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 Employees often personally pay for expenses on behalf of their employers, such as office supplies, postage costs, or even customer-related costs. New York State Finance Law Section 202 - Reimbursement for Travel and Moving Expenses Upon Transfer, Reassignment or Promotion New York Laws State Fin. Plaintiffs' attorneys have been pushing the boundaries of . ,@%+e[ b` rM@@x N8 A skilled wage and hour attorney can shed light on whether or not your employer is legally required to reimburse you. The Tax Cuts and Jobs Act, which went into effect in 2018, took away a package of tax breaks, including a write-off for unreimbursed employee expenses. This serves several purposes. Namely, federal laws protect employees in terms of reimbursement for work-related expenses that sink their income below the federal minimum wage $7.25. 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. However, if the . New OSHA Guidance Clarifies Return-to-Work Expectations, Trump Suspends New H-1B Visas Through 2020, Faking COVID-19 Illness Can Have Serious Consequences, Crafting Benefits for Onsite vs. Offsite Employees, After Amazon Announces Return-to-Office Policy, Workers Push Back. When Should Employers Reimburse Expenses for Remote Workers? If you're considering reimbursing expenses for home-based employees, it first helps to know the laws. Employers can save by reducing their payroll taxes. Patagonia reaffirmed its commitment to covering employee travel expenses for abortions: "Caring for employees extends beyond basic health insurance," the company said on LinkedIn. . Many months later, the majority are still working at home and could be well into next year, if not permanently. The information that you provide is subject to MEL's Privacy Policy. Employer has not reimbursed expenses for months. Employers must reimburse their employees within 30 days of the reimbursement becoming due. 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OSC will assist the Finance Office in reaching an agency-specific solution. Montana's employee business expense reimbursement law is similar to that of California's and Illinois'. In that instance, even if there is no additional cost to the employee, the employer must reimburse so as not to enjoy a windfall, some courts have reasoned. Watch Now! 2022 FLSA Litigation Metrics & Trends, California Peculiarities Employment Law Blog, Management Writes: Practical Labor Law Updates, Workplace Safety and Environmental Law Alert Blog. If you rely on information obtained from Google Translate, you do so at your own risk. depending on whether you have an accountable or nonaccountable plan. Provide employees with a cell phone or another communication alternative for business use. Employers are therefore well advised to re-evaluate the scope of potential expenses, legal obligations for reimbursement, and the state of written policies to ensure the greatest measure of compliance with law. However, the "Google Translate" option may help you to read it in other languages. temp_style.textContent = '.ms-rtestate-field > p:first-child.is-empty.d-none, .ms-rtestate-field > .fltter .is-empty.d-none, .ZWSC-cleaned.is-empty.d-none {display:block !important;}'; I most recently submitted my expenses as well as my consulting fees to my ex employer my ex employer responded back by telling me that it is company policy that I only have three months to submit any expense reimbursement and consulting fees, because my e. Can a company not reimburse employees for expenses submitted past 3 months from date of purchase? Seyfarth Shaws Wage & Hour Litigation Blog is a resource for employers to stay current on developments in wage and hour law, including recent court decisions, legislative updates, and Department of Labor compliance, rule-making and enforcement activities. "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. No. The policy should clearly articulate the employers expectations for the tools and equipment that are necessary to do the job from home, and establish guardrails for when and how employees can purchase equipment with the expectation that the company will foot the bill. 0000003803 00000 n If there's an . While employers typically provide a range of office supplies to remote workers, including laptops, keyboards and printers, employees often payfor additional expenses. Please enable scripts and reload this page. Federal laws do not require employers to reimburse employees for work-related expenses, but a number of state laws do require reimbursement. seems simple enough an employee pays for a business expense out of pocket, and should re-examine their reimbursement and allowance policies in light of the Tell us more about you to receive content related to your area or interests. The State Minimum Wage Law does not apply to public agencies. oversight to make sure all reimbursements are properly received, reported, and The Firm is known for its global perspective, deep understanding of the local language and culture of business, uncompromising commitment to excellence, and world-class fluency in its client service. It follows that if employers allow their employees to opt to use their personal cell phone, instead of a company-issued cell phone, that they should be reimbursed a reasonable percentage of their phone bill for work-related calls or other data usage for using texts or the internet for work purposes. Does your employer fail to compensate you for other regular expenses? Not timely? All rights reserved. The expense reimbursement process enables an employer to pay funds back to an employee for business-related expenses they paid for with their own money. "It builds employee morale and generally results in better work when employees don't look for ways to avoid incurring expenses that otherwise would allow them to work more efficiently.". One of the key