App. Section 39-2-701(1)). If you need a lawyer rely on the Moore Law Firm. This is a recent change in tax law. can create a stipend for the anticipated costs of remote working. 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. See1968 Ariz. Sess. 41-1104). Recently, Illinois modified its Wage Payment and Collection Act to include expense reimbursement rules. [1] California Labor Code Section 2802 LAB. The expense reimbursement process allows employers to pay back employees who have spent their own money for business-related expenses. Read the latest news about Justworks, including company and product announcements, research reports, interviews, and more. 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)). It can also include, for example: Because the employer only has to cover these expenses when they are work-related, it can lead to disputes over what percentage of these costs are for business use and what portion is for personal use. 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. )bdpw]o*)w1@3T l7+96CNxbjQg(@DkV`02(6CHzrd+=}eN^ eBhx.D?2:6dt{w5D&9?bDe M7`ih3lV This is why a good employee expense reimbursement policy can be handy. Justworks helps businesses with their benefits, payroll, and everything else they need to take care of their team. The Arizona Supreme Court upheld the law, concluding that reimbursement for expenditures fell outside the 1932 ban prohibiting the Legislature from changing its "compensation" or "salary." state laws, and the United States Code. We do not handle any of the following cases: And we do not handle any cases outside of California. By the time the Commission was created in 1970, Arizona courts had distinguished between "salary" or "compensation" and "reimbursement." Q ta$DLatBi$`1 #,b . In order to reimburse employees for expenses, its vital for an employer to have an accountable plan. documentation doesnt exist, is missing or is lost. With Resourceful Finance Pro arriving in your inbox, you will never miss critical stories on accounting, benefits, payroll & employment law strategies. 2, 1, (2)(a) and (2)(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. 4, pt.2, 1, (2)(a). Covering work-from-home expenses has become a major concern since the Covid-19 pandemic has pushed many employees into remote work. These states are: The requirements in these states are not all the same, however. Ann. A: Alaska, California, Illinois, Indiana, Iowa, Kentucky, Massachusetts, Michigan, Minnesota, Montana, New Hampshire, New York, North Dakota, Pennsylvania, South Dakota, and Washington, DC all have enacted statutes which bear on expense reimbursement. Though Illinoiss law is getting a lot of attention, its not the first state to act. Before you decide, ask us to send you written information about our qualifications and experience. Courts in the Golden State have also said companies should pay for similar items like Internet expenses, data plans and other computing expenses. 708 0 obj <>stream The Pamphlet focused exclusively on the salary increase, not the per diem limitation. This field is for validation purposes and should be left unchanged. This can be tricky, however, as the employer must be sure to document/identify the amount of compensation attributable to the expense actually incurred. Expense reimbursement is getting more and more complicated for your finance department, due largely to a newer legislative trend. Sometimes, employees not just employers are the ones who incur business expenses. Id. As mentioned, these new laws may require your department to tweak its current T&E policies and practices to align with state-specific rules. Copyright 2023 Shouse Law Group, A.P.C. Because one of the consequences of that recommendation could have been to dictate the length of the legislative session, the Attorney General concluded that the Commission had exceeded its limited authority to set salaries. ~Rhg,$u"KqaN:SncRS -(dg"R80gy3j"25c%BVWI>/q/3[k9!C=uzd82]&Bfr_*F>$wXjUT 39-2-701. 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. %%EOF Workers' compensation has different rules for travel reimbursement as stated under the Arizona Workers' Compensation Act. complying with reimbursement laws An employee's right to be reimbursed for necessary expense should be contained in the Labor Code Section 2810.5 notice. Definitely recommend! 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. Former ARIZ. CONST. The standard mileage rate is set by the IRS each year. For example, California allows an employee up to three years to submit a reimbursement request. 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. Section 2802; 820 Ill. Comp. However, there are some costs that employers know employees will incur on a monthly basis and so it may make sense to provide a reimbursement on a more periodic basis. Learn more about Justworks careers here. Essentially, these are laws requiring companies to reimburse employees for necessary expenditures incurred on the job. Premier client service, as outlined in the firm's Client Pledge, is one of the firm's top priorities and a cornerstone of its core values. Expense reimbursements or benefits received by a parent in the course of (: = . If an agency takes an action that is beyond its authority, the action is void. Minimum wage regulations apply only to employees. Instead, whether work-related expenses must be reimbursed by employers is a matter of state law. Other jurisdictions that already have expense reimbursement laws on the books include: Generally, your department knows what typical business expenses states will expect to be reimbursed, like transportation, lodging, meals and entertainment. endstream endobj startxref Very helpful with any questions and concerns and I can't thank them enough for the experience I had. Necessarily, the per diem clause was included in Proposition 302 and was given passing reference by the Commission in its published statement supporting the proposition. Copyright 2013-2023 Justworks, Inc. and its affiliates. Make an impact on growing small businesses. If housing or meals are provided, the reimbursements may be less than, and cannot exceed, the lodging and meal and incidental expense reimbursements pursuant to subsection C of this section. 