They should not be construed as legal advice, and readers should not act upon the information contained in these publications without professional counsel. The director may change the maximum amounts from time to time and may establish a separate maximum amount for geographical areas of the United States if the director finds that the reasonable cost varies significantly in one or more areas. . If an agency takes an action that is beyond its authority, the action is void. It depends on the situation. The employee submitted the expense for reimbursement with proper supporting documentation * (i.e., a receipt) within 30 calendar days of when it was incurred. [2] D.C. Municipal Regulation Title 7, Section 910.1. Additionally, the 1958 constitutional amendments treated salary and reimbursement separately. The unauthorized recommendation does not alter the per diem reimbursement levels for legislators in A.R.S. Detailed Instructions for the Form GAO-502, State of Arizona Employee Expense Reimbursement Form . Code. Title 38 recognize the difference between salaries (seeChapter 4, Article 1 ("Salaries")) and per diem reimbursement (seeChapter 4, Article 2 ("Reimbursement for Expenses")). For more information about the legal concepts addressed . 0
Cartel and Government Antitrust Investigations Task Force, Employee Benefits and Executive Compensation, International Trade and National Security, White Collar, Investigations and Securities Enforcement and Litigation, Blockchain Technologies and Digital Assets, Digital Assets Executive Order Resource Center. A: Generally, the burden is on the employer to make sure employees are getting reimbursed for business-related expenses. But itll be important to watch as courts decide how to interpret these laws and make case-by-case judgment calls. Thats where employee expense reimbursement comes in. C. The director of the department of administration shall establish maximum amounts for reimbursement for lodging and meal and incidental expenses or long-term subsistence incurred pursuant to subsections A and B of this section, based on federal guidelines for these types of expenses or other reasonable rates as determined by the department. 41-1104). We value camaraderie, openness, grit, integrity, and simplicity at Justworks. 1= (
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Returning excess amounts: If any amounts the employer pays to the employee exceed the amounts the employee spent, the employee must return excess amounts to the employer within a reasonable period of time. 2023 LawServer Online, Inc. All rights reserved. The cost of work-related travel, including transportation, lodging, meals, and entertainment that meet the criteria outlined in IRS Publication 463, Travel, Entertainment, Gift, and Car Expenses, are generally reimbursable expenses. Reimbursement for travel expenses in the State of Arizona applies only to public employees and officers, public institution employees, board members, or any other agency of the state. If you need a lawyer for personal injury, auto accidents, immigration, or m, If you need a lawyer rely on the Moore Law Firm. Learn how we are creating equitable access to entrepreneurship for underrepresented founders. If an employer knows that an employee will regularly incur a certain business-related/work-related expense, it can choose to increase that employees salary to cover the costs of those expenses. Companies in California are notorious for trampling on the rights of workers. Get to know our founding story and meet the Justworks Leadership Team. Were here to help you navigate the ins and outs of running a business. Further, Arizona statutes If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor. If the employer fails to pay these reimbursements, the employee can file a wage and hour lawsuit. An ordinary expense is one that is common and accepted in your industry. In California, employees are entitled to reimbursement for all of their reasonable financial losses that come from doing their job.[11]. 38-621 through A.R.S. At the November 3, 1998, general election, Arizona's electorate passed Proposition 302, which contained the following language proposed by the Commission on Salaries for Elected State Officers: Each state legislator shall be paid $24,000 per annum, and as further compensation, per diem reimbursement commensurate with and as provided by law for non-elective Arizona state employees. Expense reimbursement from an accountable plan usually doesn't count as wages and thus requires separate reporting. Former ARIZ. CONST. Enter your username and password below to log in. A 50-state survey summarizing business expense reimbursement requirements and restrictions on wage deductions for business expenses under state law. endstream
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All rights reserved. Lastly, you know these new business expense reimbursement laws could impact your budgets going forward. The hiring of a lawyer is an important decision that should not be based solely upon advertisements. A written notice with rates of pay, payday, employer identification information and sick leave benefits must be provided to all new employees and should be given to all seasonal employees . 5, 12. hbbd``b`9$ #5 "*MD${H <7' *@, KHp($W0012Y"!3(n0 p
Often, an employer will be able to deduct those reimbursements, but the deduction amount may be limited. This is why a good employee expense reimbursement policy can be handy. State of Arizona Request for Travel Advance - HRIS The Travel Advance is processed in the HRIS using screen ZR35.2. The expense reimbursement process allows employers to pay back employees who have spent their own money for business-related expenses. Business Expenses: A Beginner's Guide To Building A Plan. art. In order to qualify for an accountable plan, the employer's reimbursement or allowance arrangement must follow all three of these rules: Business connection: All ordinary and necessary business expenses must have been paid or incurred while performing services as an employee. 1130 0 obj
