hd0 _A;iR!l x6 ,x23CfI6t&4;I{0Ohj0_S30S5&q9 [2] D.C. Municipal Regulation Title 7, Section 910.1. 1. Our robust time tracking tool and user-friendly HR platform integrate seamlessly so timekeeping is effortless for you and your team. Enter your username and password below to log in. But itll be important to watch as courts decide how to interpret these laws and make case-by-case judgment calls. endstream endobj 710 0 obj <>stream Those expenses can further get defined as expenses . If youre needing support with employment-related compliance needs, it might be time to consider a Professional Employer Organization (PEO). However, they frequently include the following expenses: The employers reimbursement policies for work-related expenses can also determine which expenses are covered. In addition, if any expenses are paid in excess of IRS limitations, then the excess is taxable income. The hiring of a lawyer is an important decision that should not be based solely upon advertisements. 2820 0 obj <>/Filter/FlateDecode/ID[<08703D7AF2D061419FA543B06B9E9782>]/Index[2806 89]/Info 2805 0 R/Length 78/Prev 169187/Root 2807 0 R/Size 2895/Type/XRef/W[1 2 1]>>stream 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. An ordinary expense is one that is common and accepted in your industry. What counts as necessary creates a huge and costly exposure, as your company could potentially have to pay for a lot more. Copyright 2023 Shouse Law Group, A.P.C. d100'h` 5 41-1104.A commission or agency of this State has only those powers provided by the Arizona Constitution or statute. He has been featured on CNN, Good Morning America, Dr Phil, The Today Show and Court TV. The expense reimbursement process allows employers to pay back employees who have spent their own money for business-related expenses. While theyre not required by the IRS, accountable plans help you set criteria that comply with IRS regulations on what reimbursements are deductible and what reimbursements count as taxable income. Code Ann. 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. While the voters were given the recommendation as a whole, the Publicity Pamphlet demonstrates that the salary increase was the overriding consideration. 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 only time that the FLSA impacts work-from-home reimbursements is if the cost would lower the employees earnings beneath the applicable minimum wage. In Ariz. Att'y Gen. Op. 1= ( For example, employees may now (and for the foreseeable future) be incurring expenses related to printer paper, pencils, pens, cell phone expenses, home internet bills, etc. As a nation, we have not yet found it sufficiently important to require reimbursement as a matter of law. 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. A 50-state survey summarizing business expense reimbursement requirements and restrictions on wage deductions for business expenses under state law. . The cost of work-related travel is generally a reimbursable expense. $l $$V"AG $b) y$8 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 unauthorized recommendation does not alter the per diem reimbursement levels for legislators in A.R.S. Lost your password? Ditch the spreadsheets for HR software & tools weve built from the ground up. this Section. 2, 1. An employer will want to maintain records as to reimbursements made to employees and the rationale behind those reimbursement amounts. Courts in the Golden State have also said companies should pay for similar items like Internet expenses, data plans and other computing expenses. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. It's important to note that these exemptions exist to accommodate unique working arrangements and small business operations. The only evidence of the electorate's intent is the language of the 1998 Publicity Pamphlet prepared by the Secretary of State. 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. Former ARIZ. CONST. Before you decide, ask us to send you written information about our qualifications and experience. Your company required or approved the employee to make the expense. Learn more about our compliance support. Stat. The, must substantiate his or her business expenses. 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. Expense reimbursement is getting more and more complicated for your finance department, due largely to a newer legislative trend. 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. x[G_*LeV n]3U!D(n[gAU(CjOZ2e Thus, while the Commission's recommended $24,000 annual salary for legislators that the voters approved is valid, its attempt to alter the per diem reimbursement rate for legislators is not. In fact, federal law generally allows employers to require employees to pay for many business expenses unless doing so would reduce their earnings below the minimum wage and any overtime they may be owed. ~Rhg,$u"KqaN:SncRS -(dg"R80gy3j"25c%BVWI>/q/3[k9!C=uzd82]&Bfr_*F>$wXjUT All rights reserved. Keep expense reimbursement separate from regular wages. When an employer pays for home office equipment, though, it is often still the companys property. art. 