Employees frequently incur costs for job-related expenses, including mileage, that benefit their employers. Failing to reimburse for those expenses provides an unfair windfall for employers that can push employee compensation below minimum wage.
In the course of a job, it is foreseeable that an employee may spend his or her own money on work related expenses. Though the federal Fair Labor Standards Act (FLSA) does not force employers to reimburse workers for mileage and other expenses, it does require that employees be paid wages that “free and clear of impermissible deductions – such as the costs of operating the vehicle or traveling on the road – that would reduce pay below the federal minimum.”
Unreimbursed job expenses are considered kickbacks that economically benefit the employer to the employee’s detriment. Kickbacks are not illegal per se, but when those costs dilute an employee’s earnings before minimum wage, that’s wage abuse.
Mileage is a frequent example, but another common wage theft scenario involves employees who wear uniforms in their jobs. If wearing the uniform is required by the employer, by law, or due to the nature of the employer’s business, the cost to acquire, launder, and maintain the uniform is considered the employer’s responsibility. Nurses, food servers, security guards, and other uniformed workers who fall within this category are vulnerable to employer wage theft.
Other examples of questionable unreimbursed expenses include:
- Equipment and tools used by the employee on the job
- Stamps and office supplies required for the job
- Repairs and maintenance of an employer-owned vehicle
- Highway tolls incurred while driving for work purposes
- Food and lodging expenses while traveling for work
- Tools required for the job such as nails or stamps
- Damage to the employer’s property caused by the employee or someone else, and associated repair costs
- Financial losses when the employer’s clients and customers fail to pay their bills
- Theft of the employer’s property committed by the employee or someone else
In cases where the employer sustains a loss (such as the last three examples above), some employers have tried to make it appear that they are complying with minimum wage laws by having employees reimburse those losses in cash rather than adhere to proper record keeping practices and deducting the costs from the employee’s wages. Either way, if the net result is compensation below the minimum wage, the employer is violating the law.