damages up to treble, plus fees and administrative penalties.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Florida No State Mandate
State rule: None. Florida has no reimbursement or deduction statute; the FLSA rule is the only limit.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Georgia No State Mandate
State rule: None. Georgia has no reimbursement or deduction statute.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Hawaii No State Mandate
State rule: None. Hawaii bars deductions for breakage, cash shortages, required uniforms and medical exams (HRS § 388-6) but has no general reimbursement duty.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Idaho No State Mandate
State rule: None. Idaho requires written authorization for deductions (Idaho Code § 45-609) but has no reimbursement statute.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Illinois Necessary Expenses (Wage Payment Act § 9.5)
Statute / Agency: 820 ILCS 115/9.5; 56 Ill. Adm. Code 300.540
What must be reimbursed: Since January 1, 2019, all “necessary expenditures or losses incurred by the employee within the employee’s scope of employment and directly related to services performed for the employer,” which IDOL’s 2023 rules read to include personal-vehicle mileage, cell phone and data plans used for work, required tools and equipment, and home internet for remote work. Expenses the employee incurs through their own negligence, normal wear, or theft (unless the employer was negligent) are excluded.
How and when: The employee must submit the expense with supporting documentation (or a signed statement if receipts don’t exist) within 30 calendar days, or a longer period set by written policy. An employer with a written reimbursement policy may cap or deny amounts above the policy, unless the policy provides no reimbursement or a de minimis amount. No written policy means no cap.
Penalty: Unreimbursed expenses are unpaid wages under the Act: 5% per month in statutory damages, attorney fees, and a $250 administrative fee per claim. Chicago and Cook County add nothing further.
Trades note: Illinois shops need a written expense policy with a mileage rate (the IRS rate is the safe choice), a phone stipend, and a 30-day submission rule; without one, every tech can claim actual costs with no cap.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Indiana No State Mandate
State rule: None. Indiana’s wage deduction law (Ind. Code § 22-2-6-2) requires a signed, revocable written assignment for deductions, including for uniforms and equipment (capped at the lesser of $2,500 a year or 5% of weekly pay), but there is no reimbursement duty.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Iowa Authorized Expenses, 30 Days
Statute / Agency: Iowa Code § 91A.3(6)
What must be reimbursed: Expenses the employee incurs with the employer’s authorization, in advance of or after the expense: mileage on a personal vehicle driven at the employer’s direction, parts bought for a job, required tools. Iowa’s duty turns on authorization, so a written policy defining what’s approved defines the obligation.
How and when: Reimburse within 30 days after the employee submits an expense claim; if the employer advances money, it’s due before the expense when requested. Unauthorized expenses aren’t owed.
Penalty: Unreimbursed authorized expenses are collected as wages: liquidated damages of 5% per day up to the amount owed (for intentional nonpayment) and attorney fees under § 91A.8.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Kansas No State Mandate
State rule: None. Kansas requires written authorization for deductions and bars charging employees for required uniforms or the employer’s losses (K.A.R. 49-20-1), but has no reimbursement statute.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Kentucky No Deductions for Losses or Damage
Statute / Agency: KRS § 337.060
State rule: No general reimbursement duty, but Kentucky bars deductions for fines, cash shortages, breakage, losses from bad checks or defective workmanship, and lost or stolen property, with or without the employee’s consent. A dropped compressor or a lost company tool can’t come out of the tech’s check.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Louisiana No State Mandate
State rule: None. Louisiana bars fines and assessments against employees (La. R.S. 23:635) but has no reimbursement statute.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Maine No State Mandate
State rule: None. Maine requires written authorization for deductions and bars charging employees for the employer’s business losses (26 M.R.S. § 635), but has no reimbursement duty.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Maryland No State Mandate
State rule: None. Maryland allows deductions only as required by law, ordered by a court, or authorized in writing and approved by the Commissioner (Lab. & Empl. § 3-503); no reimbursement statute.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Massachusetts Required Travel and Minimum-Wage Floor
Statute / Agency: 454 CMR 27.04(4)(b); M.G.L. c. 149, § 148, 150; c. 151
What must be reimbursed: Transportation expenses when an employee is required to travel from one place to another during the workday (between jobs, to the supply house, from the shop to a site), under the minimum-wage regulations. The Attorney General’s Fair Labor Division also treats required expenses that reduce pay below the minimum wage, and any reimbursement promised by policy, as wage violations. Required uniforms can’t be charged to the employee, and deposits for them are limited.