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The arguments did not mention the per diem clause. If the requested file does not load in a new window, click here. Id. 41-1104. He has been featured on CNN, Good Morning America, Dr Phil, The Today Show and Court TV. You will receive a link to create a new password via email. Baker & Hostetler LLP publications are intended to inform our clients and other friends of the firm about current legal developments of general interest. We do not handle any of the following cases: And we do not handle any cases outside of California. Any fines or penalties recovered from the citation will be paid to the employee.[12]. Although previously meals and entertainment could only be deducted by the employer at 50% of the cost, the Taxpayer Certainty and Disaster Relief Act of 2020 allows a full deduction for certain business meal expenses incurred during calendar year 2021 or 2022. Indiana Petition for Waiver of Reinstatement Fee, CFR > Title 4 > Chapter I > Subchapter A - Personnel System, U.S. Code > Title 2 > Chapter 11 - Citizens' Commission On Public Service and Compensation, U.S. Code > Title 39 > Part II - Personnel, U.S. Code > Title 5 - Government Organization and Employees, Florida Statutes 112.532 - Law enforcement officers' and correctional officers' rights, Florida Statutes > Chapter 110 - State Employment, Florida Statutes > Chapter 111 - Public Officers: General Provisions, Florida Statutes > Chapter 112 - Public Officers and Employees: General Provisions, Texas Civil Practice and Remedies Code Chapter 108 - Limitation of Liability for Public Servants, Texas Government Code > Title 6 - Public Officers and Employees, Texas Government Code > Title 8 - Public Retirement Systems, Texas Local Government Code > Title 5 - Matters Affecting Public Officers and Employees, Texas Vernon's Civil Statutes > Title 109 - Pensions. Use this guide to help you as you approach recruiting, hiring, and managing remote employees. of Keep in mind that some states, like California and Illinois, require employers to reimburse employees reasonable work-related expenses. ." General Instructions. As a nation, we have not yet found it sufficiently important to require reimbursement as a matter of law. Keep expense reimbursement separate from regular wages. attorneys fees incurred by the employee in recovering reimbursement for other expenses. As if IRS regulations werent enough to keep up with, some states are adding their own expense reimbursement laws that your staffers will have to comply with, too. [13] See IRS Publication 5137 (Rev. Justworks keeps you informed on employment regulations while taking care of your employer payroll tax filings. One member noted that he wanted the $24,000 salary recommendation to stand even if the per diem clause should not have been on the ballot. Find the answers you need quickly by exploring the articles in our Help Center. Why do businesses need an accountable expense plan? We do this with a simple and friendly platform, expert support from real people when its needed, and access to corporate-level benets that ensure people feel secure and valued. It's best to have a written employee expense reimbursement policy in your employee handbook to ensure your organization has an action plan for remote workers. %%EOF
Calculating a dollar amount to provide an employee based on a fixed number is much easier than trying to predict an employees printer paper cost per month. The only time that the FLSA impacts work-from-home reimbursements is if the cost would lower the employees earnings beneath the applicable minimum wage. this Section. [3] 820 Illinois Compiled Statute 115/9.5. Remote work is quickly becoming a staple for the modern workforce. An expense does not have to be indispensable to be considered necessary.. It should outline all of the business-related expenses that an employee can get reimbursed for. The lengthy history distinguishing salary from reimbursement (including per diem) in Arizona leads to the conclusion that the Commission has constitutional authority to recommendonlysalary changes. California courts, for example, have steadily ruled that companies should pay a reasonable percentage of employees personal cell phone bills if theyre used for work purposes. are aware that these state-level laws are unfolding. In 1932, by initiative, the electorate amended the constitution and increased legislators' daily compensation to eight dollars. &_n*eoPh`#BADX JaJt0N94BQ>1Jfm!t 6-t(YdIe: h
Lab. Section 39-2-701(1)). Minimum wage regulations apply only to employees. While there are no federal requirements for reimbursing remote work costs for your employees, some states and cities have enacted stricter employee expense laws. . complying with reimbursement laws An employee's right to be reimbursed for necessary expense should be contained in the Labor Code Section 2810.5 notice. Labor Section 23-1062. . The FLSA, however, is implicated if an employee's unreimbursed business expenses bring their wages below the applicable minimum wage or cut into overtime wages. 22 cents per mile for medical or moving work. Iowa Code 91A.3 (6). art. B. 3. LawServer is for purposes of information only and is no substitute for legal advice. Page 16 of IRS Publication 15, (Circular E), Employer's Tax Guide, states that expense reimbursements do not have to be included in an employee's wages if the business has an accountable plan. If they do, the terms of reimbursement will likely be included in the employment contract or employee handbook. However, because of the new normal of working from home, employers must vigilantly analyze the types of expenses their employees are incurring for business-related purposes and provide reimbursement accordingly. Are you a Justworks customer?
