Cell Phone & Internet Reimbursement Laws by State

Your team can’t do their jobs without internet—but who’s responsible for the bill when they’re working from home?

In the office, it’s easy to tell which costs are yours and which belong to your employees. You’re not expected to buy your COO a new suit or cover someone’s lunch every day, but you’d never ask employees to pay for office electricity or bring their own desk.

Remote work changes that balance. Should you chip in for internet? What about cellphone reimbursement? Maybe even help with home office equipment? The answer depends on where your employees live—and in some states, reimbursement policies aren’t just a nice-to-have; they’re required by law.

Several states, along with the District of Columbia and the city of Seattle, already require businesses to cover certain necessary expenses, and more jurisdictions are joining them every year. If you employ remote workers in one of these states, you may be required to reimburse employees for expenses related to working remotely.

What are reimbursable expenses?

Reimbursable expenses are also known as “necessary expenses,” a category defined by the IRS as any cost that is helpful and appropriate (but not necessarily indispensable) for a trade or business. Federal law allows businesses to deduct these expenses (known, in this case, as “necessary business expenses”). In most states, employees can’t deduct these expenses themselves. Instead, they can seek reimbursement from the business, which can reimburse the employee and deduct the expense at the business level.

Tracking expense reports can play a role in optimizing an employee’s wages by accurately accounting for the necessary tools and resources essential for their professional responsibilities in relevant states.

Reimbursable expenses for remote workers can include the following:

• Certain utilities, including electricity, internet access, cell phone coverage, and mobile data storage
• Communications devices, including work computers and cell phones
• IT accessories, such as speakers, headsets, or cameras
• Office supplies, like printers, envelopes, paper, and ink
• Office equipment, including chairs, desks, and monitors

What federal law says about remote work expense reimbursement

Reimbursing employees for business expenses is a common practice, but it’s not necessarily mandatory. Under federal law, businesses are only required to reimburse employees for remote work expenses if unreimbursed work expenses would bring the employee’s total compensation below the federal minimum wage of $7.25 an hour.

This approach treats business-related expense reimbursement as part of an employee’s total compensation package: If an employee isn’t being reimbursed for necessary expenses, they are effectively earning less, which is only illegal if the resulting rate of pay violates the minimum wage requirements outlined in the Fair Labor Standards Act.

What state laws say about remote work expense reimbursement

As of mid-2025, eleven US states and two local jurisdictions either require or strongly advise employers to reimburse their employees for certain work-related expenses in certain situations:

• California
• District of Columbia
• Illinois
• Iowa (only if the employer authorizes the expense)
• Massachusetts (guidance from the Attorney General’s office, not a formal law)
• Minnesota (largely applies at termination of employment)
• Montana
• New Hampshire
• New York (only if agreed to in writing, such as in an employment contract)
• North Dakota
• Pennsylvania (only if contractually promised or outlined in an employer policy)
• South Dakota
• Seattle (city ordinance, not state law)

These laws aren’t specific to remote work—rather, they apply generally to work-related expenses incurred by an employee, including those that arise out of remote work environments. Whether or not these laws explicitly apply to remote work expenses depends on court interpretation.

As an example, the June 2022 California court opinion Williams v. Amazon.com Services LLC found that the plaintiff “plausibly require[d] the use of physical space, internet, and electricity” to perform his job, entitling him to reimbursement for these expenses under California law.

Based on this opinion, experts in California suggest that employers should expect to pay for at least a portion of basic costs for remote workers (including cell phone and internet coverage expenses), although many add that it is not yet clear how broadly the courts will interpret this responsibility. That creates a gray area around which expenses employers will need to cover and at what percentage of total cost to the employee.

Despite their ambiguity, employee expense reimbursement laws form the basis for individual and court interpretations of remote work expense reimbursement requirements. Here’s an overview of employee expense reimbursement laws by state.

California remote employee reimbursement

• Applicable law: California Labor Code Section 2802
• Reimbursable expenses: “All necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties”

California law requires employers to reimburse employees for necessary business expenses that are incurred during the course of employment, including internet access and phone bills for employees working remotely.

District of Columbia remote employee reimbursement

• Applicable law: D.C. Municipal Register Title 7 Section 910.5
• Reimbursable expenses: “The cost of purchasing and maintaining any tools required of the employee in the performance of the business of the employer”

DC employers are required to reimburse employees for all necessary tools related to their scope of employment. This can include internet and cell phone costs for employees who work from home.