How and when: At the IRS rate or actual cost, with the regular payroll; promised reimbursements become wages due on the normal schedule.
Penalty: Wage Act violations carry mandatory treble damages and attorney fees under c. 149 § 150; the AG can also issue civil citations up to $25,000.
Trades note: A Massachusetts tech who drives a personal vehicle from job to job and isn’t paid mileage has a treble-damages claim for every mile. Pay it or put him in a company van.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Michigan No State Mandate
State rule: None. Michigan requires written consent for deductions and bars deductions for required uniforms or damage without consent (MCL § 408.477), but has no reimbursement statute.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Minnesota Equipment Deductions Refunded at Separation
Statute / Agency: Minn. Stat. § 177.24 subd. 4–5; § 181.79
State rule: No general reimbursement duty, but an employer may deduct or require a deposit for uniforms, equipment, consumable supplies and travel expenses only up to $50 in total, never below minimum wage, and must refund the full amount when employment ends and the items are returned. Deductions for lost or damaged property or shortages require a written authorization signed after the loss (§ 181.79).
Trades note: Minnesota’s 2024 wage theft amendments made willful violations criminal; the practical rule is that tools, uniforms and phones are the employer’s cost.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Mississippi No State Mandate
State rule: None. Mississippi has no reimbursement or deduction statute.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Missouri No State Mandate
State rule: None. Missouri has no reimbursement statute; its wage law limits deductions only by the minimum wage floor.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Montana Indemnify Necessary Expenses
Statute / Agency: MCA § 39-2-701
What must be reimbursed: Everything the employee “necessarily expends or loses in direct consequence of the discharge of the employee’s duties” or in obeying the employer’s directions, which Montana courts apply to vehicle mileage, tools, phones and losses on the job. Expenses from the employee’s own negligence are excluded.
How and when: No statutory deadline or method; the IRS mileage rate and actual receipts are the accepted measures. A reasonable written policy with a submission period is enforceable.
Penalty: Recovered as a civil claim (and, where the expense reduces wages, through the Wage Payment Act with its 110% penalty); Montana’s Wrongful Discharge Act protects employees fired for asserting the right.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Nebraska No State Mandate
State rule: None. Nebraska requires written agreement for deductions (Neb. Rev. Stat. § 48-1230) but has no reimbursement statute.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Nevada Uniforms Provided; No Rebates
Statute / Agency: NRS 608.165, 608.160, 608.110
State rule: No general reimbursement duty, but an employer must furnish (without cost) any uniform of distinctive design or color it requires, and clean it if it needs special care; may not require an employee to rebate any part of wages; and may deduct only with written authorization for the employee’s benefit. Required tools can’t be charged against pay below the minimum wage.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
New Hampshire Employer-Requested Expenses, 30 Days
Statute / Agency: RSA 275:57
What must be reimbursed: Expenses the employee incurs “in connection with his or her employment and at the request of the employer,” which New Hampshire reads to require prior authorization (a written policy or a manager’s direction). Mileage on a personal vehicle the employer told the tech to drive, parts purchased at the employer’s request and required uniforms qualify; an expense the employee chose on their own doesn’t. The statute doesn’t apply where the employer has a written policy that the expense isn’t reimbursable, unless the employer later approved it.
How and when: Within 30 days after the employee presents proof of payment.
Penalty: Unreimbursed expenses are collected as wages through the Department of Labor, with liquidated damages and civil penalties up to $2,500 per violation.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
New Jersey Deduction Limits
Statute / Agency: N.J.S.A. 34:11-4.4
State rule: No general reimbursement duty, but New Jersey permits only the deductions listed in the statute (taxes, benefits, union dues, employee-authorized savings and loans, and a few others); charging employees for tools, uniforms, damage or shortages isn’t on the list and is a violation with 200% liquidated damages under the Wage Theft Act.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
New Mexico No State Mandate
State rule: None. New Mexico has no reimbursement statute; deductions are limited by the minimum wage floor and written authorization.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
New York Promised Reimbursements Are Wages; Uniform Pay
Statute / Agency: N.Y. Labor Law § 193, 198-c; 12 NYCRR 142-2.5(c)
State rule: No general reimbursement duty, but any expense reimbursement the employer has promised (in a policy, handbook or offer letter) is a “benefit or wage supplement” under § 198-c that must be paid within 30 days of becoming due, with misdemeanor exposure for willful failure. Section 193 bars deductions for tools, uniforms, damage or shortages. Employers that require uniforms must either launder them or pay weekly uniform maintenance pay set by the wage order, and the cost of a required uniform can’t bring pay below minimum wage.
