Tools of the Trade: Hotel Expense Reimbursement Policies
By Christine Samsel Attorney, Brownstein Hyatt Farber Schreck | June 14, 2020
This article was co-authored by Jesse Sutz, Associate, Brownstein Hyatt Farber Schreck
Multi-jurisdictional hospitality companies (i.e., those operating in multiple states across the country) are subject to varying requirements as to whether and to what extent employees must be reimbursed for certain out-of-pocket expenses incurred in performing their job duties. The short answer is that the business expenses for which employers must reimburse employees, if any, depend on the jurisdiction in which the employee works.
Many states have no specific requirements regarding expense reimbursements, and require compliance only with federal law. However, as outlined below, several states have more stringent requirements.
Federal Law and the Minimum Wage
Federal law sets the minimum requirements for expense reimbursement, mandating that business expenses incurred by the employee cannot cause the employee's effective wage to drop below the federal minimum wage (currently $7.25) or overtime wage, if applicable, in any given workweek. The pertinent federal regulation provides:
[I]f it is a requirement of the employer that the employee must provide tools of the trade which will be used in or are specifically required for the performance of the employer's particular work, there would be a violation of the Act in any workweek when the cost of such tools purchased by the employee cuts into the minimum or overtime wages required to be paid him under the Act.
29 C.F.R. § 531.35.