North Dakota Mileage Reimbursement: NDCC §34-02-01 and the "Necessarily Expends" Rule

North Dakota requires employers to reimburse employees for "all that the employee necessarily expends or loses" in the course of work, except for the ordinary risks of the business. The statute is broad enough to cover business mileage when an employer requires personal-vehicle use. Enforcement is uncommon, but the right exists.

Source: North Dakota Century Code §34-02-01 (Employer must indemnify employee for losses and expenses).

The Statute: NDCC §34-02-01

The full operative text is short. North Dakota law says an employer "must in all cases indemnify the employee" for what the employee "necessarily expends or loses" while doing the employer's work, with one carve-out: "the ordinary risks of the business." That language tracks closely to California's much-better-known §2802.

Three things to know:

• Necessarily expends. The expense must be required by the work. Buying gas to make a delivery the employer ordered is necessary. Buying gas because you preferred to drive to a meeting that was offered virtually is not.
• In the discharge of duties. The driving has to be in service of the employer's business, not your commute or personal errands.
• Ordinary risks of business carve-out. Wear and tear from normal driving is generally treated as included in any reasonable per-mile rate. The carve-out is narrower than employers typically argue.

How It Applies to Mileage

The statute does not name mileage. But North Dakota courts and the Department of Labor have applied the "necessarily expends" language to vehicle expenses in cases where employers required employees to use personal cars for company business. In the Bakken oil region, where contractors often drive long distances between work sites in personal trucks, the question comes up regularly.

In practice, many employers in the oil patch and agricultural sectors negotiate per-mile reimbursement directly with workers, avoiding the statutory question entirely. For W-2 workers without a clear policy, §34-02-01 is the legal hook.

Enforcement and Penalties

ND does not have NH-style per-violation civil penalties. Enforcement options:

The statute does not specify treble damages or per-diem penalties. Recovery is generally limited to actual unreimbursed amounts plus interest.

Where the Rule Bites Hardest

• Bakken oil field workers driving personal trucks to remote drill pads, often 50 to 100 miles round trip per day
• Agricultural contractors moving between farms, ranches, and elevators across the Red River Valley and beyond
• Home health aides covering vast rural service areas where windshield time can equal half the work day
• Sales reps covering the eastern half of the state from Fargo or Bismarck

How to Track Your Miles

Keep a contemporaneous log. The mileage log requirement for the IRS deduction is the same record you'd present to enforce a §34-02-01 reimbursement claim: date, starting and ending location, business purpose, miles driven. See our mileage log requirements guide.

1099 vs W-2

NDCC §34-02-01 protects W-2 employees. Independent contractors are not covered. If you are 1099, deduct on Schedule C. See the North Dakota self-employed mileage guide.

FAQ

Does North Dakota require employers to reimburse mileage?

Yes, under NDCC §34-02-01, when the driving is necessary to the work and not within "the ordinary risks of the business." The statute does not name mileage explicitly but is broad enough to cover it.

What's the penalty if my employer refuses?

ND does not have per-violation civil penalties. Recovery is generally limited to the actual unreimbursed amount plus interest, with attorney's fees recoverable in some cases.

How long do I have to file a claim?

ND wage claims are subject to a six-year statute of limitations under NDCC §28-01-16 (contract-based actions). Individual reimbursement disputes may have shorter limitations under specific employment agreements.

Is mileage explicitly named in the statute?

No. The statute uses broad language ("necessarily expends or loses"). Mileage is reached through that language.

Can independent contractors use this statute?

No. NDCC §34-02-01 applies to W-2 employees. If you are 1099, deduct on Schedule C.

What if my employer says driving is an "ordinary risk of the business"?

That carve-out is narrower than employers typically argue. Wear and tear from normal driving may be included in a reasonable per-mile rate, but a flat denial of any reimbursement for required business driving generally does not stand up under §34-02-01.

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