DOL Issues New Guidance on Remote Work Expense Reimbursements
DOL clarifies employer obligations for reimbursing remote work expenses.
DOL Clarifies Remote Work Expense Reimbursement Obligations
The Department of Labor (DOL) issued new guidance on May 15, 2026, clarifying employer obligations regarding reimbursement for remote work expenses under the Fair Labor Standards Act (FLSA). This guidance addresses a growing concern as remote work continues to be prevalent.
Key Takeaways
Employers must ensure that remote work expenses do not reduce an employee's wages below the federal minimum wage of $7.25 per hour (29 U.S.C. § 206(a)(1)). The DOL's guidance specifies that costs directly tied to performing job duties, such as internet and phone service, may require reimbursement if they impact an employee's effective pay rate.
Who Is Affected?
The guidance applies to all non-exempt employees covered under the FLSA. Exempt employees, while not directly affected by minimum wage concerns, may still be subject to company policies or state laws requiring reimbursement.
Action Items for Employers
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Audit Remote Work Policies: Employers should review their remote work policies to ensure compliance with the new guidance. This includes clearly defining which expenses are reimbursable.
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Expense Tracking Systems: Implement or update systems to track remote work expenses accurately. Ensure employees understand how to submit reimbursement requests.
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Training for Managers: Provide training to managers and HR personnel on the updated requirements to prevent unintentional violations.
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Review State Laws: Some states have stricter reimbursement laws. Employers should review state-specific requirements to ensure full compliance.
Implications
Failure to comply with these reimbursement obligations could result in wage claims or investigations by the DOL. Employers should also be mindful of potential state law implications, which might impose additional requirements beyond the FLSA.
This guidance underscores the importance of maintaining clear communication with employees regarding remote work expectations and reimbursement policies. As remote work continues to evolve, staying ahead of regulatory changes will be crucial for employers to avoid legal pitfalls.