In Which States is Mileage Reimbursement Mandatory?

States that mandate mileage reimbursement

While there is no federal law that requires employers to provide mileage reimbursement, 3 states have enacted laws that requires employers to reimburse their employees. The 3 states are:

California
Massachusetts
Illinois

In this article, we will take a closer look at these state laws and how they work.

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What states require mileage reimbursement to be paid out?

Below we will dive into the laws in California, Massachusetts, and Illinois. Each of which has unique laws that require employees to be reimbursed for expenses incurred when traveling in a personal vehicle for work-related purposes.

California

California provides a strict mileage reimbursement law requiring employers to "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." This includes travel-related expenses such as the costs of gas, maintenance, and other costs incurred as part of driving a personal vehicle.

The law specifies no exact rate at which employers must pay employees. However, they will need to reimburse employees for the business portion of a vehicle's use. Most employers choose to provide the Internal Revenue Service's (IRS) standard mileage rate. For 2024, the IRS mileage rate is set at 67 cents per business mile. The 2023 rate is 65.5 cents per business-related mile.

Massachusetts

The Massachusetts mileage reimbursement law provides a clear requirement that employers must reimburse employees for mileage and transportation expenses under Massachusetts regulation 454 CMR 27.04(4)(b). Specifically, this law states that: "An employee required or directed to travel from one place to another after the beginning of or before the close of the work day shall be compensated for all travel time and shall be reimbursed for all transportation expenses.

This requirement applies to all workers that are employed in an "occupation." The definition of this includes industries, trades, and businesses but does not include "professional service, agricultural and farm work, work by persons being rehabilitated or trained under rehabilitation or training programs in charitable, educational or religious institutions, work by seasonal camp counselors and counselor trainees or work by members of religious orders."

The amount of reimbursement required by Massachusetts law is intended to cover the costs associated with travel, such as gasoline, maintenance, insurance, and other expenses. State courts have generally recognized the standard IRS reimbursement rate of 67 cents per mile (standard IRS rate for 2024) as an acceptable amount.

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Illinois

Illinois mileage reimbursement law requires that "An employer shall reimburse an employee 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." This includes vehicle expenses, such as mileage that an employee incurs when using their personal vehicle for work.

However, an employer is not required to cover expenses that are a result of employee negligence or wear and tear. Employers also do not need to cover theft unless it is due to their own negligence. Additionally, employees who do not comply with the employer's written expense reimbursement policy are not entitled to reimbursement.

Employees must be given thirty days to provide documentation showing their expenses. Otherwise, they need to provide a signed statement indicating why they cannot provide proof of their expenses.

The expenses the employer must cover are not specified. But, the law is very similar to the California law, which covers the expenses of personal vehicles used for work purposes and typically uses the IRS reimbursement rate, set at 67 cents per mile for 2024. Although, employers must pay a higher amount if needed to reimburse the costs incurred.

FAQ

What types of mileage expenses are covered under state law?

There are only three states that require employers to reimburse their employees for mileage expenses. These states are California, Massachusetts, and Illinois. These states require reimbursement for employees for the cost of using their personal vehicles for work purposes, including mileage.

How often should mileage reimbursement be paid?

The laws in these three states do not have a requirement as to how often mileage reimbursement must be paid. But, it is advisable to pay it each employee pay period or at least monthly.

What documentation is required to receive mileage reimbursement?

It is important to keep a record of your vehicle expenses incurred for work purposes. Since the IRS mileage rate is the most common form of reimbursement, it is crucial to keep track of your mileage. The easiest to do this is to use a mileage tracking app, such as Driversnote.