In this review, we followed up on the recommendations from our prior reports, Reports 17-306 and 19-302, Learn more about IRS rules and accountable reimbursement plans. Which states are at the forefront of this legislative SeeHistorical Note, ARIZ. CONST. Not doing so could subject an employer to potential liability. -Q3z78Zkx6 Often, an employer will be able to deduct those reimbursements, but the deduction amount may be limited. 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 you need a lawyer for personal injury, auto accidents, immigration, or m, If you need a lawyer rely on the Moore Law Firm. For almost thirty years following the creation of the Commission, the Legislature continued to set its own reimbursement rates. 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. As states continue to address expense reimbursement in The most common are work-related supplies, travel, meals, and entertainment. . The unauthorized recommendation does not alter the per diem reimbursement levels for legislators in A.R.S. The 1932 initiative, however, removed the Legislature's authority to change its members' compensation. 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. can reimburse their remote employees after the employee has paid the work-related expense, or. B. [2] D.C. Municipal Regulation Title 7, Section 910.1. 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. LawServer is for purposes of information only and is no substitute for legal advice. Our company values are reflected in our product and in our team. Code. There are a few exceptions that you should know. You will receive a link to create a new password via email. Having a business accountant and referring to employment counsel are two ways for businesses to ensure theyre deducting and reporting the right expenses. of The voters did not intend this result when they passed Proposition 302. %PDF-1.6 % Section 2802; 820 Ill. Comp. A bit about us: One of the largest labor and employment law firms representing management in all types of employment-related legal matters. [1] California Labor Code Section 2802 LAB. Stat. 1= ( The Pamphlet focused exclusively on the salary increase, not the per diem limitation. Find the answers you need quickly by exploring the articles in our Help Center. Employers should also reassess their employee reimbursement policies in order to ensure they remain compliant. [8] New Hampshire Revised Statutes 275:57. J+cQR! Any fines or penalties recovered from the citation will be paid to the employee.[12]. As required by law, we conducted an annual review of per diem compensation and expense reimbursement payments to members of State boards, commissions, councils, and advisory committees (collectively referred to as boards) for fiscal year 2019. . 7` )-4c!ftl@TZtJdD%. The Commission hasnoauthority to venture into other areas, such as recommending that Arizona voters approve entering treaties with foreign countries, imposing new taxes, or altering legislative per diem rates. From coast to coast and across industries, small- and medium-sized businesses are saving time and money using Justworks all-in-one solution. A.R.S. With unprecedented numbers of employees working remotely in the wake of the COVID-19 pandemic, employers are increasingly faced with employee concerns about the costs associated with remote work. 2, 1. 1130 0 obj <>stream 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. Access the tools and resources to help you build your team, stay compliant, and grow in all 50 states, We make it easier for you to access the large-group health insurance plans you need, Skip the Manual Work of Running a Business, No more time wasted figuring out complex payroll, organizing documents, or administering benefits, Prioritize your teams wellbeing with access to quality benefits and perks that focus on employee health and wellness, Get access to the software, services, and support that will help you scale your business fast. Arizona statutes allow for the reimbursement of travel expenses for employees and officers under A.R.S. *Note: Illinois says the employee can offer a signed When employees receive an expense reimbursement, typically they won't be required to report such payments as wages or income. The extent of these expenses will depend on the employees job duties. 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. For more information about the legal concepts addressed . Generally, this wont include commuting expenses between an employees home and workplace. office supplies and equipment, like printers and ink. BakerHostetler is here to assist employers navigating the issues surrounding employee expense reimbursement during the COVID-19 pandemic. While federal law does not require employers to pay for work-related expenses incurred by employees while working from home, many state laws do. Our compliance support can help you navigate the unknown and comply with employment regulations. are aware that these state-level laws are unfolding. art. Our mission is to help entrepreneurs and businesses grow with confidence. k6$ LPXDyA Expenses incurred by employees in the course of business should be costs incurred by the employer, not by its employees. . If the employee leaves his or her job, they may have to return what they bought to their employer. 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 . d100'h` 5 (This has remained the same for the last few years.) 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. 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. Terms of Use Privacy Policy Security. 708 0 obj <>stream Employee benefits, payroll, HR, and compliance all in one place with 24/7 support. Lost your password? If the requested file does not load in a new window, click here. 778.217 Reimbursement for expenses. SeeA.R.S. The federal Fair Labor Standards Act (FLSA) generally does not require that an employee be reimbursed for expenses incurred while working from home. this Section. 39-2-701. A trustee is entitled to be reimbursed out of the trust property, with reasonable interest, for: 1. (2) The geographic area over which the court has authority to decide cases. A. Proposition 302 had its origins with the Commission. Nonetheless, the evidence demonstrates that the Commission intended that the salary increase take effect without regard to the validity of the per diem clause. Id. : SECTION V . &_n*eoPh`#BADX JaJt0N94BQ>1Jfm!t 6-t(YdIe: h art. 2. 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. [5] Massachusetts General Law Chapter 149, 148A and Fraelick v. PerkettPR, Inc., 83 Mass. Mr Shouse has been recognized by the National Trial Lawyers as one of the Top 100 Criminal and Top 100 Civil Attorneys. Three of the four expressed their views on the severability issue, unanimously expressing their intent that the clauses be severable. Copyright 2013-2023 Justworks, Inc. and its affiliates. 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. No matter whether a company is big or small, every business incurs costs and expenses that may reduce the business' taxable income. art. 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. All rights reserved. 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." Monthly tips on running a business in your inbox. 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. 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. Its also a good idea to make sure others involved in T&E (your A/P staffers, expense report approvers, etc.) documentation doesnt exist, is missing or is lost. App. 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. 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. Stat. Learn more about our compliance support. Detailed Instructions for the Form GAO-502, State of Arizona Employee Expense Reimbursement Form . With Resourceful Finance Pro arriving in your inbox, you will never miss critical stories on accounting, benefits, payroll & employment law strategies. Justworks keeps you informed on employment regulations while taking care of your employer payroll tax filings. When employees receive an expense reimbursement, typically they wont be required to report such payments as wages or income. gV+(8 All claims for reimbursement shall be accompanied by lodging expense receipts. 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. Under these circumstances, the invalid per diem restriction must be severed from Proposition 302, allowing the salary increase, alone, to take effect. These are not typical expenses that employers would reimburse. The cost of work-related travel is generally a reimbursable expense. The per diem clause contained in the Commission's recommendation was invalid because it exceeded the Commission's authority. Keep expense reimbursement separate from regular wages. 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