components of the most onerous expense reimbursement laws is the requirement to reimburse for any necessary expense, which begs many a question about what types of expenses must be reimbursed. treated as supplemental wages and subject to taxes. . It appears that your web browser does not support JavaScript, or you have temporarily disabled scripting. The best way to avoid issues, Samuel said, is to have a written policy that "describes a process for expense reimbursement that includes checks and balances, such as advance approval for expenses over a certain limit, a verification process for reimbursement of incurred expenses and deadlines for submissions. See Cochran v. Schwans Home Serv., Inc. Alternatively, employers can establish a process by which employees are only reimbursed after submitting a receipt or other documentation confirming that they indeed incurred the expense. . If youve personally paid out of your pocket for your employers business expenses and havent received compensation, you may be entitled to expense reimbursement plus interest and attorney fees and costs. Policy Statement. we provide special support Reimbursement for business-related expenses. He exclusively uses 10% of his apartment as his office. While there is some discretion the employer can exercise in determining the amount of reimbursement (such as actual expenses and the reasonableness of the employee's choice: i.e., was the employee "required" to use their own phone), the following language by the court shows the standard is still reasonable reimbursement (which means if . California has one of the most complicated and well-defined employee expense reimbursement laws. Dutch authorities have since used this research to give government employees a 363 euro ($429) COVID-19 bonus to cover items they would have normally received for free in the office, such as coffee and tea, toilet paper, and Internet access and utilities used during work hours. Pandemic or no, reimbursement policies for work-related employee expenditures "should already be on employers' radar," according to Lenore Horton, an employment attorney with FisherBroyles . To assist in these efforts, below, we provide a high-level summary of relevant laws, policy considerations, and best practices. a nonaccountable plan, any reimbursement or other allowance arrangement is Accountable Plan In Now that employees are settling into longer-term remote working arrangements, employers are increasingly confronted with questions regarding their expense reimbursement obligations. Mileage rates Mileage rates are based on the standard mileage allowance established by the Internal Revenue Service. Its important to know which business expenses are valid or not, and to separate business expenses from personal expenses, capital expenses, and expenses to figure the cost of goods sold. Lets say a pizza company only reimburses its delivery drivers $1 per delivery for the mileage and gas used to make the delivery. Can employers require employees to use of personal devices & internet for work duties? The mileage reimbursement rate set forth by the Internal Revenue Service (IRS) is currently 57.5 cents per mile as of 2019. Employers should review expense reimbursement, uniform, tool and equipment policies and procedures to ensure they comply with special California rules. trailer To request permission for specific items, click on the reuse permissions button on the page where you find the item. Our attorneys are familiar with the applicable federal, state, and local laws surrounding employee reimbursements and will help you explore your legal options for pursuing reimbursement from your employer. }); if($('.container-footer').length > 1){ for non-profit, educational, and government users. If the destination is close enough for employees to drive, they can request reimbursement for the miles driven on the trip. For help crafting your expense reimbursement policy, please contact your Baker McKenzie employment lawyer. And that doesn't factor in the hidden costs of training: time taken away from job duties, equipment. accountable or nonaccountable. return excess reimbursements or allowances in a reasonable amount of time. order to qualify for an accountable plan, the employers reimbursement or While state law cannot be characterized as uniform across states, below are some key components to consider when revisiting any such obligation under these state laws. BYOD, or bring your own device, policies are becoming more common in work environments. Our unparalleled expertise is coupled with an ability to provide a single point of contact for full-service, seamless employment support. 2000-2023 Neil Klingshirn. The contractor can then deduct business expenses on their own tax return. Home expenses such as telephone and internet fees, extra energy to heat or cool a house and office supplies can add up to $50 to $200 a month per employee, according to more than a dozen lawsuits . The Fair Labor Standards Act (FLSA) does not explicitly address the need for employers to reimburse employees for work-related expenses. Common business taxes. These expenses can include fuel costs, maintenance. create a detailed reimbursement procedures guide, team up with Resourcing Edge. 