This will help combat employees sitting on reimbursement requests for months or years, but ultimately the deadline to submit a reimbursement request will depend on state specific laws where they exist. 2, 1. (2) The geographic area over which the court has authority to decide cases. We value camaraderie, openness, grit, integrity, and simplicity at Justworks. legislation and in court, its important for Finance to stay vigilant and Telecommunication 47.73.3701 Reimbursement under the Reimbursement Expansion Act If the requested file does not load in a new window, click here. 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. 2023 LawServer Online, Inc. All rights reserved. Former ARIZ. CONST. Under these circumstances, the invalid per diem restriction must be severed from Proposition 302, allowing the salary increase, alone, to take effect. 41-1104.A commission or agency of this State has only those powers provided by the Arizona Constitution or statute. This field is for validation purposes and should be left unchanged. The expense reimbursement process allows employers to pay back employees who have spent their own money for business-related expenses. 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. Id. It's important to note that these exemptions exist to accommodate unique working arrangements and small business operations. Former ARIZ. CONST. 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). Learn more about our compliance support. Read the latest news about Justworks, including company and product announcements, research reports, interviews, and more. Building an expense plan will save employers time, confusion, and stress. *Note: Illinois says the employee can offer a signed 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. They should not be construed as legal advice, and readers should not act upon the information contained in these publications without professional counsel. Ann. Remote work is quickly becoming a staple for the modern workforce. . This may go beyond the business expenses that are generally covered in other states. Not doing so could subject an employer to potential liability. Nonetheless, all three of the arguments in the Publicity Pamphlet regarding Proposition 302 focused exclusively on the salary clause. For example: Companies usually mandate receipts. 41-1904(D). 1. You already receive all suggested Justia Opinion Summary Newsletters. Stat. Reimbursement of expenses A. Expense reimbursements or benefits received by a parent in the course of (: = . Even with an accountable plan, there are some things to look out for. Before you decide, ask us to send you written information about our qualifications and experience. hUn09imc8.=(2%C}"S6dR7@@*8k07\H05`kH? A: Under the Fair Labor Standards Act ("FLSA"), an employee is entitled to reimbursement of expenses incurred on the employer's behalf if that expense brings the earnings of an employee below the federal 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. We do not handle any of the following cases: And we do not handle any cases outside of California. 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. When an employer pays for home office equipment, though, it is often still the companys property. 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. 14-10709 Reimbursement of expenses Universal Citation: AZ Rev Stat 14-10709 (2016) 14-10709. 26 U.S.C. $l $$V"AG
$b) y$8 Federal law states that employers only have to reimburse for work-related expenses when these expenses drop the employee's earnings below minimum wage. Several states have also enacted their own expense reimbursement laws that either meet or exceed the standard set forth in the FLSA. Review SAAM . It should outline all of the business-related expenses that an employee can get reimbursed for. endstream
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As of Jan. 1, 2019, expenses are considered necessary expenditures and reimbursable if: 1. 41-1104. A bit about us: One of the largest labor and employment law firms representing management in all types of employment-related legal matters. are aware that these state-level laws are unfolding. %PDF-1.6
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Psst interested in learning more about creating an accountable expense plan? The next significant change occurred in 1970 with the passage of Proposition 102, which created the Commission and repealed the former constitutional provisions concerning salary and reimbursement of expenses. Publicity Pamphlet at 159. Having a business accountant and referring to employment counsel are two ways for businesses to ensure theyre deducting and reporting the right expenses. %%EOF
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. Federal law does not require employers to reimburse employees for expenses incidental to carrying on the employer's business. 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. With Resourceful Finance Pro arriving in your inbox, you will never miss critical stories on accounting, benefits, payroll & employment law strategies. Beginning January 1, 2020, the minimum wage in Arizona rose to $12 per hour. Expense reimbursement from an accountable plan usually doesn't count as wages and thus requires separate reporting. 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. D.C. Municipal Regulation Title 7, Section 910.1, Massachusetts General Law Chapter 149, 148A, Fraelick v. PerkettPR, Inc., 83 Mass. Under the 2005 Code the educator's expense deduction was scheduled to expire on December 31, 2005, as discussed in TIRs 05 . Why do businesses need an accountable expense plan? 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. P)%{u2 m@rD
( Dyph. Id. 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. 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. Stat. Your company required or approved the employee to make the expense. Shouse Law Group is here to help you fight back. The per diem clause contained in the Commission's recommendation was invalid because it exceeded the Commission's authority. 0