Illinois remote employee reimbursement

• Applicable law: Illinois Wage Payment and Collection Act, Section 9.5: Reimbursement of employee expenses
• Reimbursable expenses: “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”

Illinois law requires employers to reimburse employees for all necessary expenses or losses, including phone and internet reimbursement when these tools are used for remote work purposes. Employers can specify what they’ll pay for each type of expense, and employees must submit requests for reimbursement within 30 days of incurring the expense.

Minnesota remote employee reimbursement

• Applicable law: Minnesota Statute 177.249
• Reimbursable expenses: “Purchased or rented equipment used in employment, except tools of a trade, a motor vehicle, or any other equipment which may be used outside the employment” and “consumable supplies required in the course of that employment”

Employers must provide a policy that offers reimbursement to employees for certain expenses upon their termination of employment. Reimbursable expenses for remote workers can include consumable supplies or purchased or rented equipment that can’t be used outside of employment.

Montana remote employee reimbursement

• Applicable law: Montana Code 39-2-701
• Reimbursable expenses: “All that [an employee] necessarily expends or loses in direct consequence of the discharge of [their] duties as such or of [their] obedience to the directions of the employer”

Montana employers are required to reimburse employees for all necessary expenses, which can include remote work expenses such as internet and cell phone bills.

New Hampshire remote employee reimbursement

• Applicable law: New Hampshire Revised Statutes 275:57
• Reimbursable expenses: “Expenses [incurred] in connection with […] employment and at the request of the employer, except those expenses normally borne by the employee as a precondition of employment”

New Hampshire employers are required by law to reimburse employees within 30 days for expenses connected with employment, which can include expenses related to working remotely.

North Dakota remote employee reimbursement

• Applicable law: North Dakota Century Code Section 34-02-01
• Reimbursable expenses: “All that the employee necessarily expends or loses in direct consequence of the discharge of the employee’s duties”

North Dakota employers are required by law to reimburse employees for expenses related to necessary duties or incurred at the employer’s direction. This can include cell phone or internet costs for remote workers.

South Dakota remote employee reimbursement

• Applicable law: South Dakota Statute Codified Law 60-2-114
• Reimbursable expenses: “All that the employee necessarily expends or loses in direct consequence of the discharge of the employee’s duties.”

South Dakota’s employers must reimburse employees for necessary expenses, which can include cell phone and internet expenses for employees working remotely.

Seattle remote employee reimbursement

• Applicable law: Seattle Wage Theft Law
• Reimbursable expenses: “All necessary expenditures or losses incurred by the employee in direct consequence of the discharge of the employee’s duties, or of the employee’s obedience to the directions of the employer”

Employers must reimburse employees for business expenses, which can include any necessary expenses arising from remote work.

States with conditional expense reimbursement laws, rules, or guidance

Unlike the states listed above, which have enforceable laws requiring some level of reimbursement, these other states take a much softer approach. Their rules are either conditional (only applying if the employer authorizes the expense or agrees to reimburse it) or advisory (official guidance, but no legal requirement).

Employers in these states should still take these recommendations seriously, especially if they want to stay competitive or avoid potential disputes, but the requirements are not nearly as strict as the laws we’ve already covered.

Iowa remote employee reimbursement

• Applicable law: Iowa Code 2022, Section 91A.37
• Reimbursable expenses: “Expenses by the employee which are authorized by the employer and incurred by the employee”

Iowa’s law only applies to expenses explicitly authorized by the employer, not all remote work expenses. Employers must provide a policy that reimburses employees for authorized necessary business expenses and provide payment within 30 days of receiving a claim. If an employer doesn’t pay the reimbursement request, they must provide a written notice explaining the decision within the same period.

Massachusetts remote employee reimbursement

• Applicable law: N/A
• Reimbursable expenses: According to guidance by the Massachusetts Attorney General’s office, employers should reimburse expenses that are “unavoidable and necessary” for employees to fulfill their job responsibilities.

Massachusetts does not have a statutory reimbursement law. Guidance from the Attorney General recommends, but does not require, employers to reimburse employees for necessary and unavoidable expenses.

New York remote employee reimbursement

• Applicable law: New York Labor Law 198-C
• Reimbursable expenses: Employers must pay any “benefits or wage supplements” that have been promised to an employee, including reimbursement for expenses.