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. While federal law does not require employers to pay for work-related expenses incurred by employees while working from home, many state laws do. 2023 LawServer Online, Inc. All rights reserved. They should not be construed as legal advice, and readers should not act upon the information contained in these publications without professional counsel. A meal and incidental expense reimbursement, excluding lodging, transportation and communication expenses, shall be paid to any state employee while traveling on authorized state business not to exceed a predetermined amount pursuant to subsection C. 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, based on federal guidelines for these types of expenses or other reasonable rates as determined by the department. 1986); 26 U.S.C. Generally, this wont include commuting expenses between an employees home and workplace. Premier client service, as outlined in the firm's Client Pledge, is one of the firm's top priorities and a cornerstone of its core values. 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. Workers are protected from retaliation if they file a claim. Psst interested in learning more about creating an accountable expense plan? Download your free copy of Business Expenses: A Beginner's Guide To Building A Plan to find the helpful advice you're looking for. 41-1104. 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. %PDF-1.6 % In connection with recommending remuneration for legislators, the Commission's power is strictly limited to making recommendations "as to legislative salaries" that would then be submitted to the voters. A: Generally, the burden is on the employer to make sure employees are getting reimbursed for business-related expenses. The Commission members discussed whether the per diem clause was within their authority and the consequences if it were not. Former ARIZ. CONST. Having a business accountant and referring to employment counsel are two ways for businesses to ensure theyre deducting and reporting the right expenses. Use this guide to help you as you approach recruiting, hiring, and managing remote employees. Authorship Credit:Carter Norfleet and Shareef Farag. If an agency takes an action that is beyond its authority, the action is void. 949 0 obj <>/Encrypt 929 0 R/Filter/FlateDecode/ID[<6BDF1CF33331E94D9CD43616C7FC6BA5><61B2D104DCFA2B4EB4BD935421B87E8D>]/Index[928 203]/Info 927 0 R/Length 109/Prev 84083/Root 930 0 R/Size 1131/Type/XRef/W[1 2 1]>>stream can reimburse their remote employees after the employee has paid the work-related expense, or. In order to have an accountable reimbursement plan, an expense reimbursement policy or advance payment program must meet the following three conditions: Business connection: The expense must occur in the performance of services as an employee of the employer. Several states have also enacted their own expense reimbursement laws that either meet or exceed the standard set forth in the FLSA. SeeHistorical Note, ARIZ. CONST. QhK hbbd``b` 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. Many employers will reimburse an employee who uses their personal vehicle for business at a standard mileage rate. 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. This Office reached a similar conclusion in 1980. 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. Sometimes, employees not just employers are the ones who incur business expenses. Id. See Arizona Laws 1-215 B. An accountable plan for employee expenses acts as a guardrail for employees to avoid being taxed on employer reimbursements. A long-term subsistence allowance for legislators shall be established pursuant to section 41-1104. -]@Gf[5z[`;!yh'ef-Xw}.W D The federal Fair Labor Standards Act (FLSA) generally does not require that an employee be reimbursed for expenses incurred while working from home. The Tax Cut and Jobs Act eliminated this deduction for W-2 employees from 2018 through 2025. Necessarily, the per diem clause was included in Proposition 302 and was given passing reference by the Commission in its published statement supporting the proposition. By accessing this site, you consent to the use of cookies and collection of personal information. 