{KmT8(PI[I_,WH#R Our robust time tracking tool and user-friendly HR platform integrate seamlessly so timekeeping is effortless for you and your team. If you need a lawyer rely on the Moore Law Firm. The Tax Cut and Jobs Act eliminated this deduction for W-2 employees from 2018 through 2025. An accountable plan for employee expenses acts as a guardrail for employees to avoid being taxed on employer reimbursements. 2, 1, (2)(a) and (2)(b). Our company values are reflected in our product and in our team. Stat. Lost your password? The director may change the maximum amounts from time to time and may establish a separate maximum amount for geographical areas of the United States if the director finds that the reasonable cost varies significantly in one or more areas. This Office reached a similar conclusion in 1980. An employer will want to maintain records as to reimbursements made to employees and the rationale behind those reimbursement amounts. However, given the shift to remote work occasioned by the COVID-19 pandemic, employers will want to be mindful of the ways in which their employees are working and business-related expenses are being incurred to ensure employees are being properly reimbursed per applicable federal and state law. -]@Gf[5z[`;!yh'ef-Xw}.W D
Supplies that an employee purchases for business purposes can be reimbursed at cost, provided that they are reimbursed pursuant to an accountable plan. gV+(8 hYmo6z( $iXmA?xz9>6R./F1eQ#) F%L0Fh\"@&2"``g*BJhDiZXb However, there are some costs that employers know employees will incur on a monthly basis and so it may make sense to provide a reimbursement on a more periodic basis. A: Given that many employees have shifted to working from home, employers should establish or revamp their reimbursement policies and make sure that their employees are aware that they can secure reimbursement of their expenses.
Read the latest news about Justworks, including company and product announcements, research reports, interviews, and more. Because this only protects workers whose income is fairly close to the minimum wage, the FLSA is rarely implicated in reimbursements for work-related expenses. 928 0 obj
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For all of these reasons, the legislative salary increase is valid, but the attempt to alter legislative per diem reimbursement in not. Not doing so could subject an employer to potential liability. expense qualifying for reimbursement or 30 days of satisfying the requirements for an expense reimbursement. Ann. As of Jan. 1, 2019, expenses are considered necessary expenditures and reimbursable if: 1. If housing or meals are provided, the reimbursements may be less than, and cannot exceed, the lodging and meal and incidental expense reimbursements provided for pursuant to subsection C. You're all set! Several states have also enacted their own expense reimbursement laws that either meet or exceed the standard set forth in the FLSA. Consider drafting a plan doing so will likely save everyone time, confusion, and stress. Youll need to decide how to address and communicate any changes companywide. This reimbursement law was challenged as being an increase in compensation in violation of the Constitution. Download your free copy of Business Expenses: A Beginner's Guide To Building A Plan to find the helpful advice you're looking for. Other states (like Alaska and Arkansas) require reimbursement only if equipment purchased by employees for work-related purposes cannot be used during normal social activities of the employee or if the purchase/expense would bring the employees compensation below minimum wage. (8 Alaska Admin Code Section 15.165; Code of Arkansas Rules and Regs., 010-14-107(B).). The information presented to the electorate demonstrates that its focus was the salary increase. Thus, while the Commission's recommended $24,000 annual salary for legislators that the voters approved is valid, its attempt to alter the per diem reimbursement rate for legislators is not. home utilities, like heat and air conditioning. What may be reasonable in one instance might not be in another. Employers should also reassess their employee reimbursement policies in order to ensure they remain compliant. Many employers will reimburse an employee who uses their personal vehicle for business at a standard mileage rate. When employees receive an expense reimbursement, typically they wont be required to report such payments as wages or income. Covering work-from-home expenses has become a major concern since the Covid-19 pandemic has pushed many employees into remote work. So, are reimbursements taxable?
