Mileage Reimbursement Laws by State (2026)

Nine states have laws requiring private employers to reimburse business mileage. The other 41 leave it to employer discretion. Here is the state-by-state breakdown.

States that require reimbursement

California

Labor Code §2802. Employers must indemnify employees for "all necessary expenditures". Including mileage. Penalties: back pay, interest, attorney's fees, class action exposure. Full California guide.

Illinois

820 ILCS 115/9.5. Treats unreimbursed mileage as unpaid wages, with monthly interest on shortfall. Most employee-friendly enforcement of any state. Illinois guide.

Massachusetts

Treble damages for willful violations. Strong wage-act enforcement. Massachusetts guide.

New York

Limited mandate. Only when failing to reimburse would drop wages below minimum wage. New York guide.

Washington

Seattle has stronger local enforcement than the rest of the state. Washington guide.

New Hampshire

RSA 275:57. 30-day rule for reimbursing necessary expenses. New Hampshire guide.

North Dakota

NDCC §34-02-01 "necessarily expends" rule. North Dakota guide.

Montana

Wage-protection statute requires reimbursement of necessary work expenses. Montana guide.

Iowa

Wage Payment Collection Act covers business expense reimbursement. Iowa guide.

Other states with partial protection

Several states (Pennsylvania, Minnesota, others) require reimbursement only when failing to do so would drop wages below minimum wage. Similar to New York's pattern. The threshold is usually narrow but worth knowing.

States with no mandate

In the remaining states, reimbursement is voluntary. Most large employers offer it as policy. If yours does not, you can ask, but you have no legal recourse. The federal mileage deduction for W-2 workers was eliminated permanently in 2025, so reimbursement is the only path to cost recovery for non-mandate state W-2 drivers.

What every driver in a mandate state should do

• Keep a contemporaneous mileage log with all four IRS-required fields.
• Submit reimbursement requests on your employer's required schedule.
• If reimbursement is denied or underpaid, file a wage claim with your state Department of Labor before suing.

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