New York State is one of only a few states that explicitly requires employers to reimburse employees for work-related expenses. Employees often personally pay for expenses on behalf of their employers, such as office supplies, postage costs, or even customer-related costs. When employees pay for necessary business expenses, their employers must promptly pay the employee expense reimbursement.
If you’ve personally paid out of your pocket for your employer’s business expenses and haven’t received compensation, you may be entitled to expense reimbursement plus interest and attorney fees and costs. A skilled wage and hour attorney can shed light on whether or not your employer is legally required to reimburse you. With over 40 years of employment law experience, Lipsky Lowe LLP has a proven track record of advocating for clients in all areas of employment law, including employee expense reimbursements.
Common Employee Expense Reimbursements
Employees often use their personal resources to pay for expenses necessary to carry out their employment. In many cases, employers have a legal duty to reimburse their employees for necessary business-related expenditures, such as:
- Mileage, gas or insurance expenses
- Training costs
- Meals during business trips
- Replacement of broken equipment or dishes
- Meals when meeting with clients
- Postage costs
- Telephone charges
- Office supplies
- Subscriptions
- Seminar costs
- Office equipment
- Support staff wages
- The cost of uniforms
- The cost of laundering uniforms
- Expenses related to business transaction errors
- Costs associated with settling disputes with customers
At Lipsky Lowe LLP, we can advise you as to the expenses you’ve personally incurred that your employer must reimburse. Our attorneys are familiar with the applicable federal, state, and local laws surrounding employee reimbursements and will help you explore your legal options for pursuing reimbursement from your employer.
Employee Expense Reimbursements Under Federal Law
The Fair Labor Standards Act (FLSA) does not explicitly address the need for employers to reimburse employees for work-related expenses. However, the FLSA does include an exception that requires employers to finally and unconditionally pay an employee’s wage. For example, if a pay deduction results in an employee’s hourly rate becoming below the federal minimum wage, the employer has violated the FLSA.
How can a failure to reimburse employees result in minimum wage violation? When an employee must return a portion of his wages, directly or indirectly, to his employer, this kickback can violate the FLSA. An unlawful kickback happens when the following three conditions occur:
- An employer deducts expenses from the employee’s wage and the expense was for the benefit of the employer
- The employer fails to reimburse his or her employee for those expenses
- The wage deduction results in an employee receiving an hourly pay rate that is less than the federal minimum wage.
This FLSA kickback rule often comes into play in industries that hire delivery drivers. Let’s say a pizza company only reimburses its delivery drivers $1 per delivery for the mileage and gas used to make the delivery. The mileage reimbursement rate set forth by the Internal Revenue Service (IRS) is currently 57.5 cents per mile as of 2019. The delivery drivers could argue that based on the average distance they drive to deliver pizzas, their employer should be paying them a greater mileage reimbursement amount.
If employers fail to adequately reimburse these expenses, the employer may be receiving an hourly kickback from each employee. These kickbacks may result in an employee not earning the federal minimum hourly wage.
Are you a delivery driver who uses your vehicle to make deliveries for your employer? Does your employer fail to compensate you for other regular expenses? The federal minimum wage is currently $7.25 an hour. If an employee who makes $8.00 an hour incurs $6 per day in unreimbursed employer expenses, the FLSA’s kickback provision will lower his or her hourly wage to below minimum wage.
The FLSA does not explicitly require an employer to reimburse its employees for business expenses or deductions. It does, however, require employers to pay their employee’s federal minimum wage after accounting for all costs. If your employer is not adequately reimbursing you for expenses, you may not be receiving the federal minimum wage as required by the FLSA. Employers cannot waive the right to receive a national minimum wage, either directly or indirectly.
New York State Employee Expense Reimbursement Law
New York is one of only a handful of states that has an explicit statute directed at employer reimbursement. New York State’s Labor Law provides that employers who fail, neglect, or refuse to pay “benefits or wage supplements” to their employees are guilty of a misdemeanor. Employers must reimburse their employees within 30 days of the reimbursement becoming due. The date reimbursement is due is typically the date that the employee submitted the expense for reimbursement.
If the employer is a corporation, the New York statute holds its President, Secretary, and Treasurers each guilty of a misdemeanor for failing to pay their employees “benefits or wage supplements.” It is important to note that the provisions in this section do not apply to bona fide professional, administrative, or executive employees who earn over $900 US per week.
Examples of “benefits or wage supplements” listed in the statute include, but are not limited to, the following:
- Reimbursement for business-related expenses
- Health benefits
- Welfare benefits
- Retirement benefits
- Vacation, separation, or holiday pay
Contact Our New York City Employee Expense Reimbursement Attorney
Is your employer refusing to compensate you for business-related expenses that you paid out of your pocket? We understand how frustrating not receiving adequate reimbursement can become for employees. Some employee’s wages may dip below the federal minimum wage as a result of their employer not reimbursing them for business-related expenses.
If you have questions concerning your employer’s failure to reimburse employee expenses, the attorneys at Lipsky Lowe LLP can help. We’ve been helping our New York City clients fight for their right to adequate compensation for over thirty years. Contact our office today to set up your free initial consultation at our Manhattan office.