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." This reimbursement law was challenged as being an increase in compensation in violation of the Constitution. 2, 1. A: The safest way to monitor employee reimbursements is to provide them on a request-by-request basis. You can explore additional available newsletters here. Plus, with federal and state eyes watching, having a compliant T&E process will need to be an even higher priority than it was before. [5] Massachusetts General Law Chapter 149, 148A and Fraelick v. PerkettPR, Inc., 83 Mass. T5`(N[pTgV There is a certain expectation that if an employee uses their own money on the business's behalf, they should get reimbursed. 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. The director of the department of administration shall also establish policies and procedures for claiming 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. Supplies that an employee purchases for business purposes can be reimbursed at cost, provided that they are reimbursed pursuant to an accountable plan. We do not handle any of the following cases: And we do not handle any cases outside of California. The minutes of the Commission's December 17, 1997 meeting demonstrate that the Commission intended that the salary clause be severable from the per diem clause. Former ARIZ. CONST. What may be reasonable in one instance might not be in another. Expense reimbursement is getting more and more complicated for your finance department, due largely to a newer legislative trend. Browse tips on what you need to launch, run, and scale a business successfully, from healthcare to hiring, filing taxes, or just creating a great place to work. The Legislature retains authority to set its own rates of reimbursement for necessary expenses. 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. art. %PDF-1.4 % Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. 7` )-4c!ftl@TZtJdD%. However, some states, such as California and Illinois, do require these reimbursements. First, double-check if your own state has any laws or any legislation circulating that could lead to new rules in the near future. J+cQR! hUn09imc8.=(2%C}"S6dR7@@*8k07\H05`kH? This approach is likely effective for employers in dealing with cell phone reimbursements as an employees cell phone bill is usually a fixed cost. &_n*eoPh`#BADX JaJt0N94BQ>1Jfm!t 6-t(YdIe: h If the employer does not have an accountable plan, then any reimbursements, even those that are ordinary and necessary, are taxable income. 3. Many of these states require employers to reimburse remote workers for any business-related expenses they have incurred. 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." The hiring of a lawyer is an important decision that should not be based solely upon advertisements. 0 The Commission members discussed whether the per diem clause was within their authority and the consequences if it were not. Reimbursement of expenses A. As mentioned, these new laws may require your department to tweak its current T&E policies and practices to align with state-specific rules. Before you decide, ask us to send you written information about our qualifications and experience. LawServer is for purposes of information only and is no substitute for legal advice. California remote employees are entitled to reimbursement for all of their reasonable financial job-related losses. The cost of work-related travel is generally a reimbursable expense. Mr Shouse has been recognized by the National Trial Lawyers as one of the Top 100 Criminal and Top 100 Civil Attorneys. 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. 708 0 obj <>stream For instance, if the employer has an accountable plan, but the employee fails to properly substantiate the expenses within a reasonable time, or the employee fails to return excess advance payments, then any reimbursements could become taxable income. Essentially, these are laws requiring companies to reimburse employees for necessary expenditures incurred on the job. 14-10709 Reimbursement of expenses Universal Citation: AZ Rev Stat 14-10709 (2016) 14-10709. The standard mileage rate is set by the IRS each year. A.R.S. 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. Youll want to proactively account for these business expenses in your T&E budget to stay on track financially and prevent issues. 1. How do you qualify? These state laws often require reimbursement for necessary job expenses such as: Covering work-from-home expenses has become a major concern since the Covid-19 pandemic has pushed many employees into remote work. 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. 2. Why do businesses need an accountable expense plan? As a result, many employers had to rapidly adjust to utilizing a virtual workforce. Expenses incurred by employees in the course of business should be costs incurred by the employer, not by its employees. The law covers reimbursement of travel by air, motor vehicles or railroads, meal and lodging expenses, so long as the claims are . A: No, an employer is not typically required to reimburse an employee for business-related expenses when they are neither required nor encouraged to work from home. The employee submitted the expense for reimbursement with proper supporting documentation * (i.e., a receipt) within 30 calendar days of when it was incurred. In addition, if any expenses are paid in excess of IRS limitations, then the excess is taxable income. Authorship Credit:Carter Norfleet and Shareef Farag. 4, pt. With Resourceful Finance Pro arriving in your inbox, you will never miss critical stories on accounting, benefits, payroll & employment law strategies. Learn more about our compliance support. As of Jan. 1, 2019, expenses are considered "necessary expenditures" and reimbursable if: 1. endstream endobj 932 0 obj <>stream It should be noted that what constitutes reasonable is a fact specific exercise and that employers should approach each employee reimbursement request as such. proactive. Business Expenses: A Beginner's Guide To Building A Plan. For example, California allows an employee up to three years to submit a reimbursement request. The voters did not intend this result when they passed Proposition 302. 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. 2023 LawServer Online, Inc. All rights reserved. office supplies and equipment, like printers and ink. 2. 180, 2 (currently codified at A.R.S. Ariz. Rev. 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. A separate section of that referendum limited reimbursement for travel and other necessary expenses to the same rates as were provided by law for other public officers. 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. As of Jan. 1, 2019, expenses are considered necessary expenditures and reimbursable if: 1. The Arizona Supreme Court upheld the law, concluding that reimbursement for expenditures fell outside the 1932 ban prohibiting the Legislature from changing its "compensation" or "salary." 61 (a)(1), whereas payments such as per diem that are intended to reimburse an employee for expenses incurred on behalf of the employer, are generally considered to be nontaxable. The District of Columbia's expense reimbursement law, found in Title 7 Section 910.1 of the D.C. Municipal Regulations, requires employers to pay the cost of purchasing and maintaining any. Under the Fair Labor Standards Act ("FLSA"), there is no direct expense reimbursement requirement. The California Labor Commissioners Office can also cite the employer for violating the law. The Arizona Constitution originally stated that "[u]ntil otherwise provided by law, members of the Legislature shall receive seven dollars per day . Stat. this Section. %PDF-1.6 % Having a business accountant and referring to employment counsel are two ways for businesses to ensure theyre deducting and reporting the right expenses. In Mid-March, much of the nations workforce began working from home due to the COVID-19 pandemic. Publicity Pamphlet at 159. It can also include, for example: Because the employer only has to cover these expenses when they are work-related, it can lead to disputes over what percentage of these costs are for business use and what portion is for personal use. 38-624 - Lodging expenses; meal and incidental expense reimbursement and long-term subsistence allowance; items covered by reimbursement; amount predetermined by department of administration from 2020 Arizona Revised Statutes [3] 820 Illinois Compiled Statute 115/9.5. Lastly, you know these new business expense reimbursement laws could impact your budgets going forward. 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. Finally! Expense reimbursement laws. )bdpw]o*)w1@3T l7+96CNxbjQg(@DkV`02(6CHzrd+=}eN^ eBhx.D?2:6dt{w5D&9?bDe M7`ih3lV Detailed Instructions for the Form GAO-502, State of Arizona Employee Expense Reimbursement Form . 1986); 26 U.S.C. For almost thirty years following the creation of the Commission, the Legislature continued to set its own reimbursement rates. Three of the four expressed their views on the severability issue, unanimously expressing their intent that the clauses be severable. Quot ; FLSA & quot ; FLSA & quot ; ), there is no expense. And Top 100 Criminal and Top 100 Civil Attorneys you decide, ask us to send written... To stay on track financially and prevent issues has been recognized by the employer not. Provide them on a request-by-request basis 1, 2019, expenses are paid in excess of limitations! 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