Employee Expense Reimbursement Laws in Wisconsin

Federal law does not mandate employer reimbursement of employee work expenses. The Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., does not create an affirmative duty for employers to reimburse business expenses. However, the FLSA does prohibit wage deductions that reduce pay below the federal minimum wage ($7.25/hour). The Internal Revenue Code allows employers to reimburse expenses tax-free under an accountable plan structure, which incentivizes reimbursement, but does not require it.

Federal law enforced by the Department of Labor focuses on whether deductions violate minimum wage requirements, not whether reimbursement itself is mandatory. Some federal contractors must comply with prevailing wage laws that include expense reimbursement, but this applies only to federal construction and service contracts. The EEOC enforces equal pay laws but does not directly regulate expense reimbursement unless the reimbursement policy discriminates on a protected basis (e.g., different reimbursement rates by race or gender).

Employees in states without specific reimbursement laws must rely on: (1) state common law regarding reasonable employer practices, (2) industry custom and practice, or (3) contractual agreements with employers.

Wisconsin is one of the few states with explicit statutory protection for expense reimbursement. Wisconsin Statute § 109.07(1)(c) prohibits employers from making wage deductions for 'necessary expenditures' incurred in the employee's work without the employee's prior written authorization, and even then the deduction cannot reduce wages below the state minimum wage.

Wisconsin's statute is significantly stronger than federal law because it creates an affirmative obligation to reimburse necessary work expenses. 'Necessary expenditures' under Wisconsin law include costs for tools, uniforms, safety equipment, and supplies required to perform the job. The state Department of Safety and Professional Services (DSPS) interprets this broadly to protect workers from bearing the cost of employer-required tools and equipment.

Wisconsin Statute § 109.03(1) sets the state minimum wage (currently $7.25/hour, matching federal minimum). Critically, reimbursement timing matters: employers must pay reimbursement within a reasonable time after the employee incurs the expense. Failure to reimburse promptly can violate wage payment laws. Unlike some states, Wisconsin does not require reimbursement within a specific number of days, but 'reasonable time' is interpreted conservatively by regulators—typically within 30 days is presumed reasonable, while delays exceeding 60 days may be violations.

The statute applies to all private employers with one or more employees in Wisconsin. Public employers and the state of Wisconsin are covered by similar provisions under Chapter 111, Wisconsin Statutes. Significantly, employers cannot sidestep the reimbursement requirement through at-will employment doctrines or employment contracts that attempt to make employees responsible for work expenses. Wage laws override contractual provisions that violate them.

Wisconsin law provides several important exceptions and limitations to the reimbursement requirement:

First, expenses must be 'necessary' to the job. Personal expenses, commuting costs to the workplace (though work-related travel once on the job is reimbursable), and optional professional development are generally not considered necessary unless the employer explicitly required them. For example, if an employee chooses to purchase premium tools when standard tools were provided, the employer may not be obligated to reimburse the premium cost difference.

Second, the statute permits wage deductions for necessary expenses if the employee provides 'prior written authorization.' However, this authorization cannot effectively reduce wages below minimum wage, creating a hard floor. If an employee authorizes a deduction that would push hourly earnings below $7.25, the deduction is void under § 109.07(1)(c).

Third, employers are not required to reimburse expenses incurred in violation of company policy if the employee was notified of the policy in advance and chose to incur the expense anyway. For example, if the employer has a policy requiring pre-approval for equipment purchases over $100, and the employee purchases a $150 tool without approval, the employer may deny or reduce reimbursement. However, the denial cannot be pretextual—it must reflect a genuine, communicated policy.

Fourth, uniform cleaning and maintenance costs are often subject to dispute. Wisconsin follows the federal 'special apparel' test: if a uniform is required but has no use outside work, the cost is reimbursable. If the uniform could reasonably be worn as street clothes, the employee may bear some cost.

Fifth, professional licenses and certifications required to perform the job are reimbursable, but voluntary advanced certifications may not be.

Sixth, the reimbursement requirement does not apply to truly voluntary expenses. If an employee attends a conference on their own initiative (not required by the employer), reimbursement is not mandatory.

**Step 1: Document the Expense and Your Request for Reimbursement.** Keep receipts, invoices, and credit card statements for all work-related expenses. Take a photograph of the receipt showing the date, vendor, amount, and itemization. Write down the date you incurred the expense, what it was for (e.g., 'safety boots required by employer for warehouse work'), and whether the employer explicitly required or approved the purchase. Send a written request (email is acceptable) to your manager or HR department, clearly stating the date of the expense, amount, description, and the business purpose. This creates a written record that the employer received notice of the expense.

**Step 2: Attempt Internal Resolution.** Wait 30 days for reimbursement. If no reimbursement is received, follow up with a second written request to your manager and HR, referencing the original request and noting that 30 days have passed. Ask for a written explanation of why reimbursement was denied. Request a specific date when reimbursement will be processed. Many reimbursement denials are administrative errors, and a follow-up email often resolves the issue. Keep all email correspondence. If the employer verbally denies reimbursement, ask them to provide the reason in writing.

**Step 3: File a Complaint with the Wisconsin Department of Safety and Professional Services (DSPS).** If reimbursement is not provided within 60 days of the expense, or if the employer has explicitly denied reimbursement for an expense you believe is necessary and work-related, file a wage complaint with DSPS. You can file online at dsps.wi.gov/for-workers/file-a-wage-complaint, by mail to the Division of Industry Services, Department of Safety and Professional Services, P.O. Box 8949, Madison, WI 53708, or by phone at (608) 266-2112. Provide: (1) your name, address, and phone number; (2) your employer's name and address; (3) dates of employment; (4) a description of the expense(s) not reimbursed, with amounts and dates; (5) documentation that you requested reimbursement; (6) your employer's response, if any. There is no filing fee, and you do not need an attorney to file.

**Step 4: Expect the DSPS Investigation Process.** Once DSPS receives your complaint, an investigator is assigned. The investigator will contact your employer and request pay records, expense documentation, and the employer's version of events. This investigation typically takes 30-60 days. You will likely be asked to provide additional documentation or testimony. The investigator may interview you by phone. DSPS will issue a written determination stating whether a wage violation occurred. If a violation is found, DSPS will order the employer to reimburse the unpaid expenses plus interest (at the rate of 12% per annum under Wisconsin law). If the employer refuses to comply with a DSPS order, DSPS can pursue civil penalties or refer the case for prosecution.

**Step 5: Consult an Attorney if the Amount is Significant or if Retaliation Occurs.** If the unreimbursed expenses exceed $500, or if the employer retaliates against you for filing a wage complaint (retaliation is illegal under Wisconsin Statute § 109.12), contact an employment law attorney. Retaliation can include termination, demotion, reduced hours, or hostile treatment. Many employment attorneys handle wage claims on a contingency basis (no upfront fee) or offer free consultations. You can file a retaliation complaint with DSPS separately if the employer takes adverse action after you report a wage violation.