Trades note: New York City’s Earned Safe and Sick Time Act and the state’s wage-theft statutes don’t add a reimbursement duty, but a handbook that says “mileage reimbursed at the IRS rate” creates one.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
North Carolina No State Mandate
State rule: None. North Carolina requires written authorization for deductions and notice of the amount (N.C.G.S. § 95-25.8) but has no reimbursement statute.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
North Dakota Indemnify Necessary Expenditures
Statute / Agency: N.D.C.C. § 34-02-01
What must be reimbursed: “All that the employee necessarily expends or loses in direct consequence of the discharge of the employee’s duties” or in obeying the employer’s directions, excluding losses from the employee’s own ordinary negligence. The Department of Labor and Human Rights reads this to cover personal-vehicle mileage, required tools and phone costs.
How and when: No statutory deadline; reasonable written policies with the IRS mileage rate are the norm. North Dakota also bars deductions for cash shortages, breakage or damage without a written authorization signed after the loss (N.D.C.C. § 34-14-04.1).
Penalty: Civil claim for the expenses, or a wage claim when the expense reduced pay; up to double damages for willful nonpayment.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Ohio No State Mandate
State rule: None. Ohio has no reimbursement statute; deductions are limited only by the minimum wage floor and written authorization.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Oklahoma No State Mandate
State rule: None. Oklahoma requires written authorization for deductions (40 O.S. § 165.3a) but has no reimbursement statute.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Oregon No State Mandate
State rule: None. Oregon bars deductions for the employer’s costs (tools, uniforms, damage) unless authorized in writing and for the employee’s benefit (ORS 652.610), but has no general reimbursement duty.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Pennsylvania Promised Reimbursements Under the WPCL
Statute / Agency: 43 P.S. § 260.2a, 260.3; 34 Pa. Code § 9.1
State rule: No general reimbursement duty, but the Wage Payment and Collection Law treats “reimbursement for expenses” that the employer has agreed to provide as a fringe benefit or wage supplement due on the regular payday, with 25% liquidated damages and fees for late payment. Deductions are limited to those listed in the regulations and authorized in writing.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Rhode Island No State Mandate
State rule: None. Rhode Island requires written authorization for deductions and bars deductions for required uniforms or damage (R.I. Gen. Laws § 28-14-10), but has no reimbursement statute.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
South Carolina No State Mandate
State rule: None. South Carolina requires written notice of deductions at hire and 7 days’ notice of changes (S.C. Code § 41-10-30) but has no reimbursement statute.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
South Dakota Indemnify Necessary Expenditures
Statute / Agency: SDCL § 60-2-1
What must be reimbursed: “All that the employee necessarily expends or loses in direct consequence of the discharge of duties” or in obeying the employer’s directions, excluding losses from the employee’s own ordinary negligence. Mileage on a personal vehicle, required tools and work phone use qualify.
How and when: No statutory deadline or method; the IRS rate and receipts are accepted. South Dakota also lets an employer withhold a final check until company property is returned, so the two rules interact at separation.
