Q: Must we reimburse an employee for the expense of an Uber ride if we normally reimburse her for taking the bus?
Generally, no, but it depends. Federal law doesn’t require the reimbursement of travel expenses for business purposes in most situations. However, the Fair Labor Standards Act (FLSA) requires that nonexempt employees are paid at least the minimum wage “free and clear” of “kick-backs” that directly or indirectly benefit the employer—meaning, if the cost of an Uber ride between jobsites incurred by an employee would drop their wages for the workweek below the minimum wage, or if it cuts into an employee’s overtime wages, then that cost likely must be reimbursed.
Unlike federal law, some states have their own laws requiring reimbursement of expenses incurred by employees. For instance, Illinois requires employers to reimburse employees for “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.” The statute specifies that the expense must be incurred in the “discharge of employment duties and that inure to the primary benefit of the employer.” If an employee were required to travel between jobsites during the workday for work purposes, this could qualify as a required reimbursement. Separately, everyday travel to and from the jobsite isn’t a required reimbursable expense.
Lastly, you should be aware of your own employment policies and practices. If you have a policy requiring the reimbursement of work-related travel expenses, you will likely have to reimburse those expenses regardless of whether the mode of transportation was a bus or Uber.
Bottom line: Federal law doesn’t specifically require reimbursement of all employee travel expenses but does so if work-related travel expenses affect an employee’s compensation such that other legal requirements are not met. State laws vary on the issue, with some requiring the reimbursement of all required work-related expenditures. Staying on top of ever-changing state laws is crucial. Lastly, you should be aware of your own obligation to reimburse expenditures set by your employment policies.
Tanner A. Cava is an attorney with Steptoe & Johnson PLLC in Bridgeport, West Virginia and can be reached at 304-933-8205 or tanner.cava@steptoe-johnson.com.