Best Practices for Employers with the Rush to Remote Working, Best Practices for Navigating the Initial Lifting of Shelter-in-Place Orders, Data Privacy Issues Related to COVID-19 Health Questionnaires and Testing, Don't get schooled by employee childcare issues; what you need to know about leave laws as schools struggle with reopening, EEOC Guidance: To Keep Employees Home or Not, Employee Expense Reimbursement: Requirements and Trends in a WFH Environment, Employee Testing & Screening Update What Can and Can't Employers Do, Employers: Protect Your Company IP While Employees Work Remotely, Employment Lessons From the Early State Reopeners, Employment Litigation Predictions in a COVID-19 World: an Insider's View From the Plaintiff's Bar, How to Think About Moving to Permanently Remote Work, ICYMI Part 2: Employee Testing & Screening Update What Can and Cant Employers Do, Importance of Paying Attention to Pay Equity During COVID-19, Key Benefits Questions Around the CARES Act, Mandatory Vaccinations in the Workplace What US Employers Should Consider Now, Masks Unmasked What Employers Need to Know About Face Coverings, Planning Internships in the Summer of COVID-19, Practical Tips for Conducting RIFS During these Challenging Times, Prediction: COVID-Related Employment Litigation Trends, Quarantine Requirements for When Your Employees Travel to Hotspots. The vast majority of W-2 workers can't deduct unreimbursed employee expenses in 2020. %PDF-1.7 % . One Limitations Period for All: Illinois Supreme Court Holds All Claims Under BIPA Have a Five-Year Statute of Limitations. xbbb`b``3 2< 1. This form is used for reimbursements or expenses not already covered by a Non-Employee Travel (NET) card. If you're considering reimbursing expenses for home-based employees, it first helps to know the laws. The Tax Cut and Jobs Act (TCJA) eliminated unreimbursed employee expense deductions for all but a handful of . The new law in Illinois states that employers must reimburse all "necessary expenditures". expenses and follow procedure, any expense reimbursements could become taxable Employers, of course, want to ensure employees working from home have a workspace that is safe and productive. Iowa, Massachusetts, Montana, New York and Washington, D.C. require certain expense reimbursements. Download Statement of Incidental & Transportation Expenses (AC3259-S) They are reported If your employer is not adequately reimbursing you for expenses, you may not be receiving the federal minimum wage as required by the FLSA. Now let us go beyond your example and apply the same methodology to the next week, in which the same employee services the same customers who once again are charged $2000. payment, but what about reimbursements? Federal laws do not require employers to reimburse employees for work-related expenses, but a number of state laws do require reimbursement. The employee submitted the expense for reimbursement with proper supporting documentation * (i.e., a receipt) within 30 calendar days of when it was incurred. $('.container-footer').first().hide(); Employee expenses reimbursed through the Travel and Expense module include travel expenses, claims for damages, and other employee reimbursements. Employers can also attract and retain employees by offering transportation benefits. The FLSA does not explicitly require an employer to reimburse its employees for business expenses or deductions. Plaintiffs' attorneys have been pushing the boundaries of . Examples of benefits or wage supplements listed in the statute include, but are not limited to, the following: Is your employer refusing to compensate you for business-related expenses that you paid out of your pocket? This includes: Federal, State, County, City, Village, Town, School district, or certain quasi-government agencies. Setting expectations in written policies with guidelines and procedures for advance approval of such purchases will allow the employer to define the universe of necessary expenses. Here at LaborLawCenter our Compliance Experts are constantly working to stay on top of the many compliance changes so you don't have to. Common business NYC's Commuter Benefits Law took effect on January 1, 2016. Federal law doesn't require employers to reimburse their employees for work expenses. Tell us more about you to receive content related to your area or interests. submit reimbursable expenses within 30 days of incurring the expense. Additionally, employers that are found to have willfully failed to properly reimburse expenses may be required to pay interest and civil penalties of up to $1,000 per violation. The process for "Some plaintiffs' counsel have suggested that employers also have an obligation in today's workplace to reimburse employees for overhead expenses, such as utilities, rent or mortgage, and the cost of furniture. When an employee spends his or her own money on ordinary and necessary business expenses, a reimbursement or allowance arrangement is the system used to pay them back. For example, California Labor Code Section 2802(a) requires an employer to indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer. Failing to reimburse employees can lead to class or collective actions and quickly become incredibly burdensome for employers. By way of example, some of these statesnotably California and Illinoishave strict reimbursement laws. 2023 All Rights Reserved, NYC is a trademark and service mark of the City of New York. For example, in New York, employers must. Policy Statement. (last accessed Dec. 13, 2016). Under these policies, many employers are paying anywhere from $30 to $50 per month toward employee cell phone bills. The information that you provide is subject to MEL's Privacy Policy. While working from home raises a myriad of issues (e.g., data privacy and security, health and safety, employee engagement, and more), this post focuses on expense reimbursements related to telecommuting. The states with expense reimbursements statutes vary widely regarding what expenses must be reimbursed. Reimbursement for Travel and Moving Expenses Upon Transfer, Reassignment or Promotion, Reimbursement for Travel & Moving Expenses Upon Transfer, Reassignment or Promotion. When employees pay for necessary business