41-1104). Sign up for our free summaries and get the latest delivered directly to you. Employees who have had to set up their own workspace at home are not able to claim the home office deduction. 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. If the requested file does not load in a new window, click here. Proposition 302 had its origins with the Commission. Ariz. Rev. Courts in the Golden State have also said companies should pay for similar items like Internet expenses, data plans and other computing expenses. Remote work is quickly becoming a staple for the modern workforce. ARIZ. CONST. Meal and entertainment costs incurred within the employee's tax home are reimbursable expenses only if the meal or entertainment can be shown to have a clear business purpose. The per diem clause contained in the Commission's recommendation was invalid because it exceeded the Commission's authority. The commissioners were the architects of the language and intended that the salary increase be allowed to stand even if the per diem clause were invalid. Please complete the form below and we will contact you momentarily. Instead, whether work-related expenses must be reimbursed by employers is a matter of state law. Maximum amounts established by the director shall be subject to approval by the joint legislative budget committee. 41-1104. Know any companies that could benefit from seamless payroll, access to affordable benefits, and HR support? Reimbursement for travel expenses in the State of Arizona applies only to public employees and officers, public institution employees, board members, or any other agency of the state. How do you qualify? Former ARIZ. CONST. ~Rhg,$u"KqaN:SncRS -(dg"R80gy3j"25c%BVWI>/q/3[k9!C=uzd82]&Bfr_*F>$wXjUT A. If the employer fails to pay these reimbursements, the employee can file a wage and hour lawsuit. An expense does not have to be indispensable to be considered necessary.. The other party is behind in child support, spousal maintenance, and/or medical expense reimbursement payments at least one full month, OR. 1= ( SeeA.R.S. Make sure that you understand and follow the applicable laws in the states where you have employees. With this unprecedented shift in working habits, employers may be overlooking business-related expenses being incurred by their employees. For example, California companies required to pay for employees cell phone bills now need to allot for this massive expenditure. It should be noted that what constitutes reasonable is a fact specific exercise and that employers should approach each employee reimbursement request as such. Former ARIZ. CONST. You can explore additional available newsletters here. 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. hb```b``>u,\AF d`xv@2! 3|T?20fgqE@I!QKDF~*vm78[r#ar Expenses incurred by employees in the course of business should be costs incurred by the employer, not by its employees. 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. The arguments did not mention the per diem clause. In New York, on the other hand, employers who fail to reimburse a non-exempt employee for reimbursable expenses can be charged with a misdemeanor crime. [3] 820 Illinois Compiled Statute 115/9.5. Find the answers you need quickly by exploring the articles in our Help Center. 26 U.S.C. Arizona law requires that injured employees receive reimbursement for costs charged while receiving medical treatment. *Note: Illinois says the employee can offer a signed Lodging expenses; meal and incidental expense reimbursement and long-term subsistence allowance; items covered by reimbursement; amount predetermined by department of administration. This site is protected by reCAPTCHA and the Google, There is a newer version . On January 6, 1999, you requested a formal legal opinion on the effect of the payment provisions in Proposition 302. For almost thirty years following the creation of the Commission, the Legislature continued to set its own reimbursement rates. If you need a lawyer rely on the Moore Law Firm. Maximum amounts established by the director shall be subject to approval by the joint legislative budget committee. Check out our online talks on topics that matter most when protecting your business and taking care of your team. App. Salary: $150,000 - $220,000 per year. Laws ch. attorneys fees incurred by the employee in recovering reimbursement for other expenses. The only time that the FLSA impacts work-from-home reimbursements is if the cost would lower the employees earnings beneath the applicable minimum wage. 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 of this section. 1130 0 obj <>stream These states are: The requirements in these states are not all the same, however. They shall also receive mileage one way, by the shortest practicable route, at the rate of twenty cents per mile." Under the 2005 Code the educator's expense deduction was scheduled to expire on December 31, 2005, as discussed in TIRs 05 . However, a key to maintaining any accountable plan is to properly and timely substantiate expenses. 25-320) and federal law (42 United States Code, 651 et seq., 45 Code of Federal Regulations, 302.56) and amendments, if any. ." Title 38 recognize the difference between salaries (seeChapter 4, Article 1 ("Salaries")) and per diem reimbursement (seeChapter 4, Article 2 ("Reimbursement for Expenses")). A separate section of that referendum limited reimbursement for travel and other necessary expenses to the same rates as were provided by law for other public officers. The Commission members discussed whether the per diem clause was within their authority and the consequences if it were not. To comply with state law (Arizona Revised Statutes (A.R.S. 4, pt. Shouse Law Group has wonderful customer service. h233Q0Pw/+Q0L)63 )I0i1P *V? U? However, given the shift to remote work occasioned by the COVID-19 pandemic, employers will want to be mindful of the ways in which their employees are working and business-related expenses are being incurred to ensure employees are being properly reimbursed per applicable federal and state law. All rights reserved. As states continue to address expense reimbursement in See Earhart v. Frohmiller, 65 Ariz. 221, 178 P.2d 436 (1947). Magma Copper Co. v. Arizona State Tax Comm'n, 67 Ariz. 77, 86-87, 191 P.2d 169, 175 (1948). 