4, pt. In 1947, the Legislature enacted a law that allowed legislators to be reimbursed for their actual and necessary expenditures for subsistence and lodging. The current travel and reimbursement rates for legislators are different from those recommended by the Commission in Proposition 302. The commissioners were the architects of the language and intended that the salary increase be allowed to stand even if the per diem clause were invalid. 2894 0 obj
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Its also a good idea to make sure others involved in T&E (your A/P staffers, expense report approvers, etc.) Very helpful with any questions and concerns and I can't thank them enough for the experience I had. Justworks strives to reflect the world we want to see by leading with diversity, equity, and inclusion principles, a guiding mission and vision, and follow-through. Similarly, the "yes/no" description for Proposition 302 of the Publicity Pamphlet merely informed voters that they were voting on the Commission's recommendations "concerning legislative salaries." Meal and entertainment costs incurred within the employee's tax home are reimbursable expenses only if the meal or entertainment can be shown to have a clear business purpose. When an employee regularly receives tips during the course of the workday, the employer is permitted to pay up to $3.00 per hour less than minimum wage. online subscriptions, like a paid plan for Zoom. 41-1104. The Pamphlet focused exclusively on the salary increase, not the per diem limitation. For example, California companies required to pay for employees cell phone bills now need to allot for this massive expenditure. )bdpw]o*)w1@3T l7+96CNxbjQg(@DkV`02(6CHzrd+=}eN^
eBhx.D?2:6dt{w5D&9?bDe M7`ih3lV In New York, on the other hand, employers who fail to reimburse a non-exempt employee for reimbursable expenses can be charged with a misdemeanor crime. endstream
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Ann. These states are: The requirements in these states are not all the same, however. Copyright 2023 Shouse Law Group, A.P.C. Code Ann. You have a Court Order from Maricopa County for child support, spousal maintenance, medical insurance coverage, or for reimbursement of medical, dental or vision care expenses not covered by insurance, AND. By the time the Commission was created in 1970, Arizona courts had distinguished between "salary" or "compensation" and "reimbursement." No matter whether a company is big or small, every business incurs costs and expenses that may reduce the business' taxable income. at 2(b). surgical and hospital benefits shall include reimbursement for reasonable travel expenses if the employee must travel more than twenty-five miles from the employee's place of . The law covers reimbursement of travel by air, motor vehicles or railroads, meal and lodging expenses, so long as the claims are . Copyright 2013-2023 Justworks, Inc. and its affiliates. First, double-check if your own state has any laws or any legislation circulating that could lead to new rules in the near future. The director of the department of administration shall also establish policies and procedures for the claiming of lodging and meal and incidental expense reimbursements and long-term subsistence allowances by persons temporarily required, for a period of not less than thirty days, to reside away from their primary place of residence. Salary: $150,000 - $220,000 per year. endstream
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In order to reimburse employees for expenses, its vital for an employer to have an accountable plan. This rate applies to both cars and trucks and fluctuates year by year. 8sX~&o. Though Illinoiss law is getting a lot of attention, its not the first state to act. D. The director of the department of administration shall establish in the state accounting manual uniform procedures by which amounts less than the maximum lodging and meal and incidental expense reimbursement amounts may be claimed by a person who is in travel status for less than a full twenty-four hour period or by a person who does not provide lodging receipts. Recently, Illinois modified its Wage Payment and Collection Act to include expense reimbursement rules. Learn more about IRS rules and accountable reimbursement plans. Justworks helps businesses with their benefits, payroll, and everything else they need to take care of their team. 4, pt. When an employer reimburses an employee pursuant to an accountable plan, the reimbursement wont count as wages or income to the employee. Workers are protected from retaliation if they file a claim. C. Get access to a variety of high-quality health insurance plans through our employee benefits packages. Shouse Law Group is here to help you fight