Penalty: Civil claim for the expenses; wage-claim remedies (double wages after demand) when the expense reduced pay below what was earned.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Tennessee No State Mandate
State rule: None. Tennessee has no reimbursement statute; deductions require written authorization under Tenn. Code § 50-2-110.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Texas No State Mandate
State rule: None. Texas has no reimbursement statute; the Payday Law allows deductions only as required by law, ordered by a court, or authorized in writing for a lawful purpose (Lab. Code § 61.018), which can include tools or uniforms if the employee signs and pay stays above minimum wage. A written mileage policy is a matter of contract, enforceable through TWC as agreed wages. See our Texas guide.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Utah No State Mandate
State rule: None. Utah requires written authorization for deductions (Utah Code § 34-28-3) but has no reimbursement statute.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Vermont No State Mandate
State rule: None. Vermont has no reimbursement statute; deductions are limited to those authorized in writing for the employee’s benefit.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Virginia No State Mandate
State rule: None. Virginia bars deductions for the employer’s losses, breakage or shortages without written consent (Va. Code § 40.1-29) but has no reimbursement statute.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Washington Minimum-Wage Floor; Tool and Uniform Rules
Statute / Agency: RCW 49.46.020; WAC 296-126-028; RCW 49.12.450
State rule: No general reimbursement duty, but L&I rules bar deductions for tools, uniforms, breakage or shortages during ongoing employment except as authorized in writing for the employee’s benefit, require employers to furnish any required uniform that can’t be worn as street clothes, and treat required expenses that reduce pay below the minimum wage ($17.13 in 2026) as a wage violation. Seattle’s wage theft ordinance mirrors the state rule.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
West Virginia No State Mandate
State rule: None. West Virginia requires written authorization for deductions (W. Va. Code § 21-5-3) but has no reimbursement statute.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Wisconsin No State Mandate
State rule: None. Wisconsin bars deductions for defective workmanship, loss, theft or damage without the employee’s written authorization after the loss or a court finding (Wis. Stat. § 103.455), but has no reimbursement duty.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Wyoming No State Mandate
State rule: None. Wyoming requires written authorization for deductions (Wyo. Stat. § 27-4-104) but has no reimbursement statute.
Federal floor (every state): no general reimbursement duty, but under the FLSA’s kickback rule (29 CFR 531.35) the cost of tools, uniforms, fuel or vehicle wear a non-exempt employee bears for the employer’s benefit can’t cut their pay below minimum wage or into overtime for that week; and reimbursements are tax-free only under an accountable plan (business purpose, substantiated within about 60 days, excess returned within 120). The IRS business mileage rate is 76 cents a mile from July 1, 2026 (72.5 cents for January through June).
Reimbursement and deduction rules from state statutes, labor department guidance and leading cases as of October 2026; federal rules from the FLSA regulations, IRS Notice 2026 mileage announcements and 26 CFR 1.62-2. Many states have additional rules for specific deductions (cash shortages, loans, advances) not covered here; collective bargaining agreements may provide otherwise. Local ordinances (Seattle, Chicago, NYC) generally mirror state rules on this topic.
Running the Business
- Vehicle math: tax deductions for trades business owners covers the owner’s side of vehicle costs; the best states with no income tax for a service business covers where a car allowance costs the least.
- The hours attached to the miles: overtime laws by state (drive time between jobs is paid) and meal and rest break laws by state (lunch in the van isn’t a break).
- Deductions at separation: final paycheck laws by state explains why the unreturned drill can’t come out of the last check.
- Misclassification: a “1099 helper” who supplies his own truck and tools is still an employee if you control the work, and then every mile is yours; see the 1099 helper trap.
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FAQ
Which states require employers to reimburse business expenses?
Nine by statute: California (Labor Code 2802, all necessary expenses), Illinois (Wage Payment and Collection Act section 9.5, necessary expenses submitted within 30 days), Iowa (expenses the employer authorized, within 30 days), New Hampshire (expenses incurred at the employer’s request, within 30 days), Massachusetts (required workday travel under the minimum wage regulations, plus the Wage Act), Montana, North Dakota and South Dakota (indemnity statutes covering all necessary expenditures), and the District of Columbia (required uniforms and tools). New York and Pennsylvania make promised reimbursements enforceable as wages, and every state is subject to the federal rule that expenses can’t push pay below minimum wage.
What is the IRS mileage rate for 2026?
72.5 cents per business mile from January 1 through June 30, 2026, and 76 cents per mile from July 1, 2026, after the IRS announced a mid-year increase for fuel costs. Reimbursement at or below the rate is tax-free with a mileage log; payments above it are taxable wages unless the employee substantiates higher actual costs. The rate isn’t legally mandatory in any state, but California treats it as the presumptively adequate measure under Labor Code 2802.
Do I have to pay for a technician’s personal cell phone?
In California, yes: a reasonable percentage of the bill if the tech is required to use the phone for work, even on an unlimited plan (Cochran v. Schwan’s, 2014). In Illinois, yes, as a necessary expense, though a written policy can set the amount. In Montana, North Dakota and South Dakota, the indemnity statutes reach it. Elsewhere it’s not required, but a $25 to $50 monthly stipend labeled as a phone reimbursement is tax-free when it reasonably reflects business use. A company phone avoids the question entirely.
