Are employers obligated to reimburse for travel expenses?
UPDATED: February 6, 2019
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As a general matter, no. Unfortunately, employers are not required to reimburse employees for expenses incurred in connection with their work, including travel expenses. They are allowed to, and are even arguably encouraged to do so—that’s why travel expenses, for example, are considered legitimate business expenses which a company can deduct when calculating its income for tax purposes; this makes it more attractive to employers to provide the reimbursement. However, it remains optional (with 3 exceptions; see below) and so employers may decline to provide reimbursement.
- Discrimination against protected categories (e.g. race, religion, sex, age over 40, disability) is not allowed. If an employer is reimbursing some staff but not others, and seeming to make the distinction on the basis of protected categories, there may be an employment discrimination claim.
- If a contract, such as an employment contract, calls for reimbursement, that contract must be honored. Note that a strong, clear, unequivocal statement in an employee handbook about reimbursement may be considered to form a contract—though most employee handbooks are rendered ineffectual by the inclusion of various caveats, exceptions, and the retention of an employer right to change the policies in it at will. Still, it’s worth looking at the employee handbook.
- If the employer promised to reimburse the employee for travel, and it was on the basis of that promise that the employee expended money on travel, that promise may also be enforceable under a theory known as “promissory estoppel”—people cannot always disclaim promises they made which others relied on and which the promisor knew the other would rely on.
However, apart from the above, unfortunately, reimbursement is at the employer’s option.
If you are not reimbursed, then your travel expenses may constitute expenses which you can deduct on your own taxes. This deduction, however, is no longer allowed, starting 2018 through 2025.
Also, note that depending on the nature of the travel, when it was done, and even by which mode (e.g. plane vs. car), it might be the case that the employee needs to be paid for the time spent traveling, even if it was outside of normal working hours. (Travel during work hours is definitely paid.) If an employee has had to travel extensively for work outside his or her normal shift, and that person is a nonexempt employee (e.g. someone who gets overtime), he or she may wish to consult with an employment law attorney.