expenses, their employers must promptly pay the employee expense reimbursement. The District of Columbia's expense reimbursement law requires employers to pay the cost of purchasing and maintaining any tools the employer requires to perform the employer's business. If the destination is close enough for employees to drive, they can request reimbursement for the miles driven on the trip. requesting reimbursement. David Williams claims in the class action legal filing that the company violated California labor law requiring that employees be paid for work-related expenses. excess reimbursements or allowances. Search and download FREE white papers from industry experts. ", Employers should have a written policy that outlines all expense reimbursements. The law is based on the Internal Revenue . If there's an . https://www.nysenate.gov/legislation/laws/STF/202 These kickbacks may result in an employee not earning the federal minimum hourly wage. EMPLOYEES COVERED/NOT COVERED BY THE LAW, V. TRANSIT COVERED/NOT COVERED BY THE LAW, VI. been paid as wages. Please log in as a SHRM member before saving bookmarks. I have been with Resourcing Edge for 13 years and grown to a leader as a Benefits Specialist.Our focus areas include: strategy, compliance, ACA, educating, develop and help our clients drive participation.With the partnership it allows our clients to concentrate on their business and help employees feel appreciated with a wide vast variety of benefit offerings. Federal law does not require employers to reimburse employees for expenses incidental to carrying on the employer's business. OSC will assist the Finance Office in reaching an agency-specific solution. (a) General rule. There are several states that require employers to reimburse for all necessary business-related expenses, including California, Illinois, Iowa, Massachusetts, Montana, New York and the District of Columbia (for more information, see SHRM's Multi-state Law Comparison Tool). With over 30 years of employment law experience, Lipsky Lowe LLP has a proven track record of advocating for clients in all areas of employment law, including employee expense reimbursements. Original Source: In light of this, as many as 11 US states, and Washington D.C., have introduced state laws that further protect their employees Remote Employee Reimbursement Laws. Are you a delivery driver who uses your vehicle to make deliveries for your employer? Since so many people are working remotely . New York State is one of only a few states that explicitly requires employers to reimburse employees for work-related expenses. (state law may require employees to be reimbursed for business expenses). City of New York. Under California law, an employer that does not reimburse employees risks a lawsuit where the damages will include not just the unreimbursed expenses but the attorneys fees incurred by the employee seeking reimbursement. While that might sound like only those costs that would not have been incurred but for work, that is not how the statute has been interpreted. accountable plan amounts arent considered wages, they arent subject to treated as supplemental wages and subject to taxes. Regardless of the specific avenue for ensuring the employer does not improperly shift business expenses to its employees, all employers should be aware of their obligations to reimburse and review and update their expense reimbursement policies to take into account the applicable law and the expenses their newly-expanded remote workforce might incur. amount for certain expenses. Find the latest news and members-only resources that can help employers navigate in an uncertain economy. Those expenses can further get defined as expenses . Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organizations culture, industry, and practices. The law in your state may be different from that discussed here. There is no federal requirement to reimburse employees for business-related expenses. Of course, the courts have not defined what reasonable percentage means, but the main options are: Given the practical challenges of (1) and (2) above, and the fact that many employees have cell phones that they prefer and the even greater complexity of applying this rubric to home internet use, many employers are looking for a simpler approach. Employee expenses reimbursed through the Travel and Expense module include travel expenses, claims for damages, and other employee reimbursements. For any questions please email or call Sarah Fuller at Sarah.F.Fuller@dol.nh.gov or 603-271-3597. "We strongly support our employees' right to make. Watch Now! In the Netherlands, the National Institute for Family Finance Information has determined that workplace expenses average two euros ($2.40) per worker per day, according to Reuters. The contractor can then deduct business expenses on their own tax return. Through The Employer Report blog, our lawyers provide legal updates and practical insights to help clients understand, prepare for and respond to the latest domestic and cross-border Labor and Employment issues affecting US and multinational employers. In California, when employees must use their personal cell phones for work-related calls, employers must pay some reasonable percentage of those phone bills even if employees incurred no extra expenses using their cell phone for work. business expenses. You have successfully saved this page as a bookmark. What's the Fate of the Federal Contractor Vaccine Mandate after SCOTUS's Stay of the OSHA ETS? The more employees who sign up for transportation benefits, the more the employer can save. Learn more about how to use and manage your travel card. Our mission is to be your solution for the easiest and most effective way to stay on top of New York City Mayor Bill de Blasio signed into law New York City Council Int. Employers in these jurisdictionsand elsewheremay want to consider the expenses they now expect employees to incur while teleworking and assess what reasonable reimbursement amount should be paid to . Law Salaries & Employee Benefits Reimbursement for Travel & Moving Expenses Upon Transfer, Reassignment or Promotion New York State Finance Law Sec. If employers hire employees in multiple states, they may modify their policies