this Section. A bit about us: One of the largest labor and employment law firms representing management in all types of employment-related legal matters. (Cal. This reimbursement law was challenged as being an increase in compensation in violation of the Constitution. While the voters were given the recommendation as a whole, the Publicity Pamphlet demonstrates that the salary increase was the overriding consideration. This may go beyond the business expenses that are generally covered in other states. 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. This distinction between salary and per diem reimbursement is not unique. Again, it made no reference to the per diem limitation. 41-1104. Check out our online talks on topics that matter most when protecting your business and taking care of your team. 1. The cost of work-related travel is generally a reimbursable expense. Learn more about IRS rules and accountable reimbursement plans. New Hampshire law requires employers to reimburse employees for expenses within 30 days . The employee also must submit business expenses within a reasonable period of time after they occurred. Ct. 698 (2013). Generally, this wont include commuting expenses between an employees home and workplace. Shouse Law Group is here to help you fight back. Q ta$DLatBi$`1 #,b If you need a lawyer for personal injury, auto accidents, immigration, or m, If you need a lawyer rely on the Moore Law Firm. SeeHistorical Note, ARIZ. CONST. Claims for reimbursement must be filed not later than 180 days of incurrence of the expense . 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. 2894 0 obj <>stream Workers' compensation has different rules for travel reimbursement as stated under the Arizona Workers' Compensation Act. Our compliance support can help you navigate the unknown and comply with employment regulations. art. 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." Keep expense reimbursement separate from regular wages. Our company values are reflected in our product and in our team. Legislative Salaries & Per Diem Reimbursement (Proposition 302), 48th Annual Peace Officers Memorial Service, Elder Abuse Information and Training Guide, Data Breach Notification Form Individuals. They shall also receive mileage one way, by the shortest practicable route, at the rate of twenty cents per mile." How do you qualify? Ann. What are some examples of ordinary and necessary expenses that would require employer reimbursement? 38-621 through A.R.S. Several states, though, have statutes that detail when an employer has to reimburse an employee for business expenses including those related to working remotely or telecommuting. However, they frequently include the following expenses: The employers reimbursement policies for work-related expenses can also determine which expenses are covered. 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. Nonetheless, all three of the arguments in the Publicity Pamphlet regarding Proposition 302 focused exclusively on the salary clause. 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. Stat. The Pamphlet focused exclusively on the salary increase, not the per diem limitation. 41-1904(D). Maximum amounts established by the director shall be subject to approval by the joint legislative budget committee. This Office reached a similar conclusion in 1980. Salary: $150,000 - $220,000 per year. 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. 115,9.5; Mont. Minimum wage regulations apply only to employees. Iowa Code 91A.3 (6). In Ariz. Att'y Gen. Op. IRS Publication 535, Business Expenses, states the following: To be deductible, a business expense must be both ordinary and necessary. For instance, if the employer has an accountable plan, but the employee fails to properly substantiate the expenses within a reasonable time, or the employee fails to return excess advance payments, then any reimbursements could become taxable income. Psst interested in learning more about creating an accountable expense plan? An accountable plan is a plan under which allowances or reimbursements paid to employees for business-related expenses are not counted as income and are not subject to withholding. 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. Implement an Accountable Reimbursement Plan. 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. Under these circumstances, the invalid per diem restriction must be severed from Proposition 302, allowing the salary increase, alone, to take effect. Beginning January 1, 2020, the minimum wage in Arizona rose to $12 per hour. This is a recent change in tax law. reimbursement obligations employers might not have had to think about before COVID-19. A. hd0 _A;iR!l x6 ,x23CfI6t&4;I{0Ohj0_S30S5&q9 0 Lab. Publicity Pamphlet at 159. 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. . state laws, and the United States Code. The minutes of the Commission's December 17, 1997 meeting demonstrate that the Commission intended that the salary clause be severable from the per diem clause. -]@Gf[5z[`;!yh'ef-Xw}.W D Employees of the Arizona or federal government Employers whose businesses earn less than $500,000 per year and are not covered by the Fair Labor Standards Act (FLSA). endstream endobj startxref A second member expressed his view that, if the Commission and the public were in error in adopting the per diem clause, the Legislature could adjust the per diem in any way it wanted. To comply with state law (Arizona Revised Statutes (A.R.S. Make an impact on growing small businesses. endstream endobj startxref 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. 