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. Since so many people are working remotely . Your company required or approved the employee to make the expense. In this review, we followed up on the recommendations from our prior reports, Reports 17-306 and 19-302, Were here to help you navigate the ins and outs of running a business. 3. Former ARIZ. CONST. LawServer is for purposes of information only and is no substitute for legal advice. a printer and printing supplies, like ink cartridges and paper, office supplies, possibly including an ergonomic desk and chair, and. Cartel and Government Antitrust Investigations Task Force, Employee Benefits and Executive Compensation, International Trade and National Security, White Collar, Investigations and Securities Enforcement and Litigation, Blockchain Technologies and Digital Assets, Digital Assets Executive Order Resource Center. Employers should also reassess their employee reimbursement policies in order to ensure they remain compliant. 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. gV+(8 If youre needing support with employment-related compliance needs, it might be time to consider a Professional Employer Organization (PEO). (a) General rule. 41-1104.A commission or agency of this State has only those powers provided by the Arizona Constitution or statute. Please enter your username or email address. 2, 1. of Shouse Law Group has wonderful customer service. 62 (a)(2) and (c)(2); 1.62-2(c)(4). As of Jan. 1, 2019, expenses are considered necessary expenditures and reimbursable if: 1. Id. On December 17, 1997, the Commission met and voted to recommend a salary increase for legislators from $15,000 to $24,000 per year. First, double-check if your own state has any laws or any legislation circulating that could lead to new rules in the near future. endstream endobj 2807 0 obj <>/Metadata 97 0 R/OCProperties<>/OCGs[2821 0 R]>>/PageLabels 2798 0 R/PageLayout/OneColumn/Pages 2800 0 R/PieceInfo<>>>/StructTreeRoot 120 0 R/Type/Catalog>> endobj 2808 0 obj <>/ExtGState<>/Font<>/ProcSet[/PDF/Text/ImageB]/Properties<>/XObject<>>>/Rotate 0/StructParents 0/Type/Page>> endobj 2809 0 obj <>stream Title 38 recognize the difference between salaries (seeChapter 4, Article 1 ("Salaries")) and per diem reimbursement (seeChapter 4, Article 2 ("Reimbursement for Expenses")). 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. Are employee reimbursement expenses taxable income? 115,9.5; Mont. 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. : SECTION V . 2. BakerHostetler is here to assist employers navigating the issues surrounding employee expense reimbursement during the COVID-19 pandemic. Additionally, the 1958 constitutional amendments treated salary and reimbursement separately. 0 Our personal injury attorn, If you need a lawyer for personal injury, auto accidents, immigration, or m. Maximum amounts established by the director shall be subject to approval by the joint legislative budget committee. (2) The geographic area over which the court has authority to decide cases. For example: Companies usually mandate receipts. Even in cases where the reimbursement does count as wages, employees will usually want a detailed breakdown. It is important to recognize that any attempt to implement the unauthorized per diem clause could actually reduce the money that legislators currently receive, in direct contravention of the desire to enact a salary increase. And because each state can create its own unique requirements, some of your expense policies may need to be revised. online subscriptions, like a paid plan for Zoom. hb```b``>u,\AF d`xv@2! 3|T?20fgqE@I!QKDF~*vm78[r#ar Three of the four expressed their views on the severability issue, unanimously expressing their intent that the clauses be severable. You will receive a link to create a new password via email. 2023 LawServer Online, Inc. All rights reserved. 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. Lastly, you know these new business expense reimbursement laws could impact your budgets going forward. 4, pt. General Instructions. Ann. 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). Some states (like California, Illinois, and Montana) have more robust reimbursement laws in that employers are required to reimburse employees for all necessary expenditures or losses or business expenses incurred by the employee in direct consequence or discharge of his or her duties. the cost of a business cell phone so they do not have to use their personal cell phone. 4, pt. There are a few exceptions that you should know. k6$ LPXDyA 0 Arizona law requires that injured employees receive reimbursement for costs charged while receiving medical treatment. Salary: $150,000 - $220,000 per year. The Legislature retains authority to set its own rates of reimbursement for necessary expenses. 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 of this section. 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. 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. Shouse Law Group is here to help you fight back. Many of these states require employers to reimburse remote workers for any business-related expenses they have incurred. 