back. [5] Massachusetts General Law Chapter 149, 148A and Fraelick v. PerkettPR, Inc., 83 Mass. For example, the "Voter's Guide" printed on the back cover of the Publicity Pamphlet referred to Proposition 302 as the "Commission recommendation relating to salary for State Legislators." {W%iw QT4Ta C5,m= Kendall v. Malcolm, 98 Ariz. 329, 334, 404 P.2d 414, 417 (1965). In Mid-March, much of the nations workforce began working from home due to the COVID-19 pandemic. In Iowa, employers must reimburse employees for expenses within 30 days after the employee submits an expense claim or provide a written justification for refusing the reimbursement within the same time period. Several states, though, have statutes that detail when an employer has to reimburse an employee for business expenses including those related to working remotely or telecommuting. 4, pt.2, 1, (2)(a). 2806 0 obj
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documentation doesnt exist, is missing or is lost. Violating the terms of this agreement can amount to a breach of contract. Substantiation: The employee must substantiate his or her business expenses by providing the employer with evidence of the amount, time, place, and business purpose of the expense. Please complete the form below and we will contact you momentarily. Under Arizona law, two provisions are severable if severance is consistent with the intent of those who created the law. Code. Finally! 38-624. 115,9.5; Mont. endstream
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Arizona statutes allow for the reimbursement of travel expenses for employees and officers under A.R.S. 778.217 Reimbursement for expenses. Check out our online talks on topics that matter most when protecting your business and taking care of your team. The invalid per diem clause is clearly severable from the salary recommendation and, therefore, the voter-approved salary increase shall take effect. J+cQR! Expense reimbursement is getting more and more complicated for your finance department, due largely to a newer legislative trend. Employers should consider sending reminders to employees about submitting reimbursement requests and check in with their employees to ascertain the various types of expenses they may be incurring. : SECTION V . Laws ch. Expense reimbursement lawsuits were already commonplace before the pandemic, and with no end in sight to the pandemic and employees working from home, employers can expect additional lawsuits to be filed. Separation of Duties. art. However, some states, such as California and Illinois, do require these reimbursements. [8] New Hampshire Revised Statutes 275:57. This field is for validation purposes and should be left unchanged. Id. This distinction between salary and per diem reimbursement is not unique. Even with an accountable plan, there are some things to look out for. Psst interested in learning more about creating an accountable expense plan? See Earhart v. Frohmiller, 65 Ariz. at 226, 178 P.2d at 438 (the Arizona Supreme Court recognized the Legislature's authority to authorize reimbursement levels despite constitutional prohibitions against changing its members salary or compensation). T5`(N[pTgV
F . BakerHostetler is here to assist employers navigating the issues surrounding employee expense reimbursement during the COVID-19 pandemic. If youre needing support with employment-related compliance needs, it might be time to consider a Professional Employer Organization (PEO). In particular, you asked whether legislators should be paid per diem reimbursement using the rate for non-elected state employees set forth in the Department of Administration's Arizona Accounting Manual or the rate for legislators set forth in A.R.S. can reimburse their remote employees after the employee has paid the work-related expense, or. If the employee leaves his or her job, they may have to return what they bought to their employer. Other jurisdictions that already have expense reimbursement laws on the books include: Generally, your department knows what typical business expenses states will expect to be reimbursed, like transportation, lodging, meals and entertainment. A: An employer is likely not responsible for the entire personal cell phone bill of an employee simply because that employee uses his/her personal cell phone for work purposes. Learn more about Justworks careers here. hbbd``b` Again, it made no reference to the per diem limitation. Similarly, large portions of A.R.S. 62 (a)(2) and (c)(2); 1.62-2(c)(4). Stat. This site is protected by reCAPTCHA and the Google, There is a newer version Resourceful Finance Pro, part of the SuccessFuel Network, provides the latest Finance and employment law news for Finance professionals in the trenches of small-to-medium-sized businesses.