1986); 26 U.S.C. If the employer establishes a written accountable plan, and the employees submit properly documented expenses under that plan, then the reimbursements shouldnt count as taxable income. But itll be important to watch as courts decide how to interpret these laws and make case-by-case judgment calls. Mr Shouse has been recognized by the National Trial Lawyers as one of the Top 100 Criminal and Top 100 Civil Attorneys. However, a key to maintaining any accountable plan is to properly and timely substantiate expenses. The invalid per diem clause is clearly severable from the salary recommendation and, therefore, the voter-approved salary increase shall take effect. The extent of these expenses will depend on the employees job duties. statement regarding the expense instead of a receipt if supporting Lastly, you know these new business expense reimbursement laws could impact your budgets going forward. Three of the four expressed their views on the severability issue, unanimously expressing their intent that the clauses be severable. Remote work is quickly becoming a staple for the modern workforce. %PDF-1.6 % 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. Copyright 2023 Shouse Law Group, A.P.C. This approach is likely effective for employers in dealing with cell phone reimbursements as an employees cell phone bill is usually a fixed cost. art. Our mission is to help entrepreneurs and businesses grow with confidence. Similarly, large portions of A.R.S. For example, California allows an employee up to three years to submit a reimbursement request. What may be reasonable in one instance might not be in another. [11] California Labor Code 2802 LAB (An employer shall 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). [8] New Hampshire Revised Statutes 275:57. Even in cases where the reimbursement does count as wages, employees will usually want a detailed breakdown. 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. This field is for validation purposes and should be left unchanged. Id. This site is protected by reCAPTCHA and the Google, There is a newer version It did not mention the per diem clause. State of Arizona Request for Travel Advance - HRIS The Travel Advance is processed in the HRIS using screen ZR35.2. This rate applies to both cars and trucks and fluctuates year by year. Many of these states require employers to reimburse remote workers for any business-related expenses they have incurred. Expenses incurred by employees in the course of business should be costs incurred by the employer, not by its employees. As a nation, we have not yet found it sufficiently important to require reimbursement as a matter of law. 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. Several states have also enacted their own expense reimbursement laws that either meet or exceed the standard set forth in the FLSA. If the non-elected state employee per diem rate were applied to these legislative leaders, those individuals would have received an actualreductionin money from the State. 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. [3] 820 Illinois Compiled Statute 115/9.5. The employee submitted the expense for reimbursement with proper supporting documentation* (i.e., a receipt) within 30 calendar days of when it was incurred. Are employee reimbursement expenses taxable income? Thats where employee expense reimbursement comes in. B. Lodging expenses; meal and incidental expense reimbursement and long-term subsistence allowance; items covered by reimbursement; amount predetermined by department of administration. The information presented to the electorate demonstrates that its focus was the salary increase. The standard mileage rate is set by the IRS each year. Separation of Duties. Section 2802; 820 Ill. Comp. Under the 2005 Code the educator's expense deduction was scheduled to expire on December 31, 2005, as discussed in TIRs 05 . These states are: The requirements in these states are not all the same, however. 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. Rather, an employer should assess on a case-by-case basis the expenses incurred by an employee and make a reasonable determination as to what the proper level of reimbursement is for the expense claimed. With this unprecedented shift in working habits, employers may be overlooking business-related expenses being incurred by their employees. 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. Wed love to meet them. The, must substantiate his or her business expenses. Other states (like Alaska and Arkansas) require reimbursement only if equipment purchased by employees for work-related purposes cannot be used during normal social activities of the employee or if the purchase/expense would bring the employees compensation below minimum wage. (8 Alaska Admin Code Section 15.165; Code of Arkansas Rules and Regs., 010-14-107(B).). The per diem clause contained in the Commission's recommendation was invalid because it exceeded the Commission's authority. If an employer does not have an accountable plan in place, then IRS Publication 15 states: Payments to your employee for travel and other necessary expenses of your business under a nonaccountable plan are wages and are treated as supplemental wages and subject to the withholding and payment of income, social security, Medicare, and FUTA taxes.. 778.217 Reimbursement for expenses. %PDF-1.4 % Ditch the spreadsheets for HR software & tools weve built from the ground up. 4, pt. 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. For example: Companies usually mandate receipts. As of Jan. 1, 2019, expenses are considered "necessary expenditures" and reimbursable if: 1. 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