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. ], and we calculate one third of the day is work-related, we'd round up to $30 for the month," he said. United States, New York State, and New York City governments, including any office, department, independent agency, authority, institution, association, society, or other body of the state, including the legislature and the judiciary. The process for 0000001229 00000 n Please confirm that you want to proceed with deleting bookmark. And in other states still, employers are obligated by statute only to reimburse for losses suffered that fall outside of ordinary risks of the business in which he is employed. Law Salaries & Employee Benefits Reimbursement for Travel & Moving Expenses Upon Transfer, Reassignment or Promotion New York State Finance Law Sec. 0000020281 00000 n A well-drafted expense reimbursement policy will: (a) manage expectations about which business-related expenses may be reimbursed; (b) establish procedures employees must follow to be reimbursed; (c) set reasonable cost controls on employee business expenses; and (d) ensure that business expenses are appropriate. By: Tiffany H. Rouhi. Illinois was the newest addition this year. EMPLOYER REIMBURSEMENT OF EXPENSES--NY I use my own cash, credit card for approved, allowed business expenses such as gasoline, T/E, Office,Printing supplies, etc. } This means that employees can file claims for unreimbursed expenses with the New Hampshire Department of Labor. Section 202 Reimbursement for Travel and Moving Expenses Upon Transfer, Reassignment or Promotion, Find the latest news and members-only resources that can help employers navigate in an uncertain economy. New York will continue to allow you to exclude qualified moving expenses reimbursement and moving expenses from your NYAGI. If an employee fails to properly substantiate Stay tuned for more on that! Do not disclose personal identifying information except to the extent necessary to Ask MEL a question. We recommend you direct state specific inquiries directly to your Seyfarth lawyer of choice. Weve been helping our New York City clients fight for their right to adequate compensation for over thirty years. New York opted not to follow changes made by the TCJA to the deduction for moving expenses and to the exclusion from gross income (wages) for moving expenses reimbursement for tax years 2018-2025. 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. 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. } NYCs Commuter Benefits Law took effect on January 1, 2016. Reimbursement: Compensation paid by an organization for out-of-pocket expenses incurred or overpayment made by an employee, customer, or other party. Please log in as a SHRM member before saving bookmarks. In Illinois, although there is similar statutory language requiring reimbursement of necessary expenditures there is additional helpful language in the law that allows employers to set parameters on how much they will contribute toward such expenses (so long as it is not de minimus). Zillow said it would reimburse its employees up to $7,500 when significant travel is required for medical procedures including abortions. By way of example, some of these states-notably California and Illinois-have strict reimbursement laws. By: Christina Jaremus, Kyle Petersen, Daniel Small, and Gena Usenheimer. Through social 0000002987 00000 n endstream endobj 189 0 obj <>/Size 162/Type/XRef>>stream Expense reimbursements can include use of . "If they don't reimburse, it's as if employees took a salary cut. There is no federal requirement to reimburse employees for business-related expenses. accountable plan, this does not disqualify other reimbursements that meet the startxref The expense reimbursement You have successfully saved this page as a bookmark. 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. At the state and local level, there are currently 10 jurisdictions that have statutes or case law specifically addressing an employers requirement to reimburse business expenses: California, Iowa, Illinois, Massachusetts, Montana, New Hampshire, North Dakota, South Dakota, District of Columbia, and Seattle, Washington. Virtual & Washington, DC | February 26-28, 2023. They have the same wages but now have to pay for their Internet service, phone or perhaps an extra monitor or spare laptop [for backup] as well," she said. %%EOF Under the Fair Labor Standards Act ("FLSA"), there is no direct expense reimbursement requirement. New York. "If that was insufficient to cover the full cost, and the employee could show that, we could reimburse at a higher rate.". Other states, including Illinois, Iowa, Montana, New Hampshire and South Dakota, have enacted laws which may require reimbursement of employee expenses, although case law in these states is not as well-developed as in California. Employees can lower their monthly expenses by using pre-tax income to pay for their commute. 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). Baker McKenzies global Employment & Compensation team of over 700 lawyers in 45 countries has been ranked Band 1 by Chambers Global for Employment law for 12 consecutive years. Through social Rely on us for all your payroll, HR, Most businesses prefer to include reimbursement amounts in the 1099 income rather than go through reimbursing expenses. If you need to manage your card, make changes to it, or have a question about a procedure related to your T-Card, check here. payment, but what about reimbursements? Whether or not you pay taxes on expense reimbursements depends on whether you use an accountable plan or nonaccountable plan. These claims are not likely to succeed," he said. Not within 30 days of submission? income, social security, Medicare, and FUTA taxes. 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. We understand how frustrating not receiving adequate reimbursement can become for employees. 778.217 Reimbursement for expenses. Build specialized knowledge and expand your influence by earning a SHRM Specialty Credential. Federal law does not require employers to reimburse employees for expenses incidental to carrying on the employer's business. to an employee regardless of whether they expect the employee to have we provide special support NY Note that the expense must be "required" in order to be reimbursable. Your company required or approved the employee to make the expense. Efforts, below, we provide a high-level summary of relevant laws policy. 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