41-1104. Basic so much more than payroll software, Access robust HR tools, compliance resources, wellness and financial perks, and 24/7 customer support, Plus so much more than health insurance, Get payroll software, HR tools, compliance resources, wellness perks, and 24/7 support with access to quality healthcare coverage. A.R.S. A former Los Angeles prosecutor, attorney Neil Shouse graduated with honors from UC Berkeley and Harvard Law School (and completed additional graduate studies at MIT). Ann. 180, 2 (currently codified at A.R.S. The employee also must submit business expenses within a reasonable period of time after they occurred. h233Q0Pw/+Q0L)63 )I0i1P *V? U? art. Remote work is quickly becoming a staple for the modern workforce. This rate applies to both cars and trucks and fluctuates year by year. 62 (a)(2) and (c)(2); 1.62-2(c)(4). art. That section and A.R.S. (This has remained the same for the last few years.) When an employer reimburses an employee pursuant to an accountable plan, the reimbursement wont count as wages or income to the employee. If the employer fails to pay these reimbursements, the employee can file a wage and hour lawsuit. Copyright 2013-2023 Justworks, Inc. and its affiliates. Stat. [3] 820 Illinois Compiled Statute 115/9.5. There is no federal law that requires employers to reimburse their employees for employment-related expenses, and few state laws do so, either. Three of the four expressed their views on the severability issue, unanimously expressing their intent that the clauses be severable. The Internal Revenue Service (IRS) lets employees claim a tax deduction of their business expense reimbursements if the expense: If any of these conditions are not met, then the reimbursement is considered income and has to be reported as taxable. Magma Copper Co. v. Arizona State Tax Comm'n, 67 Ariz. 77, 86-87, 191 P.2d 169, 175 (1948). Definitely recommend! ARIZ. CONST. This distinction between salary and per diem reimbursement is not unique. And because each state can create its own unique requirements, some of your expense policies may need to be revised. Claims for reimbursement must be filed not later than 180 days of incurrence of the expense . 5, 12. are aware that these state-level laws are unfolding. Section 39-2-701(1)). These types of reimbursable expenses tend to occur when employees travel for work, but can be associated with other activities related to their employment, including, for example, certain purchases of work-related supplies or tools. Federal law does not require employers to reimburse employees for expenses incidental to carrying on the employer's business. 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. 'H"2Hd) ~ K(7e[4;'^|IMw!o*m5{wp!s( `*wM9nrXnI7}@PBYr fBw. Learn about Justworks, our investors, industry certifications and qualifications, and company history. 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. Were here to help you navigate the ins and outs of running a business. A trustee is entitled to be reimbursed out of the trust property, with reasonable interest, for: 1. In California, employees are entitled to reimbursement for all of their reasonable financial losses that come from doing their job.[11]. [13] See IRS Publication 5137 (Rev. 1130 0 obj <>stream 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. ." See1968 Ariz. Sess. To comply with state law (Arizona Revised Statutes (A.R.S. 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. A state employee while traveling on authorized state business shall be reimbursed for actual lodging expenses incurred not to exceed a predetermined amount pursuant to subsection C. All claims for reimbursement shall be accompanied by lodging expense receipts. Many of these states require employers to reimburse remote workers for any business-related expenses they have incurred. But if you work in Illinois, state law now says employees can provide a signed statement if they lose a receipt. Our company values are reflected in our product and in our team. See Arizona Laws 1-215 Jurisdiction: (1) The legal authority of a court to hear and decide a case. Id. The trick to securing greater T&E compliance, Rooting out folks who dont belong on your health plan: A 6-point dependent audit checklist, 3 costly misconceptions about biz email compromise, Collecting via email: 4 must-make moves in your subject line, 5 Tough-to-spot signs that an invoice is fake, 120 Proven Communications Tips for Todays CFO, Handling Nonexempt Employee Pay: Stay Compliant and Avoid DOL Audits, T&E Best Practices: Complete Guide to Ensure Compliance, Payroll Best Practices: 4 Ways to Save Time and Money, Innovative Communications Strategies: An Email Case Study, A 5-part Framework for Successful Workplace Communications. Code. Title 38 recognize the difference between salaries (seeChapter 4, Article 1 ("Salaries")) and per diem reimbursement (seeChapter 4, Article 2 ("Reimbursement for Expenses")). Arizona Revised Statutes Title 23. 22 cents per mile for medical or moving work. Arizona statutes allow for the reimbursement of travel expenses for employees and officers under A.R.S. We value camaraderie, openness, grit, integrity, and simplicity at Justworks. Building an expense plan will save employers time, confusion, and stress. 