Employer Hot Topic: Kickback Reimbursement

The issue of reimbursable expenses is often a hot topic amongst employees and their employers. While it seems obvious, for example, that an employee who uses his personal car to perform a work ‘errand’ will be reimbursed for his mileage, it is not often so cut and dry. What about the technician who buys his own truck, the gardener who purchases his own tools, or the production worker who purchases his own uniform? Are these reimbursable expenses for the employee? One of the most common alleged wage and labor violations involves disgruntled employees claiming they were not properly reimbursed for business expenses.

The Fair Labor Standards Act (FLSA) establishes minimum wage and overtime pay for employees in the private sector and in Federal, State, and local governments. Additionally, the FLSA requires that employers pay an employee’s wages finally and unconditionally. If an employee is required to return some portion of wages—whether directly or indirectly (such as through purchasing his own supplies, gas, etc…)—and that “kickback” puts the employee’s hourly rate below the minimum wage, then the employer has violated the FLSA’s minimum wage requirement.