are aware that these state-level laws are unfolding. Sometimes, employees not just employers are the ones who incur business expenses. legislation and in court, its important for Finance to stay vigilant and Get free summaries of new opinions delivered to your inbox! 2. 2. 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. A long-term subsistence allowance for legislators shall be established pursuant to section 41-1104. Your company required or approved the employee to make the expense. A trustee is entitled to be reimbursed out of the trust property, with reasonable interest, for: 1. 1= ( 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. The California Labor Commissioners Office can also cite the employer for violating the law. 5, 12. Section 2802; 820 Ill. Comp. 41-1104). For more information about the legal concepts addressed . 41-1104.(1). Kendall v. Malcolm, 98 Ariz. 329, 334, 404 P.2d 414, 417 (1965). Keep expense reimbursement separate from regular wages. Code 62(a)(2)(D) allows an eligible educator to deduct from federal gross income unreimbursed, qualified expenses (e.g., expenses for books, supplies, and computer equipment used in the classroom; expenses incurred during qualified professional development courses). 62 (a)(2) and (c)(2); 1.62-2(c)(4). Laws ch. See Arizona Laws 1-215 B. 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. Payroll software that runs seamlessly so you can make any payments at no extra cost. The only evidence of the electorate's intent is the language of the 1998 Publicity Pamphlet prepared by the Secretary of State. We value camaraderie, openness, grit, integrity, and simplicity at Justworks. In Minnesota, for example, employees only have to be compensated for certain business expenses at the end of their employment. Under Arizona law, two provisions are severable if severance is consistent with the intent of those who created the law. 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. Often, an employer will be able to deduct those reimbursements, but the deduction amount may be limited. Question Presented 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 . They should not be construed as legal advice, and readers should not act upon the information contained in these publications without professional counsel. Those expenses can further get defined as expenses . If the employer fails to pay these reimbursements, the employee can file a wage and hour lawsuit. An expense does not have to be indispensable to be considered necessary.. [3] 820 Illinois Compiled Statute 115/9.5. 14 cents per mile for service-related work for charitable organizations. Consequently, legislators should be paid per diem using the rates in effect for legislators prior to the passage of Proposition 302; that is, using A.R.S. To comply with state law (Arizona Revised Statutes (A.R.S. As a result, many employers had to rapidly adjust to utilizing a virtual workforce. 1. This page is for instructional purposes only and need not be printed or retained with the claim. If the employer does not have an accountable plan, then any reimbursements, even those that are ordinary and necessary, are taxable income. Labor Section 23-1062. . Having a business accountant and referring to employment counsel are two ways for businesses to ensure theyre deducting and reporting the right expenses. It's important to note that these exemptions exist to accommodate unique working arrangements and small business operations. Make an impact on growing small businesses. New Hampshire law requires employers to reimburse employees for expenses within 30 days . 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. 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. reimbursement obligations employers might not have had to think about before COVID-19. : SECTION V . Learn about Justworks, our investors, industry certifications and qualifications, and company history. The invalid per diem clause is clearly severable from the salary recommendation and, therefore, the voter-approved salary increase shall take effect. of 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 . Monthly tips on running a business in your inbox. Detailed Instructions for the Form GAO-502, State of Arizona Employee Expense Reimbursement Form . App. 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. 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. 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. There is no federal law that requires employers to reimburse their employees for employment-related expenses, and few state laws do so, either. 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. 2023 LawServer Online, Inc. All rights reserved. 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. 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. 2. Building an expense plan will save employers time, confusion, and stress. Reimbursement of expenses A. Code. Download your free copy of Business Expenses: A Beginner's Guide To Building A Plan to find the helpful advice you're looking for. 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. Even in cases where the reimbursement does count as wages, employees will usually want a detailed breakdown. Our robust time tracking tool and user-friendly HR platform integrate seamlessly so timekeeping is effortless for you and your team. Youll want to proactively account for these business expenses in your T&E budget to stay on track financially and prevent issues. Please complete the form below and we will contact you momentarily. The information presented to the electorate demonstrates that its focus was the salary increase. The federal Fair Labor Standards Act (FLSA) generally does not require that an employee be reimbursed for expenses incurred while working from home. Id. These are not typical expenses that employers would reimburse. 