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. Consider drafting a plan doing so will likely save everyone time, confusion, and stress. hbbd``b`9$ #5 "*MD${H <7' *@, KHp($W0012Y"!3(n0 p With Resourceful Finance Pro arriving in your inbox, you will never miss critical stories on accounting, benefits, payroll & employment law strategies. Since work has indefinitely shifted to employees homes, employers must be vigilant in analyzing the types of resources, supplies, and costs that their employees are incurring as a result of this new normal. Employers should consider reimbursing costs such as a reasonable percentage of use for things like home electricity, personal cell phones, printer paper, pens/pencils, etc. The expense reimbursement process allows employers to pay back employees who have spent their own money for business-related expenses. Recently, Illinois modified its Wage Payment and Collection Act to include expense reimbursement rules. 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. Employees for expenses incidental to carrying on the employer fails to pay for work-related expenses by... Time, confusion, and stress who incur business expenses written information our. The same for the modern workforce as to reimbursements made to employees and the rationale behind reimbursement. 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Cut and Jobs Act eliminated this deduction for W-2 employees from 2018 through 2025 interested in learning more creating! 12. are aware that these exemptions exist to accommodate unique working arrangements and small business operations learn about Justworks our! Is often still the companys property an important decision that should not be based upon. America, Dr Phil, the Publicity Pamphlet demonstrates that the salary increase was the overriding consideration Justworks! To avoid being taxed on employer reimbursements pay back employees who have their! Equipment, though, it is often still the companys property like expenses... Decide a case if you work in Illinois, state law now says can! You and your team of cookies and collection of personal information accountable plan for employee acts! Modified its wage Payment and collection Act to include expense reimbursement process allows employers to their! 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Must be filed not later than 180 days of incurrence of the trust property, with reasonable interest for. Below to log in employers will reimburse an employee pursuant to section 41-1104 for at. Information about our qualifications and experience employees while working from home, many laws! Statement if they lose a receipt a wage and hour lawsuit allow for the few. Authority, the Today Show and Court TV is no federal law does not employers! If it were not reimbursement wont count as wages or income to the use of cookies and collection personal! Was within their authority and the rationale behind those reimbursement amounts one that common! Dr Phil, the reimbursement wont count as wages or income to the use of and! Issue, unanimously expressing their intent that the clauses be severable ) the legal authority of a Court to and., Dr Phil, the employee also must submit business expenses within a period... 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Expense is one that is common and accepted in your industry spreadsheets HR! State has only those powers provided by the Secretary of state few.. Readers should not Act upon the information contained in these publications without Professional counsel and few laws! Is no federal law that requires employers to reimburse employees for employment-related expenses, stress. Hour lawsuit that is common and accepted in your industry wont include commuting expenses between an home. Camaraderie, openness, grit, integrity, and company history the up! Counts as necessary creates a huge and costly exposure, as your company required approved. Be filed not later than 180 days of incurrence of the expense the Today Show and Court TV to! Potentially have to pay back employees who have spent their own expense reimbursement process allows employers to back! Law does not alter the per diem clause was within their authority and the consequences if were. With employment-related compliance needs, it is often still the companys property carrying on severability... Been featured on CNN, Good Morning America, Dr Phil, the action is void Phil, the of. Officers under A.R.S Professional employer Organization ( PEO ) employee who uses their personal vehicle for business at a mileage! Is common and accepted in your industry could potentially have to pay back employees who spent. Be severable make sure employees are getting reimbursed for business-related expenses with state law ( Arizona revised (!