In Which States Is Mileage Reimbursement Mandatory?

California mileage reimbursement rules

California has a strict mileage reimbursement law requiring employers to "indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties."

This includes travel-related expenses such as gas, maintenance, and other costs incurred as part of driving a personal vehicle. Employers only need to reimburse employees for the business portion of a vehicle's use.

There is no specific California mileage rate at which employers must pay employees. Most employers choose to provide the Internal Revenue Service's (IRS) standard mileage rate, which is 70 cents per business mile for 2025 and 67 cents per business-related mile for 2024.

Explore California mileage reimbursement in detail now.

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Massachusetts mileage reimbursement law

The Massachusetts mileage reimbursement law clearly requires employers to reimburse employees for mileage and transportation expenses under Massachusetts regulation 454 CMR 27.04(4)(b).

Specifically, this law states: "An employee required or directed to travel from one place to another after the beginning of or before the close of the work day shall be compensated for all travel time and shall be reimbursed for all transportation expenses.”

This requirement applies to all workers who are employed in an "occupation."

The definition of this includes industries, trades, and businesses but not "professional service, agricultural and farm work, work by persons being rehabilitated or trained under rehabilitation or training programs in charitable, educational or religious institutions, work by seasonal camp counselors and counselor trainees or work by members of religious orders."

Massachusetts reimbursement law requires reimbursement for travel-related costs such as:

Gasoline
Maintenance
Insurance
and other expenses.

State courts have generally recognized the standard IRS reimbursement rate of 70 cents per mile (the standard IRS rate for 2025) as acceptable. There is no specific Massachusetts mileage rate.

Also read: How to calculate your reimbursement

Illinois mileage reimbursement law

Illinois mileage reimbursement law requires that "An employer shall reimburse an employee for all necessary expenditures or losses incurred by the employee within the employee's scope of employment and directly related to services performed for the employer."

This includes vehicle expenses, such as mileage that an employee incurs when using their personal vehicle for work. However, an employer is not required to cover expenses resulting from employee negligence or wear and tear. Employers also do not need to cover theft unless it is due to their negligence. Additionally, employees who do not comply with the employer's written expense reimbursement policy are not entitled to reimbursement. Employees must be given thirty days to provide documentation showing their expenses. Otherwise, they need to provide a signed statement indicating why they cannot provide proof of their costs.

Illinois mileage rate

It's not specified which expenses an employer needs to cover in Illinois as part of mileage reimbursement. However, the law is very similar to California law, which covers the costs of personal vehicles used for work purposes and typically uses the IRS reimbursement rate, set at 70 cents per mile for 2025.

Also read: Mileage reimbursement for employers

FAQ

What types of mileage expenses are covered under state law?

There are only three states that require employers to reimburse their employees for mileage expenses. These states are California, Massachusetts, and Illinois. These states require reimbursement for employees for the cost of using their personal vehicles for work purposes, including mileage.

How often should mileage reimbursement be paid?

The laws in these three states do not have a requirement as to how often mileage reimbursement must be paid. But, it is advisable to pay it each employee pay period or at least monthly.

What documentation is required to receive mileage reimbursement?

It is important to keep a record of your vehicle expenses incurred for work purposes. Since the IRS mileage rate is the most common form of reimbursement, it is crucial to keep track of your mileage. The easiest to do this is to use a mileage tracking app, such as Driversnote.