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 of this section. The Arizona Constitution originally stated that "[u]ntil otherwise provided by law, members of the Legislature shall receive seven dollars per day . Code Ann. No matter whether a company is big or small, every business incurs costs and expenses that may reduce the business' taxable income. B. Many employers will reimburse an employee who uses their personal vehicle for business at a standard mileage rate. See Ruiz v. Hull, 191 Ariz. 441, 459, 957 P.2d 984, 1002 (1998)("the valid portion of the statute will be severed only if it can be determined from the language that the voters would have enacted the valid portion absent the invalid portion")(citingState Compensation Fund v. Symington, 174 Ariz. 188, 195, 848 P.2d 273, 280 (1993)). They were so pleasant and knowledgeable when I contacted them. 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. What may be reasonable in one instance might not be in another. endstream endobj startxref Our mission is to help entrepreneurs and businesses grow with confidence. Which states are at the forefront of this legislative attorneys fees incurred by the employee in recovering reimbursement for other expenses. 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. 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. 25-320) and federal law (42 United States Code, 651 et seq., 45 Code of Federal Regulations, 302.56) and amendments, if any. 14-10709 Reimbursement of expenses Universal Citation: AZ Rev Stat 14-10709 (2016) 14-10709. 180, 2 (currently codified at A.R.S. Where an employee incurs expenses on his employer's behalf or where he is required to expend sums by reason of action taken for the convenience of his employer, section 7 (e) (2) is applicable to reimbursement for such expenses. Stat. While there are no federal requirements for reimbursing remote work costs for your employees, some states and cities have enacted stricter employee expense laws. Check out our online talks on topics that matter most when protecting your business and taking care of your team. The invalidity of the Commission's per diem recommendation does not negate the voters' approval of the legislative salary increase. a printer and printing supplies, like ink cartridges and paper, office supplies, possibly including an ergonomic desk and chair, and. Workers' compensation has different rules for travel reimbursement as stated under the Arizona Workers' Compensation Act. Expense reimbursement laws. 26 U.S.C. art. Separation of Duties. Minimum wage regulations apply only to employees. If they do, the terms of reimbursement will likely be included in the employment contract or employee handbook. -]@Gf[5z[`;!yh'ef-Xw}.W D 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). 41-1904 authorized the Commission to recommend "legislative salaries" that are to be submitted to qualified electors at the next general election after each salary recommendation is made. Employers should also reassess their employee reimbursement policies in order to ensure they remain compliant. Thats where employee expense reimbursement comes in. 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. 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. See1968 Ariz. Sess. Many of these states require employers to reimburse remote workers for any business-related expenses they have incurred. California remote employees are entitled to reimbursement for all of their reasonable financial job-related losses. 4, pt. Shouse Law Group is here to help you fight back. For example, federal and state tax laws recognize that salaries are taxable income,Department of Revenue v. Arthur, 153 Ariz. 1, 734 P.2d 98 (App. However, some states, such as California and Illinois, do require these reimbursements. It depends on the situation. Covering work-from-home expenses has become a major concern since the Covid-19 pandemic has pushed many employees into remote work. Lost your password? . 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. $l $$V"AG $b) y$8 With this unprecedented shift in working habits, employers may be overlooking business-related expenses being incurred by their employees. Learn more about our compliance support. D.C. Municipal Regulation Title 7, Section 910.1, Massachusetts General Law Chapter 149, 148A, Fraelick v. PerkettPR, Inc., 83 Mass. Many employers will reimburse an employee who uses their personal vehicle for business at a standard mileage rate. *Note: Illinois says the employee can offer a signed The Commission also recommended that per diem paid to legislators be commensurate with that provided for non-elective state employees. 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. Very helpful with any questions and concerns and I can't thank them enough for the experience I had. All rights reserved. 41-1104.A commission or agency of this State has only those powers provided by the Arizona Constitution or statute. First, double-check if your own state has any laws or any legislation circulating that could lead to new rules in the near future. Ct. 698 (2013). On December 17, 1997, the Commission met and voted to recommend a salary increase for legislators from $15,000 to $24,000 per year. General Instructions. Shouse Law Group has wonderful customer service. Accordingly, we offer the following guidance: A: Under the Fair Labor Standards Act (FLSA), an employee is entitled to reimbursement of expenses incurred on the employers behalf if that expense brings the earnings of an employee below the federal minimum wage. art. Finally! 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 This rate applies to both cars and trucks and fluctuates year by year. An ordinary expense is one that is common and accepted in your industry. For example: Companies usually mandate receipts. Even with an accountable plan, there are some things to look out for. Claims for reimbursement must be filed not later than 180 days of incurrence of the expense . An employer will want to maintain records as to reimbursements made to employees and the rationale behind those reimbursement amounts. 2, 1. 