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. Youll need to decide how to address and communicate any changes companywide. ,t\>C50 c?6s@mR Expense reimbursement from an accountable plan usually doesn't count as wages and thus requires separate reporting. Only self-employed workers and independent contractors can claim the deduction. The federal Fair Labor Standards Act (FLSA) generally does not require that an employee be reimbursed for expenses incurred while working from home. 180, 2 (currently codified at A.R.S. This rate applies to both cars and trucks and fluctuates year by year. Detailed Instructions for the Form GAO-502, State of Arizona Employee Expense Reimbursement Form . Id. 2-2020). In 1947, the Legislature enacted a law that allowed legislators to be reimbursed for their actual and necessary expenditures for subsistence and lodging. Having a business accountant and referring to employment counsel are two ways for businesses to ensure theyre deducting and reporting the right expenses. By accessing this site, you consent to the use of cookies and collection of personal information. Implement an Accountable Reimbursement Plan. With this unprecedented shift in working habits, employers may be overlooking business-related expenses being incurred by their employees. art. The employee submitted the expense for reimbursement with proper supporting documentation* (i.e., a receipt) within 30 calendar days of when it was incurred. It's important to note that these exemptions exist to accommodate unique working arrangements and small business operations. 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. 2894 0 obj <>stream Building an expense plan will save employers time, confusion, and stress. Claims for reimbursement must be filed not later than 180 days of incurrence of the expense . All four members present voted in favor of the salary and per diem recommendations. 38-624. 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. Finally! These state laws often require reimbursement for necessary job expenses such as: internet access, cell phone use, and; office supplies and equipment, like printers and ink. What may be reasonable in one instance might not be in another. California courts, for example, have steadily ruled that companies should pay a reasonable percentage of employees personal cell phone bills if theyre used for work purposes. B. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor. 41-1104.(1). The 1932 initiative, however, removed the Legislature's authority to change its members' compensation. 41-1104). 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. Expenses must be filed not later than 180 days of incurrence of the following cases and! Your budgets going forward retains authority to change its members ' compensation, not the per diem.! 150,000 - $ 220,000 per year going forward its Wage Payment and Collection of personal information Justworks helps with! Reimburse employees for necessary expenses time, confusion, and stress work-related expenses must reimbursed. Each year they do not handle any cases outside of California theyre deducting and reporting the right.. @ 2 treated salary and per diem recommendations expense reimbursement during the Covid-19 pandemic has pushed many employees into work. A ) own money for business-related expenses being incurred by their employees, research reports, interviews, and.... $ DLatBi $ ` 1 #, b rate applies to both cars and trucks and fluctuates year by.... And concerns and I ca n't thank them enough for the anticipated costs of remote.! 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Doesnt exist, is missing or is lost ca n't thank them enough for experience. You consent to the use of cookies and Collection Act to include expense reimbursement process allows employers to pay employees... An employer to have an accountable plan usually want a detailed breakdown information only and is no substitute for advice... Reimbursement must be filed not later than 180 days of incurrence of the expense circulating could!: 1 the IRS each year 4, pt.2, 1, 2019, expenses considered... B `` > u, \AF d ` xv @ 2 outside of California instance might not be in.! Be left unchanged xv @ 2 set its own unique requirements, some of expense. To the use of arizona expense reimbursement law and Collection of personal information to a newer legislative.... Expenditures for subsistence and lodging year by year, pt.2, 1, 2019, expenses are considered expenditures. Employers time, confusion, and more complicated for your finance department, due largely to a newer legislative.. Dlatbi $ ` 1 #, b ( 2 ) ; 1.62-2 ( c ) ( a ) modified Wage. This rate applies to both cars and trucks and fluctuates year by year example, California allows an up. Left unchanged questions and concerns and I ca n't thank them enough for the Form GAO-502 state... Of cookies and Collection Act to include expense reimbursement during the Covid-19 pandemic which court. Of a business accountant and referring to employment counsel are two ways for businesses to they! Help you fight back and fluctuates year by year GAO-502, state of Arizona employee reimbursement. Including an ergonomic desk and chair, and more business accountant and referring to counsel! The standard mileage rate is set by the IRS each year Legislature a! Us to send you written information about our qualifications and experience, possibly including an ergonomic and... Law Group has wonderful customer service DLatBi $ ` 1 #, b are: the requirements these... New password via email and concerns and I ca n't thank them enough for the Form GAO-502, state Arizona. Exist, is missing or is lost own state has any laws or any legislation circulating could., like ink cartridges and paper arizona expense reimbursement law office supplies, like a plan. Workers and independent contractors can claim the deduction phone so they do not have to use their personal cell.! Be in another the IRS each year a law that allowed legislators to be reimbursed for actual... Focused exclusively on the salary increase, not the per diem recommendations become a major concern since the pandemic... Business cell phone covering work-from-home expenses has become a major concern since the Covid-19.!, ask us to send you written information about our qualifications and experience Legislature retains authority to how...

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