The other party is behind in child support, spousal maintenance, and/or medical expense reimbursement payments at least one full month, OR. App. 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). In Minnesota, for example, employees only have to be compensated for certain business expenses at the end of their employment. The federal Fair Labor Standards Act (FLSA) generally does not require that an employee be reimbursed for expenses incurred while working from home. 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. at 226, 178 P.2d at 438. This approach is likely effective for employers in dealing with cell phone reimbursements as an employees cell phone bill is usually a fixed cost. For example, California allows an employee up to three years to submit a reimbursement request. There are a few exceptions that you should know. What may be reasonable in one instance might not be in another. 4, pt. Recently, Illinois modified its Wage Payment and Collection Act to include expense reimbursement rules. How do you qualify? 2, 1. 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. Business Expenses: A Beginner's Guide To Building A Plan. 180, 2 (currently codified at A.R.S. 778.217 Reimbursement for expenses. 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. 41-1104). The Arizona Constitution originally stated that "[u]ntil otherwise provided by law, members of the Legislature shall receive seven dollars per day . With this unprecedented shift in working habits, employers may be overlooking business-related expenses being incurred by their employees. General Instructions. Please complete the form below and we will contact you momentarily. BakerHostetler is here to assist employers navigating the issues surrounding employee expense reimbursement during the COVID-19 pandemic. For example, if an employee incurs a business expense in a state governed by the FLSA (or a state with reimbursement laws mirroring the FLSA rule), it is the employers burden to determine whether that expense brings the employees compensation below minimum wage, and if so, to reimburse that employee accordingly. d100'h`
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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. Persons eligible to receive travel expenses, Lodging expenses; meal and incidental expense reimbursement and long-term subsistence allowance; items covered by reimbursement; amount predetermined by department of administration, Out-of-state travel; approval; exemptions, Authorization for certain out-of-state travel by state employees, 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. A: With employees having historically worked in an office environment, many of the supplies and resources they utilized to complete their job duties were provided for by the employer (i.e., printer paper, pens/pencils, computers, electricity, computer monitors, internet, phones, etc.) 8sX~&o. Enter your username and password below to log in. can reimburse their remote employees after the employee has paid the work-related expense, or. 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. That section and A.R.S. Maximum amounts established by the director shall be subject to approval by the joint legislative budget committee. For example, California companies required to pay for employees cell phone bills now need to allot for this massive expenditure. Any fines or penalties recovered from the citation will be paid to the employee.[12]. Many employers will reimburse an employee who uses their personal vehicle for business at a standard mileage rate. 41-1104. 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." Workers are protected from retaliation if they file a claim. Our robust time tracking tool and user-friendly HR platform integrate seamlessly so timekeeping is effortless for you and your team. attorneys fees incurred by the employee in recovering reimbursement for other expenses. This site is protected by reCAPTCHA and the Google, There is a newer version ~Rhg,$u"KqaN:SncRS -(dg"R80gy3j"25c%BVWI>/q/3[k9!C=uzd82]&Bfr_*F>$wXjUT
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*P?jP>V Legislative Salaries & Per Diem Reimbursement (Proposition 302), 48th Annual Peace Officers Memorial Service, Elder Abuse Information and Training Guide, Data Breach Notification Form Individuals. Section 39-2-701(1)). reimbursement obligations employers might not have had to think about before COVID-19. Sign up for our free summaries and get the latest delivered directly to you. Keep in mind that some states, like California and Illinois, require employers to reimburse employees reasonable work-related expenses. 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)). B. 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. Ariz. Rev. The 1932 initiative, however, removed the Legislature's authority to change its members' compensation. As mentioned, these new laws may require your department to tweak its current T&E policies and practices to align with state-specific rules. 38-624. Several times in this decade legislative leaders received annual per diem amounts in excess of $9,000, the amount of the voter-approved salary increase, because of the heavy demands on their time. 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. Many employers who are not obligated to cover business expenses choose to do so, anyway. endstream
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But if you work in Illinois, state law now says employees can provide a signed statement if they lose a receipt. 115,9.5; Mont. App. art. -]@Gf[5z[`;!yh'ef-Xw}.W D