0 Join Justworks partners to get access to free HR tools, resources, and savings that will allow you to offer your clients more. hUn09imc8.=(2%C}"S6dR7@@*8k07\H05`kH? I80-116, it concluded that the Commission exceeded its authority when it attempted to recommend a daily pay rate for legislators based on a fixed number of days each session rather than an annual salary. The most common are work-related supplies, travel, meals, and entertainment. Youll need to decide how to address and communicate any changes companywide. Rather than simply regurgitating the day's headlines, Resourceful Finance Pro delivers actionable insights, helping Finance execs understand what Finance trends mean to their business. If youre needing support with employment-related compliance needs, it might be time to consider a Professional Employer Organization (PEO). F 1986); 26 U.S.C. This reimbursement law was challenged as being an increase in compensation in violation of the Constitution. I'm interested in receiving information about Justworks. You already receive all suggested Justia Opinion Summary Newsletters. They were so pleasant and knowledgeable when I contacted them. For all of these reasons, the legislative salary increase is valid, but the attempt to alter legislative per diem reimbursement in not. 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. However, because of the new normal of working from home, employers must vigilantly analyze the types of expenses their employees are incurring for business-related purposes and provide reimbursement accordingly. C. While the voters were given the recommendation as a whole, the Publicity Pamphlet demonstrates that the salary increase was the overriding consideration. 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. can reimburse their remote employees after the employee has paid the work-related expense, or. 4, pt.2, 1, (2)(a). 'H"2Hd) ~ K(7e[4;'^|IMw!o*m5{wp!s( `*wM9nrXnI7}@PBYr fBw. Enter your username and password below to log in. Since so many people are working remotely . office supplies and equipment, like printers and ink. 38-624. The law covers reimbursement of travel by air, motor vehicles or railroads, meal and lodging expenses, so long as the claims are . 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. 3. 2, 22. General Instructions. 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. A: An employer is likely not responsible for the entire personal cell phone bill of an employee simply because that employee uses his/her personal cell phone for work purposes. Several times in this decade legislative leaders received annual per diem amounts in excess of $9,000, the amount of the voter-approved salary increase, because of the heavy demands on their time. 2, 1, (2)(a) and (2)(b). 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. Get to know our founding story and meet the Justworks Leadership Team. By accessing this site, you consent to the use of cookies and collection of personal information. 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).). B. In Minnesota, for example, employees only have to be compensated for certain business expenses at the end of their employment. For example, employees may now (and for the foreseeable future) be incurring expenses related to printer paper, pencils, pens, cell phone expenses, home internet bills, etc. Copyright 2013-2023 Justworks, Inc. and its affiliates. 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. of hbbd``b` In 1958, the Legislature placed on the ballot, and the people approved, an amendment to the Arizona Constitution that provided for an annual legislative "salary of one thousand eight hundred dollars as compensation for services . Most businesses reimburse such expenses, but are business expense reimbursements taxable income to the employee? 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. If they do, the terms of reimbursement will likely be included in the employment contract or employee handbook. 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. A necessary expense is one that is helpful and appropriate for your trade or business. Arizona Revised Statutes Title 23. Please note: Our firm only handles criminal and DUI cases, and only in California. Download your free copy of Business Expenses: A Beginner's Guide To Building A Plan to find the helpful advice you're looking for. 2894 0 obj <>stream This can be tricky, however, as the employer must be sure to document/identify the amount of compensation attributable to the expense actually incurred. QhK A: With employees having historically worked in an office environment, many of the supplies and resources they utilized to complete their job duties were provided for by the employer (i.e., printer paper, pens/pencils, computers, electricity, computer monitors, internet, phones, etc.) . 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. 115,9.5; Mont. But if you work in Illinois, state law now says employees can provide a signed statement if they lose a receipt. 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. Please enter your username or email address. 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. Before you decide, ask us to send you written information about our qualifications and experience. Our company values are reflected in our product and in our team. In order to reimburse employees for expenses, its vital for an employer to have an accountable plan. [1] California Labor Code Section 2802 LAB. 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. Child support, spousal maintenance, and/or medical expense reimbursement in See Earhart v. Frohmiller, 65 Ariz.,. Must be reimbursed by employers is a fact specific exercise and that employers approach! 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