Today’s workforce is not stationary; in very few instances are all of your employees working in the same place at the same time. Employees are mobile—people often work from home or travel from client to client throughout the week without ever setting foot in corporate headquarters. These mobile workers have found a way to work efficiently and with low overhead, but many do require things such as mobile devices, vehicles, software subscriptions or other items to successfully do their jobs—all of which should be provided at their company’s expense.

Companies approach these expenses differently. Some give employees a stipend, some issue a corporate card with a credit limit, and some ask employees to cover costs upfront and submit for reimbursement. There is no one method that’s perfect for everyone, but as long as both the employee and the company are treated fairly and accurately, everyone’s happy.

Naturally, no company wants to knowingly short-change a hard-working and effective employee. That being said, the accurate tracking of expenses mobile employees incur and providing the correct reimbursement for them has grown in importance over the past year. Many states have passed (or are considering passing) stringent labor regulations around proper reimbursement, and companies that are not 100 percent compliant with these new rules could open themselves up to regulatory penalties and expensive employee lawsuits.

Labor regulations and potential lawsuits. You may already be operating in a state with stringent labor regulations, with which you must comply. Take California’s Labor Code section 2802(a), for example, which states that companies must indemnify employees for “necessary expenditures” directly related to their job duties—or they can sue for the balance, with interest and fees. The simplicity of section 2802’s language is what makes it so powerful and significant. Because California’s reimbursement statute does not identify specific types of business expenses, a broad array of expenditures could fall under the scope of reimbursements.

What happens in California does not always stay in California. The state’s size, complexity and politically active citizenry have long made it a legislative proving ground, meaning that laws and standards that start in California often spread to other states or become policy at the federal level. This has already begun to happen with similar labor regulations in states such as Massachusetts, South Dakota, North Dakota, New Hampshire, and Montana.

For example, Massachusetts’ regulations state that if an employer requires an employee to report somewhere other than their normal place of work, the employee must be paid for the excess time and expenses compared to his or her normal commute. While the laws in both Dakotas closely follow the language in California, and New Hampshire’s current labor law states that employers can require employees to absorb some expenses as part of their job, but that other employment-related expenses must be paid in full and in a timely manner.

The bottom line is that while the language may currently differ from state-to-state, more and more companies will need to adhere to these regulations as the laws spread across the nation. Those that do not accurately reimburse employees for employment-related expenses—and prove it through documentation that those employees are being paid is exactly what they’re owed—risk violating state labor laws, even unknowingly.

For evidence of employee lawsuits, one need look no further than the recent Uber, Starbucks and Walgreens lawsuits, to name a few. In each, employees sued their employer claiming that they were not properly paid for workplace expenses. As you may have seen, a Domino’s Pizza franchisee recently settled federal wage and hour claims by drivers for just under $1 million in Hines v. Cowabunga Inc.

Just as over-reimbursing employees could be a waste of money, under-reimbursing them could be even more expensive, as companies are forced to either pay hefty settlements or enter into lengthy court cases to defend their reimbursement plans.

You may not be in one of the states with specific laws on the books, but the regulatory trend is gaining favor. If you have mobile workers, make it a point to seek out solutions that make expense reimbursement fair and accurate across all categories of business spend. Your bottom line (and employees) will thank you for it.

Gas prices. Fuel costs are the largest daily expense for mobile workers. That makes gas price fluctuations critically important to companies with employees that drive for work as a regular part of their job function. Whether they are sales representatives or pizza delivery personnel, if they are driving for work, their employer owes them proper, accurate reimbursement for vehicle-related expenses.

Cars don’t print out receipts explaining exactly how much a work-related trip costs, so many companies use a flat cents-per-mile calculation or monthly car allowance to reimburse. But flat approaches reimburse all employees at the same rate/amount, and do not account for the gas price spikes (and falls) that drivers see at the pumps—or the difference between fuel costs across the country.

These approximations are frustrating for employers and employees alike—as employees want to know that their actual expenses are being covered (and that they aren’t being disadvantaged compared to their counterparts in other states), while employers want more visibility and control over reimbursements. Car allowance plans (which are taxable forms of compensation) and cents-per-mile rates (i.e., the IRS Rate) both suffer from this flaw.

As a matter of fact, the popular IRS Mileage Rate is not a recommended reimbursement rate at all—its purpose is to serve as the basis for individuals to calculate a tax deduction for their unreimbursed driving expenses. Further, it is only calculated once per year and its calculations are based on the previous year’s pricing data (e.g., fuel prices).

Precision matters. The only solution is accuracy, and that means making sure your organization—and, by extension, your employees—is precise, accurate, and fair with how expenses and reimbursements are tracked, reported, and reimbursed.

For employees who drive their own vehicles for work, being accurate in gas prices—whether they’re rising or falling—is important and can save you money in the long run. If the IRS Mileage Rate isn’t based on current fuel data, and flat expense allotments don’t take into account actual costs, then you need a better way. The IRS’ only recommended reimbursement approach, Fixed and Variable Rate (FAVR) reimbursement, can help avoid this problem. By including both fixed costs like car insurance and depreciation with variable costs including maintenance, oil, and tire wear, employers can ensure accurate (and defensible) reimbursements that account for all the unique costs employees incur when driving their vehicles for business.

Any errors in reporting or reimbursing—be they rounded-up business lunches, un-reimbursed phone expenses, software purchased to work-at-home, or incorrect mileage or gas allotments—can lead to expensive problems down the line. You need to be accurate, be fair, and be compliant.

You may not be in one of the states with specific laws on the books, but the regulatory trend is gaining favor. If you have mobile workers, make it a point to seek out solutions that make expense reimbursement fair and accurate across all categories of business spend. Your bottom line (and employees) will thank you for it.

Danielle Lackey is General Counsel for Motus.