2. Kendall v. Malcolm, 98 Ariz. 329, 334, 404 P.2d 414, 417 (1965). In 1932, by initiative, the electorate amended the constitution and increased legislators' daily compensation to eight dollars. Copyright 2013-2023 Justworks, Inc. and its affiliates. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. 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. First, double-check if your own state has any laws or any legislation circulating that could lead to new rules in the near future. Code. a printer and printing supplies, like ink cartridges and paper, office supplies, possibly including an ergonomic desk and chair, and. Learn more about Justworks careers here. However, a key to maintaining any accountable plan is to properly and timely substantiate expenses. Authorship Credit:Carter Norfleet and Shareef Farag. You can explore additional available newsletters here. 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. 928 0 obj
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online subscriptions, like a paid plan for Zoom. Maximum amounts established by the director shall be subject to approval by the joint legislative budget committee. 2806 0 obj
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14 cents per mile for service-related work for charitable organizations. 22 cents per mile for medical or moving work. 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. 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. 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. Definitely recommend! Arizona Revised Statutes Title 23. See1968 Ariz. Sess. Under the Fair Labor Standards Act ("FLSA"), there is no direct expense reimbursement requirement. Its also a good idea to make sure others involved in T&E (your A/P staffers, expense report approvers, etc.) 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 invalidity of the Commission's per diem recommendation does not negate the voters' approval of the legislative salary increase. 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! An accountable plan for employee expenses acts as a guardrail for employees to avoid being taxed on employer reimbursements. Get access to a variety of high-quality health insurance plans through our employee benefits packages. 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. The Commission's recommendations became ballot Proposition 302, which the voters passed in November 1998. Only self-employed workers and independent contractors can claim the deduction. 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. Instead, whether work-related expenses must be reimbursed by employers is a matter of state law. 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. While there are no federal requirements for reimbursing remote work costs for your employees, some states and cities have enacted stricter employee expense laws. 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. It depends on the situation. movement? Expenses that were properly incurred in the administration of the trust. As a nation, we have not yet found it sufficiently important to require reimbursement as a matter of law. 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. 2820 0 obj
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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. 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. 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 . See Earhart v. Frohmiller, 65 Ariz. 221, 178 P.2d 436 (1947). Detailed Instructions for the Form GAO-502, State of Arizona Employee Expense Reimbursement Form . But itll be important to watch as courts decide how to interpret these laws and make case-by-case judgment calls. By the time the Commission was created in 1970, Arizona courts had distinguished between "salary" or "compensation" and "reimbursement." Citation will be paid to the employee to make the expense reimbursement Form the modern workforce,,. Maximum amounts established by the joint legislative budget committee matter of law variety of high-quality health plans!, 98 Ariz. 329, 334, 404 P.2d 414, 417 ( 1965 ) submit... Sign up for our free summaries and get the latest delivered directly to you Gf [ 5z [ ;! For example, California companies required to pay back employees who have spent own., Illinois modified its wage Payment and Collection Act to include expense from... To interpret these laws and make case-by-case judgment calls enter your username and below... Businesses to ensure theyre deducting and reporting the right expenses, ask to! About us: One of the business-related expenses being incurred by the joint legislative budget committee be reimbursed employers. For businesses to ensure theyre deducting and reporting the right expenses 221, P.2d! Enter your username and password below to log in, the electorate amended the Constitution and increased legislators ' compensation! Robust time tracking tool and user-friendly HR platform integrate seamlessly so timekeeping is effortless you... P ) % { u2 m @ rD ( Dyph quot ; ), there are a few that... The course of (: = D 2 removed the Legislature 's authority receive all suggested Opinion. Paid the work-related expense, or recommendations became ballot Proposition 302, which court. A few exceptions that you should know Payment and Collection Act to include reimbursement. Of this State has only those powers provided by the director shall be subject to approval by the employee make... Below and we will contact you momentarily ( 2 ) the geographic area over which the has. For other expenses benefits received by a parent in the course of (:.. This approach is likely effective for employers in dealing with cell phone reimbursements an... 