4, pt. Expense reimbursement from an accountable plan usually doesn't count as wages and thus requires separate reporting. The employee submitted the expense for reimbursement with proper supporting documentation * (i.e., a receipt) within 30 calendar days of when it was incurred. This form is not to be used to record allowances. 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. All four members present voted in favor of the salary and per diem recommendations. 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 of this section. ARIZ. CONST. You already receive all suggested Justia Opinion Summary Newsletters. Streamline and simplify time tracking for you and your workforce. 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. A: Generally, the burden is on the employer to make sure employees are getting reimbursed for business-related expenses. 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. 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 providing employees reimbursements on a periodic basis, an employer should perform an analysis to ascertain an amount of reimbursement that is adequate to cover the actual expense incurred by the employee. You can explore additional available newsletters here. While the voters were given the recommendation as a whole, the Publicity Pamphlet demonstrates that the salary increase was the overriding consideration. The employee submitted the expense for reimbursement with proper supporting documentation* (i.e., a receipt) within 30 calendar days of when it was incurred. For 2023, the standard IRS mileage rates are: 65.5 cents per mile rate for regular business driving. A third member believed that the Commission was merely giving "an advisory opinion to the Legislature that they ought to review the per diem.". {KmT8(PI[I_,WH#R Wed love to meet them. From coast to coast and across industries, small- and medium-sized businesses are saving time and money using Justworks all-in-one solution. 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. . Its also a good idea to make sure others involved in T&E (your A/P staffers, expense report approvers, etc.) If you need a lawyer for personal injury, auto accidents, immigration, or m, If you need a lawyer rely on the Moore Law Firm. This field is for validation purposes and should be left unchanged. 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." 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. Arizona statutes allow for the reimbursement of travel expenses for employees and officers under A.R.S. Are employee reimbursement expenses taxable income? Essentially, these are laws requiring companies to reimburse employees for necessary expenditures incurred on the job. 778.217 Reimbursement for expenses. Generally, this wont include commuting expenses between an employees home and workplace. I'm interested in receiving information about Justworks. 7` )-4c!ftl@TZtJdD%. The Commission's recommendations became ballot Proposition 302, which the voters passed in November 1998. Legislative Salaries & Per Diem Reimbursement (Proposition 302), 48th Annual Peace Officers Memorial Service, Elder Abuse Information and Training Guide, Data Breach Notification Form Individuals. 2, 22. Code of Federal Regulations Title 47. 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. With Resourceful Finance Pro arriving in your inbox, you will never miss critical stories on accounting, benefits, payroll & employment law strategies. By accessing this site, you consent to the use of cookies and collection of personal information. 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. hbbd``b` This site is protected by reCAPTCHA and the Google, There is a newer version So, are reimbursements taxable? 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. [8] New Hampshire Revised Statutes 275:57. 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. When an employer pays for home office equipment, though, it is often still the companys property. Read the latest news about Justworks, including company and product announcements, research reports, interviews, and more. Our personal injury attorn, If you need a lawyer for personal injury, auto accidents, immigration, or m. %%EOF 2. For example, as demands on the Legislature have increased in recent years, legislative leaders have found it necessary to spend more time working at the Legislature than ever before. And because each state can create its own unique requirements, some of your expense policies may need to be revised. 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. Are you a Justworks customer? Our compliance support can help you navigate the unknown and comply with employment regulations. endstream endobj 2807 0 obj <>/Metadata 97 0 R/OCProperties<>/OCGs[2821 0 R]>>/PageLabels 2798 0 R/PageLayout/OneColumn/Pages 2800 0 R/PieceInfo<>>>/StructTreeRoot 120 0 R/Type/Catalog>> endobj 2808 0 obj <>/ExtGState<>/Font<>/ProcSet[/PDF/Text/ImageB]/Properties<>/XObject<>>>/Rotate 0/StructParents 0/Type/Page>> endobj 2809 0 obj <>stream . 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. Expenses incurred by employees in the course of business should be costs incurred by the employer, not by its employees. . Courts in the Golden State have also said companies should pay for similar items like Internet expenses, data plans and other computing expenses. That section and A.R.S. Three of the four expressed their views on the severability issue, unanimously expressing their intent that the clauses be severable. (a) General rule. Former ARIZ. CONST. Former ARIZ. CONST. 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. Additionally, the 1958 constitutional amendments treated salary and reimbursement separately. Code. Enter your username and password below to log in. Lab. 22 cents per mile for medical or moving work. A: The safest way to monitor employee reimbursements is to provide them on a request-by-request basis.

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