accordingly or simply make one generous policy for everyone. Non-teaching employees of school districts are subject to the NYS Minimum If you rely on information obtained from Google Translate, you do so at your own risk. ], and we calculate one third of the day is work-related, we'd round up to $30 for the month," he said. NYCs Commuter Benefits Law took effect on January 1, 2016. New York State reimburses employees for business use of a personal vehicle based on the standard mileage allowance established by the Internal Revenue Service (IRS) and the U.S. General Services Administration (GSA). New York State's Labor Law provides that employers who fail, neglect, or refuse to pay "benefits or wage supplements" to their employees are guilty of a misdemeanor. The IRS determines reimbursements on an employee-by-employee increasing citizen access. If employers fail to adequately reimburse these expenses, the employer may be receiving an hourly kickback from each employee. ", Lewis said that he implemented a written policy that anything expensed "is subject to return upon termination of employment, and [we created] an addendum that there could be a payroll deduction for any non-consumable expense not returned.". In yet other states, the statutes suggest that the employer is largely on the hook for what they authorize, e.g., explicitly or via a written policy. This serves several purposes. 2023 Lipsky Lowe LLP | Phone: 212-392-4772 0000007980 00000 n While most states don't have reimbursement laws, "it's up to the employer to do the right thing," said Laura Handrick, an HR professional at Choosing Therapy in Brooklyn, N.Y. She said that many employers are saving money on office overhead, such as facilities maintenance and electricity, while employees are working from home. Remote workers may qualify for other expense reimbursements, but this usually depends on the company's policy. employer as business expenses. https://www.nysenate.gov/legislation/laws/LAB/198-C Employers with questions about reimbursement of employee . In addition to state requirements, federal law under FLSA obligates employers to reimburse an employee's "expenses [incurred] on his employer's behalf or where he is required to expend sums by reason of action taken for the convenience of his employer." 29 CFR 778.217 (a). An unlawful kickback happens when the following three conditions occur: This FLSA kickback rule often comes into play in industries that hire delivery drivers. Should U.S. workplaces follow suit? Employers pay all of the advances, reimbursements, and charges for employees business expenses. Create an Expense Reimbursement Policy for the Employee Handbook. In addition to any other penalty or punishment otherwise prescribed by law, any employer who is party to an agreement to pay or provide benefits or wage supplements to employees or to a third party or fund for the benefit of employees and who fails, neglects or refuses to pay the amount or amounts necessary to provide such benefits or furnish var currentUrl = window.location.href.toLowerCase(); The Department of Consumer Affairs (DCA) enforces the law and coordinates the Citys public education and outreach campaign to help employers and employees know their responsibilities and rights when it comes to commuter benefits. Employers should also consider whether it is more cost-effective to provide equipment, cell service or Wifi service, or other necessary equipment directly than to reimburse. involved, such as compliance issues and how to report the reimbursements on And that doesn't factor in the hidden costs of training: time taken away from job duties, equipment. accountable or nonaccountable. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRMs permission. The FLSA, however, is implicated if an employee's unreimbursed business expenses bring their wages below the applicable minimum wage or cut into overtime wages. Trust said that most employers, including Sungevity, are reimbursing cellphone and Internet expenses on a proportional basis. a nonaccountable plan, any reimbursement or other allowance arrangement is 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. Namely, federal laws protect employees in terms of reimbursement for work-related expenses that sink their income below the federal minimum wage $7.25. Reimburse for the actual voice and/or data fees incurred for business purposes, which requires employees to submit expense reports itemizing the costs of calls made for work purposes and the costs of data used for work supported with cell phone bills or other evidence of the costs (this is a time intensive process for employees); Reimburse for a percentage of voice and/or data fees that accurately reflects the amount of mandatory business usage, and if a percentage or flat monthly amount is used, then allow employees to seek reimbursement for any additional costs incurred over the percentage or flat amount if the actual costs of business use exceed those amounts (this can be hard to determine given the number of different plans available); or. Now that employees are settling into longer-term remote working arrangements, employers are increasingly confronted with questions regarding their expense reimbursement obligations. 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Reimbursement obligations if the destination is close enough for employees business expenses or deductions IRS determines on! //Www.Nysenate.Gov/Legislation/Laws/Lab/198-C employers with questions about reimbursement of employee and Internet expenses on own. Arent considered wages, they can request reimbursement for the employee expense reimbursement contractor Vaccine Mandate after SCOTUS Stay. D.C. require certain expense reimbursements statutes vary widely regarding what expenses must reimbursed. Law doesn & # x27 ; s policy effect on January 1, 2016 who sign up for transportation,. Their employees for work-related expenses that sink their income below the federal contractor Vaccine Mandate after 's! Includes: federal, state, County, City, Village, Town School... By a Non-Employee Travel ( NET ) card sign up for transportation benefits, the employees... Of incurring the expense they may modify their policies accordingly or simply make one policy.