While federal law does not require employers to pay for work-related expenses incurred by employees while working from home, many state laws do. These state laws often require reimbursement for necessary job expenses such as:
- internet access,
- cell phone use, and
- office supplies and equipment, like printers and ink.
Covering work-from-home expenses has become a major concern since the coronavirus pandemic has pushed many employees into remote work.
Is my employer required to cover my expenses if I work from home?
The federal Fair Labor Standards Act (FLSA) generally does not require that an employee be reimbursed for expenses incurred while working from home. However, some states, like California and Illinois, do require these reimbursements.
The only time that the FLSA impacts work-from-home reimbursements is if the cost would lower the employee’s earnings beneath the applicable minimum wage. Because this only protects workers whose income is fairly close to the minimum wage, the FLSA is rarely implicated in reimbursements for work-related expenses.
Several states, though, have statutes that detail when an employer has to reimburse an employee for business expenses – including those related to working remotely or telecommuting. These states are:
- District of Columbia,
- New Hampshire,
- New York, and
- Pennsylvania 
The requirements in these states are not all the same, though. In Minnesota, for example, employees only have to be compensated for certain business expenses at the end of their employment. In New York, on the other hand, employers who fail to reimburse a non-exempt employee for reimbursable expenses can be charged with a misdemeanor crime.
Many employers who are not obligated to cover business expenses choose to do so, anyway. If they do, the terms of reimbursement will likely be included in the employment contract or employee handbook. Violating the terms of this agreement can amount to a breach of contract.
What remote work expenses are covered?
Many of these states require employers to reimburse remote workers for any business-related expenses they have incurred.
The extent of these expenses will depend on the employee’s job duties. However, they frequently include the following expenses:
- phone use for business activities,
- home internet use,
- online subscriptions, like a paid plan for Zoom,
- a printer and printing supplies, like ink cartridges and paper,
- office supplies, possibly including an ergonomic desk and chair, and
- a work computer.
The employer’s reimbursement policies for work-related expenses can also determine which expenses are covered.
When an employer pays for home office equipment, though, it is often still the company’s property. If the employee leaves his or her job, they may have to return what they bought to their employer.
What is the law in California?
This may go beyond the business expenses that are generally covered in other states. It can also include, for example:
- home utilities, like heat and air conditioning,
- the cost of a business cell phone so they do not have to use their personal cell phone,
- travel expenses, and
- attorneys’ fees incurred by the employee in recovering reimbursement for other expenses.
Businesses can reimburse their remote employees after the employee has paid the work-related expense, or can create a stipend for the anticipated costs of remote working.
Because the employer only has to cover these expenses when they are work-related, it can lead to disputes over what percentage of these costs are for business use and what portion is for personal use.
If the employer fails to pay these reimbursements, the employee can file a wage and hour lawsuit. Workers are protected from retaliation if they file a claim.
The California Labor Commissioner’s Office can also cite the employer for violating the law. Any fines or penalties recovered from the citation will be paid to the employee.
Are these reimbursements tax deductible?
The Internal Revenue Service (IRS) lets employees claim a tax deduction of their business expense reimbursements if the expense:
- was an ordinary and necessary one for their job,
- is substantiated or proved by the employee, usually with receipts, within a reasonable amount of time, and
- the employee returned any excess reimbursement to their employer within a reasonable period of time.
If any of these conditions are not met, then the reimbursement is considered income and has to be reported as taxable.
What about home office expenses?
Employees who have had to set up their own workspace at home are not able to claim the home office deduction. Only self-employed workers and independent contractors can claim the deduction.
This is a recent change in tax law. The Tax Cut and Jobs Act eliminated this deduction for W-2 employees from 2018 through 2025.
 California Labor Code 2802 LAB (“An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties”).
 California Labor Code 2802(d) LAB.