Is a car allowance taxable?
A flat monthly allowance with no mileage substantiation is taxable wages subject to income and payroll taxes, because it fails the IRS accountable-plan rules. A per-mile reimbursement at or below the IRS rate with a log is tax-free. A FAVR plan (fixed and variable rate) is tax-free if it meets IRS requirements (generally at least five covered employees driving 5,000 or more business miles a year in vehicles within the IRS cost limits). In California and Illinois, an allowance counts as reimbursement only if it’s identified as such and actually covers the cost.
Can I deduct the cost of tools or uniforms from a tech’s paycheck?
Rarely. Under the FLSA, a deduction for items that benefit the employer can never take a non-exempt employee below minimum wage or into overtime for the week. On top of that, California, DC, Nevada, Washington, Colorado, Connecticut, Hawaii and Kansas require the employer to furnish required uniforms; New York requires uniform maintenance pay; Minnesota caps equipment deductions at $50 and requires refunds at separation; and most other states require a signed written authorization. In California, employees earning at least twice the minimum wage may supply their own customary hand tools, but the employer provides everything else.
Can I charge a tech for damage to the van or a lost tool?
In California, only if the damage resulted from the employee’s dishonesty, willful act or gross negligence. Kentucky, New Jersey and New York bar such deductions outright; Connecticut requires a Labor Commissioner-approved form; Minnesota, North Dakota and Wisconsin require a written authorization signed after the loss or a court finding. Everywhere else, a signed authorization and the minimum-wage floor apply. Holding the final paycheck for the item is a separate violation in every state except South Dakota.
Does the employer have to pay for safety gear?
Yes, for most of it, in every state. OSHA’s PPE payment rule (29 CFR 1910.132(h)) requires employers to pay for hard hats, gloves, respirators, fall protection, hearing protection and other required PPE. The exceptions are non-specialty safety-toe footwear and prescription safety eyewear the employee can wear off the job, everyday clothing, and replacements for equipment the employee lost or intentionally damaged. The mandate states add required uniforms and tools on top.
Is commuting mileage reimbursable?
No. The drive from home to the first job and from the last job home is the employee’s commute under federal and nearly every state’s rule, and it’s neither reimbursable nor taxable if the employee uses their own vehicle. Driving between jobs during the day, to the supply house, or from the shop to a site is business mileage. California treats the commute as working time (and the mileage as reimbursable) only when the employer requires a company vehicle and restricts its use.
What does the FLSA ’kickback’ rule mean for a trades shop?
Wages must be paid ’free and clear,’ so if an employee has to spend money primarily for the employer’s benefit (fuel and wear on a personal vehicle used between jobs, a required uniform, tools the employer demands) and that spending drops the employee’s effective pay for the week below the applicable minimum wage, or cuts into overtime owed, the employer owes the difference plus liquidated damages. The Sixth Circuit’s Parker v. Battle Creek Pizza decision (2024) requires employers to show actual vehicle costs were covered, not just that the IRS rate or an estimate was paid. It mostly bites for lower-paid helpers who drive a lot.
Did any state change its reimbursement law recently?
No new general mandates in 2025 or 2026. Illinois adopted detailed expense-reimbursement regulations in 2023 defining what’s ’primarily for the employer’s benefit.’ Minnesota tightened deduction rules in 2024. The IRS made a rare mid-year mileage increase to 76 cents on July 1, 2026. California’s AB 692 (now effective January 1, 2027) and New York’s Trapped at Work Act (December 2026) limit clawing back training costs from employees who leave. Watch Washington, Oregon and New York, where reimbursement bills have been introduced in recent sessions.
Bottom Line
Write an expense policy: mileage at the IRS rate with a log, a phone stipend or a company phone, employer-paid uniforms and PPE, a 30-day submission rule, and no deductions for damage or lost tools without the written authorization your state requires. That policy is mandatory in California, Illinois, Iowa, Massachusetts, Montana, New Hampshire, North Dakota, South Dakota and DC, and it’s the cheapest insurance against a minimum-wage kickback claim everywhere else. In Illinois the policy also sets the cap; without one, techs can claim actual costs.
Then put the techs in company vans with company phones if you can. Every reimbursement question in this guide disappears when the employer owns the equipment, and the GPS in the van is the mileage log anyway.