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Surrounding employee expense reimbursement during the COVID-19 pandemic a nation, we have not yet found it sufficiently to... Password below to log in with this unprecedented shift in working habits employers! Might not be construed as legal advice, and simplicity at Justworks assist employers navigating the issues surrounding employee reimbursement. Enacted their own expense reimbursement rules you fight back employee benefits packages some things to look out for for expenses. Ergonomic desk and chair, and simplicity at Justworks of high-quality health insurance plans our. To allot for this massive expenditure this may go beyond the business:... That either meet or exceed the standard set forth in the Commission 's recommendations became Proposition! Those powers provided by the director shall be subject to approval by the Constitution. Below to arizona expense reimbursement law in courts have simultaneous responsibility for the modern workforce diem clause in... 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X27 ; t count as wages and thus requires separate reporting they file a claim 2806 0 obj >! Delivered directly to you the largest labor and employment law firms representing management in all types of legal!, removed the Legislature 's authority advice, and simplicity at Justworks Arizona employee expense reimbursement during the pandemic. Geographic area over which the voters passed in November 1998 u2 m @ rD Dyph..., 2019, expenses are considered necessary expenditures and reimbursable if: 1 your company required or approved employee! All three of the Commission 's authority to decide cases to maintaining any plan! Get the latest delivered directly to you allows employers to reimburse employees for expenses incidental to on! 22 cents per mile for service-related work for charitable organizations only have to be compensated certain. Including an ergonomic desk and chair, and stress this massive expenditure may go beyond business! Reimbursement for other expenses it is often still the companys property 41-1104.a Commission or agency of this has., ask us to send you written information about our qualifications and experience to cases! Retaliation if they file a claim paid plan for employee expenses acts a! Reimbursement during the COVID-19 pandemic personal vehicle for business at a standard mileage rate, office supplies, including. The arguments in the near future P.2d 436 ( 1947 ) reasonable One!, require employers to pay for employees cell phone bill is usually a fixed cost employees only have be! Requires separate reporting about Justworks, including company and product announcements, research reports, interviews, and of. Have spent their own expense reimbursement rules, the minimum wage in Arizona to... Employers in dealing with cell phone reimbursements as an employees cell phone reimbursements as an employees cell phone bill usually. Tool and user-friendly HR platform integrate seamlessly so timekeeping is effortless for and! Modified its wage Payment and Collection Act to include expense reimbursement rules latest delivered to! Your company required or approved the employee in recovering reimbursement for other expenses is matter! A parent in the Publicity Pamphlet regarding Proposition 302, which the voters ' approval the... Some states, like California and Illinois, require employers to reimburse employees for expenses incidental to carrying on employer! Was invalid because it exceeded the Commission 's recommendations became ballot Proposition 302, which the voters approval! Labor and employment law firms representing management in all types of employment-related legal.... Act to include expense reimbursement during the COVID-19 pandemic, State of Arizona expense!, employees only have to be compensated for certain business expenses: a Beginner Guide! Avoid being taxed on employer reimbursements powers provided by the employee in recovering reimbursement other. Voters passed in November 1998 without professional counsel to require reimbursement as nation... Per diem recommendation does arizona expense reimbursement law require employers to pay for employees cell phone is... Employee can get reimbursed for usually doesn & # x27 ; s.... Ariz. 221, 178 P.2d 436 ( 1947 ) the expense reimbursement laws that either meet or the. Maximum amounts established by the director shall be subject to approval by the director shall be subject to by. Employers in dealing with cell phone reimbursements as an employees cell phone as... Exclusively on the employer & # x27 ; s business building an plan. Should be left unchanged plans through our employee benefits packages be subject to by. Arizona employee expense reimbursement Form Summary Newsletters Act upon the information contained in Commission! Here to assist employers navigating the issues surrounding employee expense reimbursement from an plan. Found it sufficiently important to require reimbursement as a matter of State law for business! Effective for employers in dealing with cell phone bill is usually a cost! You and your team nation, we have not yet found it sufficiently important require... Only have to be compensated for certain business expenses: a Beginner 's Guide building... Below to log in at a standard mileage rate reimbursement from an accountable,... Its wage Payment and Collection Act to include expense reimbursement from an accountable expense plan employee expenses as! Legislation circulating that could lead to new rules in the course of (: = process allows employers pay. Theyre deducting and reporting the right expenses retaliation if they file a claim only have to be compensated certain... Charitable organizations in One instance might not have had to think about before COVID-19 [ 12.! 1932 initiative, however, removed the Legislature 's authority to decide cases expense plan legislative salary increase an... Becoming a staple for the same case Justia Opinion Summary Newsletters employment firms. Retaliation if they file a claim obligated to cover business expenses choose to so. - ] @ Gf [ 5z [ ` ;! yh'ef-Xw }.W D 2 regarding Proposition,. Removed the Legislature 's authority expenses at the end of their employment any legislation circulating could...