For example: Companies usually mandate receipts. 41-1104.A commission or agency of this State has only those powers provided by the Arizona Constitution or statute. 2894 0 obj <>stream If the employer fails to pay these reimbursements, the employee can file a wage and hour lawsuit. Courts in the Golden State have also said companies should pay for similar items like Internet expenses, data plans and other computing expenses. 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. The employee also must submit business expenses within a reasonable period of time after they occurred. Its also a good idea to make sure others involved in T&E (your A/P staffers, expense report approvers, etc.) Learn more about Justworks careers here. 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. All claims for reimbursement shall be accompanied by lodging expense receipts. Thats where employee expense reimbursement comes in. Consequently, legislators should be paid per diem using the rates in effect for legislators prior to the passage of Proposition 302; that is, using A.R.S. A bit about us: One of the largest labor and employment law firms representing management in all types of employment-related legal matters. Please complete the form below and we will contact you momentarily. When employees receive an expense reimbursement, typically they wont be required to report such payments as wages or income. 14-10709 Reimbursement of expenses Universal Citation: AZ Rev Stat 14-10709 (2016) 14-10709. 25-320) and federal law (42 United States Code, 651 et seq., 45 Code of Federal Regulations, 302.56) and amendments, if any. However, some states, such as California and Illinois, do require these reimbursements. Youll want to proactively account for these business expenses in your T&E budget to stay on track financially and prevent issues. 'H"2Hd) ~ K(7e[4;'^|IMw!o*m5{wp!s( `*wM9nrXnI7}@PBYr fBw. 2. The Commission also recommended that per diem paid to legislators be commensurate with that provided for non-elective state employees. If an agency takes an action that is beyond its authority, the action is void. Detailed Instructions for the Form GAO-502, State of Arizona Employee Expense Reimbursement Form . On December 17, 1997, the Commission met and voted to recommend a salary increase for legislators from $15,000 to $24,000 per year. This field is for validation purposes and should be left unchanged. Resourceful Finance Pro, part of the SuccessFuel Network, provides the latest Finance and employment law news for Finance professionals in the trenches of small-to-medium-sized businesses. The other party is behind in child support, spousal maintenance, and/or medical expense reimbursement payments at least one full month, OR. Id. There is no federal law that requires employers to reimburse their employees for employment-related expenses, and few state laws do so, either. reimbursement obligations employers might not have had to think about before COVID-19. statement regarding the expense instead of a receipt if supporting An ordinary expense is one that is common and accepted in your industry. office supplies and equipment, like printers and ink. 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. Make an impact on growing small businesses. The Commission's recommendations became ballot Proposition 302, which the voters passed in November 1998. 41-1104). This distinction between salary and per diem reimbursement is not unique. 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).). Employees who have had to set up their own workspace at home are not able to claim the home office deduction. 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. Often, an employer will be able to deduct those reimbursements, but the deduction amount may be limited. 2. A. This is why a good employee expense reimbursement policy can be handy. App. 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. pO}]3 s,i25A7.c. Magma Copper Co. v. Arizona State Tax Comm'n, 67 Ariz. 77, 86-87, 191 P.2d 169, 175 (1948). If the employer does not have an accountable plan, then any reimbursements, even those that are ordinary and necessary, are taxable income. 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. . Having a business accountant and referring to employment counsel are two ways for businesses to ensure theyre deducting and reporting the right expenses. endstream endobj startxref 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. In California, employees are entitled to reimbursement for all of their reasonable financial losses that come from doing their job.[11]. C. 5, 12. Expense reimbursement laws. Before you decide, ask us to send you written information about our qualifications and experience. 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)). endstream endobj 929 0 obj <>>>/Filter/Standard/Length 128/O(5 V:D&zzAo;d$c5)/P -1052/R 4/StmF/StdCF/StrF/StdCF/U("5YiI4 )/V 4>> endobj 930 0 obj <>/Metadata 22 0 R/Names 951 0 R/PageLayout/OneColumn/Pages 926 0 R/Perms/n]KBDw)/Name(cCY]!5@X3U@Y}5FT\(_y)/Prop_Build<>/Filter<>/PubSec<>>>/Reference[<>/Type/SigRef>>]/SubFilter/adbe.pkcs7.detached/Type/Sig>>>>/StructTreeRoot 34 0 R/Type/Catalog>> endobj 931 0 obj <>stream 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. 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. This Office reached a similar conclusion in 1980. 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. Former ARIZ. CONST. BakerHostetler is here to assist employers navigating the issues surrounding employee expense reimbursement during the COVID-19 pandemic. 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. For example, California companies required to pay for employees cell phone bills now need to allot for this massive expenditure. Make sure that you understand and follow the applicable laws in the states where you have employees. Implement an Accountable Reimbursement Plan. art. Psst interested in learning more about creating an accountable expense plan? In particular, you asked whether legislators should be paid per diem reimbursement using the rate for non-elected state employees set forth in the Department of Administration's Arizona Accounting Manual or the rate for legislators set forth in A.R.S. Our compliance support can help you navigate the unknown and comply with employment regulations. This will help combat employees sitting on reimbursement requests for months or years, but ultimately the deadline to submit a reimbursement request will depend on state specific laws where they exist. Know any companies that could benefit from seamless payroll, access to affordable benefits, and HR support? 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. Expense reimbursements or benefits received by a parent in the course of (: = . %%EOF In 1947, the Legislature enacted a law that allowed legislators to be reimbursed for their actual and necessary expenditures for subsistence and lodging. Companies in California are notorious for trampling on the rights of workers. Even with an accountable plan, there are some things to look out for. This can be tricky, however, as the employer must be sure to document/identify the amount of compensation attributable to the expense actually incurred. art. Minimum wage regulations apply only to employees. In addition, if any expenses are paid in excess of IRS limitations, then the excess is taxable income. Former ARIZ. CONST. What are some examples of ordinary and necessary expenses that would require employer reimbursement? Those expenses can further get defined as expenses . 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 )bdpw]o*)w1@3T l7+96CNxbjQg(@DkV`02(6CHzrd+=}eN^ eBhx.D?2:6dt{w5D&9?bDe M7`ih3lV Code. When employees receive an expense reimbursement, typically they won't be required to report such payments as wages or income. Your company required or approved the employee to make the expense. : SECTION V . 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. While the voters were given the recommendation as a whole, the Publicity Pamphlet demonstrates that the salary increase was the overriding consideration. Claims for reimbursement must be filed not later than 180 days of incurrence of the expense . 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