New York only requires expense reimbursement if it is specifically promised in a policy or written agreement. To that point, under New York law, employers are guilty of a misdemeanor if they fail to abide by the terms of any benefit or wage supplement agreements, including expense reimbursement agreements.

Pennsylvania remote employee reimbursement

• Applicable law: Pennsylvania Wage Payment and Collection Law (WPCL), Section 260.3
• Reimbursable expenses: The law covers “fringe benefits or wage supplements” which can include reimbursement if the employer has agreed to provide it through contract, policy, or collective bargaining agreement.

Reimbursement is only required if the obligation is contractually promised or outlined in an employer policy. There is no general requirement to reimburse remote work expenses unless a prior agreement exists. This is considered a conditional requirement, not a broad statutory mandate.

Which states require a cell phone reimbursement policy?

Because employees might use their personal cell phone to make business calls during the work week, some states have found that businesses must reimburse for these expenses. A recent California court ruling explicitly found that the state’s expense reimbursement laws apply to remote work costs, including cell phone expenses. And that puts California employers on the hook.

However, these laws aren’t blanket requirements. Reimbursement is generally only required if the phone use is necessary for work and required by the employer. And in some states, reimbursement obligations are conditional or depend on whether an employer has a written agreement with the employee.

The following states and localities have laws that may require employers to reimburse employees for work-related cell phone expenses:

1. California
2. District of Columbia
3. Illinois
4. Montana
5. New Hampshire
6. North Dakota
7. South Dakota
8. Seattle

Other states have narrower or conditional rules or guidance:

• Iowa (only if the expense is authorized by the employer)
• Minnesota (largely applies at termination of employment)
• New York (only if agreed to in writing, such as in an employment contract)
• Massachusetts (guidance from the Attorney General’s office, not a formal law)

Which states require internet reimbursement?

Internet access is essential for most remote workers—but that doesn’t always mean employers must cover the cost. Like cell phone reimbursement, internet expense rules depend on whether the service is necessary for work and required by the employer.

California courts have explicitly ruled that employers must reimburse a “reasonable percentage” of an employee’s internet bill if it’s required for work, even if the employee would pay for internet personally. Other states have similar rules, but only in specific circumstances—leaving a lot of gray area around exactly how much of a home internet bill employers must cover.

The following states and localities have laws that may require employers to reimburse employees for work-related internet expenses:

• California
• District of Columbia
• Illinois
• Montana
• New Hampshire
• North Dakota
• South Dakota
• Seattle (city ordinance)

Other states have narrower or conditional rules or guidance:

• Iowa (only if the expense is authorized by the employer)
• Minnesota (largely applies at termination of employment)
• New York (only if agreed to in writing, such as in an employment contract)
• Massachusetts (guidance from the Attorney General’s office, not a formal law)
• Pennsylvania (limited case law; no formal statute)

Note that most states only require or allow expense reimbursement requests for a specific percentage of an internet bill. It’s usually unreasonable to make the case that 100 percent of a remote employee’s internet usage was work-related.

Some employers agree to an expense reimbursement plan for internet, cell phone, and other similar expenses in the form of a monthly stipend designated to pay a portion of each bill. However, it is ultimately the employees’ responsibility to make the payment as a part of their out-of-pocket expenses.

Other reimbursement rules: Bring your own device, cell phone stipend benefits, and more

BYOD and stipend program rules are far less common than the general reimbursement requirements we covered earlier. Most states don’t have specific laws about employees using their own devices for work or receiving a flat monthly payment for work-related costs. Instead, these situations are usually treated under the same “necessary business expense” rules we’ve already discussed.

Still, if your employees are required to use personal devices like phones, laptops, or tablets for work, you may need to reimburse at least a portion of the cost as employee benefits and rights. That can include:

• A portion of their cell phone plan (including data) if they regularly make business calls or use work apps.
• Accessories or upgrades (such as extra storage, webcams, or headsets) if those tools are necessary to do the job.

Some employers choose to simplify this by offering a monthly stipend for internet or phone use. While stipends aren’t required by law, they can help standardize costs, as long as the amount is reasonable and meets any state reimbursement rules. For example, California courts have ruled that employers must cover a “reasonable percentage” of an employee’s phone or internet bill, even if the employee would have those services anyway.

If you do use a BYOD or stipend approach, document it clearly. Outline which expenses qualify, how employees can request reimbursement, and whether you’ll pay per claim or through a stipend. Clear policies protect you, and help avoid compliance headaches in states with stricter rules.

Stay Compliant with Mosey

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