Remote Work Expense Reimbursement Laws by State 2026: Who Must Pay for Your Internet

The most common remote-work question after taxes is blunt: does my boss have to pay for my internet? The answer is almost entirely about which state you work in. A small group of states put the cost of doing business on the employer by statute, and the rest leave it to company policy unless reimbursement is the only thing keeping your effective pay above minimum wage. This guide maps the mandatory-reimbursement states, isolates why California and Illinois are the sharpest, and flags the timing rules that decide when the money is actually owed. For the tax-free way to deliver it, pair this with our accountable plan guide.

What is the default rule on reimbursement?

The default rule across most of the United States is that no general law forces an employer to reimburse remote-work expenses. There is no broad federal statute requiring private employers to cover home internet, electricity, or office gear, so absent a state law the obligation comes from the employment contract or company policy, not from the government.

The one federal backstop is indirect. The Fair Labor Standards Act (FLSA), administered by the DOL WHD, does not require expense reimbursement directly, but it does forbid work-related costs from pushing an employee's effective wage below the federal minimum. So even in a no-reimbursement state, an employer cannot make a near-minimum-wage worker buy so much equipment that their real pay drops under the floor. That edge case aside, the action is all at the state level.

Which states require expense reimbursement?

A mandatory-reimbursement state is one whose labor code requires employers to repay employees for necessary business expenses, and roughly a dozen states fall into this group. The matrix below lists the states most consistently cited as having a reimbursement requirement, ranked by how strong and broad that requirement is in practice. The list and its scope shift as states amend their wage laws, so treat it as a map to verify, not a final word.

One distinction runs through every one of these statutes: whether the remote work was required or merely permitted. Most reimbursement laws bite hardest when the employer mandates remote work, because then the home internet, electricity, and equipment are unambiguously necessary to perform the job the employer assigned. When remote work is optional, an employee's preference, the necessary-expense argument weakens, and some states treat voluntarily-incurred home costs as the employee's own. In practice this means a fully remote role at a company with no office is the strongest case for reimbursement, while a hybrid worker who chooses to work from home on a flexible day has the weakest. Employers writing policy in mandatory states should assume that required remote work triggers the obligation and budget accordingly.

What unites the genuine mandatory states is the word necessary. The statutes do not require reimbursing every cost a remote worker incurs, only those necessary to perform the job. The fights are usually about what counts as necessary, which is where California and Illinois pull ahead because their laws read "necessary" expansively. The tax treatment of these reimbursements is a separate question our colleagues at CeoCult address for business owners.

Why are California and Illinois the strictest?

CA and IL are the two states whose statutes most clearly compel reimbursement of remote-work costs, including internet and cell phone, without a narrowing qualifier. California Labor Code Section 2802 requires employers to indemnify employees for "all necessary expenditures or losses incurred" in performing their duties, and courts read "all necessary" broadly.

The defining California precedent is Cochran v. Schwan's Home Service, which held that an employer must reimburse a reasonable percentage of an employee's personal cell phone bill used for work even if the employee has an unlimited plan and incurs no extra charge. That precedent is why a flat "we don't reimburse" policy is legally risky in California for any remote role. Illinois followed with a 2019 amendment to its IWPCA requiring reimbursement of "all necessary expenditures" within the scope of employment, the closest sibling to California's standard[1].

Must an employer pay for home internet?

An employer must pay a reasonable share of home internet only where a reimbursement statute applies and the internet is necessary for the job, which most clearly means California and Illinois. In those states, home internet used to perform work is a reimbursable necessary expense, and the reimbursement covers a reasonable business-use percentage rather than the entire household bill.

Outside the mandatory states, home internet reimbursement is a policy choice, not a legal duty. Even within California, the employer reimburses the work-related portion, not your family's streaming, so a typical reimbursement is a percentage of the monthly bill. The cleanest way for any employer to handle it, mandatory state or not, is a substantiated accountable-plan reimbursement that satisfies both the legal obligation and the tax rules in one payment.

How fast must an employer reimburse you?

Where a statute applies, reimbursement must be made promptly, a standard most commonly read as roughly 30 days from the expense or from when the employee submits it. The exact deadline depends on the state, and some tie it to the next regular payroll cycle rather than a fixed day count.

The takeaway for employees is to submit expenses with documentation promptly, because the clock often starts when you submit, not when you incur. Keep dated receipts, note the business purpose, and file monthly. That habit also lines up exactly with what an accountable plan needs for the reimbursement to be tax-free, so doing it once serves both the legal and the tax requirement.

Can unpaid expenses violate minimum wage?

Yes, unreimbursed work expenses can violate minimum wage when they pull a worker's effective pay below the legal floor, which is the FLSA backstop that applies even in no-reimbursement states. The principle is that an employer cannot shift so much of the cost of doing business onto a low-wage worker that the worker's real hourly earnings drop under the federal or state minimum.

In practice this rarely binds salaried remote professionals, whose pay sits far above minimum wage. It matters most for hourly remote roles near the wage floor, where required equipment, software, or connectivity costs can erode pay. These claims run through state W&H rules rather than the reimbursement statutes. Even there, the remedy is usually a wage-and-hour claim rather than a direct reimbursement order, so the mandatory-state statutes remain the stronger tool for most remote workers. Employers who want to avoid the whole question simply reimburse necessary costs as policy, which is increasingly standard regardless of state.

Bottom line

Whether your employer must pay for your internet comes down to your state. Roughly a dozen states require reimbursing necessary business expenses, but California and Illinois are the two that most clearly force internet and cell reimbursement, with promptness rules around 30 days. Most states leave it to policy, with the FLSA minimum-wage rule as the only federal floor. If you are in a mandatory state, submit documented expenses promptly and watch for flat stipends that undershoot your real costs. The cleanest delivery for any employer is a substantiated accountable plan that meets the legal duty and stays tax-free at once.

1. California Legislative Information. Labor Code Section 2802, indemnification for necessary expenditures. leginfo.legislature.ca.gov verified 2026-05-29 return
2. US Department of Labor, Wage and Hour Division. Fair Labor Standards Act overview. dol.gov verified 2026-05-29 return
3. Illinois Wage Payment and Collection Act, Section 9.5, reimbursement of employee expenditures. illinois.gov verified 2026-05-29 return

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