Work with a Professional Employer Organization such as Resourcing Edge to ensure compliance with applicable laws and develop an accountable expense plan to help maximize tax benefits. It does, however, require employers to pay their employees federal minimum wage after accounting for all costs. NYCs Commuter Benefits Law took effect on January 1, 2016. %PDF-1.7 % Businesses 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. By: Tiffany H. Rouhi. The employee submitted the expense for reimbursement with proper supporting documentation * (i.e., a receipt) within 30 calendar days of when it was incurred. Work with the HR experts at Resourcing Edge to help you create accountable reimbursement policies and add them to the employee handbook. When travel questions arise, the traveler and supervisor should work with the Agencys Finance Office and consider information in published travel guidance (e.g., agency travel policies, OSC Travel Manual, Chapter XIII of the GFO, etc.). The information on MEL is not legal advice, but general information related to legal issues commonly encountered. In the area of professional service recruitment, institutions of higher education have traditionally recruited on a national basis. var temp_style = document.createElement('style'); 0000008220 00000 n To Employee expenses reimbursed through the Travel and Expense module include travel expenses, claims for damages, and other employee reimbursements. 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. The types of expenses Whether or not you pay taxes on expense reimbursements depends on whether you use an accountable plan or nonaccountable plan. "If that was insufficient to cover the full cost, and the employee could show that, we could reimburse at a higher rate.". depending on whether you have an accountable or nonaccountable plan. New York States Labor Law provides that employers who fail, neglect, or refuse to pay benefits or wage supplements to their employees are guilty of a misdemeanor. 0000002481 00000 n The common practice that is evolving is to provide a flat monthly stipend and inform employees in writing that employees may submit expense reimbursement requests to the extent that the stipend does not otherwise cover their business internet and cell phone usage. SHRM Employment Law & Compliance Conference. on the employees Form W-2 and deductible by the employer as employee Tell us more about you to receive content related to your area or interests. Please confirm that you want to proceed with deleting bookmark. Montana's employee business expense reimbursement law is similar to that of California's and Illinois'. Also, we advise that employers maintain documentation to support the reasonableness of the stipend that they establish, in case the amount of the stipend is ever attacked as being too little (such that it does not cover an employers full reimbursement obligation) or too much (such that the excess should be treated as compensation for work rather than reimbursement). New York State reimburses employees for business use of a personal vehicle based on the standard mileage allowance established by the Internal Revenue Service (IRS) and the U.S. General Services Administration (GSA). When the economy is unstable, employers are faced with difficult decisions around staffing, pay and benefits. It is also an opportunity to create a policy that outlines procedures and sets clear expectations. The contractor can then deduct business expenses on their own tax return. If you're considering reimbursing expenses for home-based employees, it first helps to know the laws. MEL is a service of Neil Klingshirn, Board Certified Employment Law Specialist, serving clients in Akron, Canton, Cambridge, Cleveland, Columbus, Lorain, Marietta, Youngstown and Wooster, Ohio. "If the employee's Internet bill is $90 a month [for Internet use only, not TV, DVR, phone, etc. Reimbursement of business expenses, insurance . 0000000016 00000 n Use this small business expense reimbursement policy guide to create accountable plans and a policy that can reduce your tax burden while encouraging employee compliance. compensation. For help crafting your expense reimbursement policy, please contact your Baker McKenzie employment lawyer. Plaintiffs' attorneys have been pushing the boundaries of . 2023 Lipsky Lowe LLP | Phone: 212-392-4772 Your policy should be part of, or referenced in, your telecommuting policy. There could also be some tools and equipment that the employer can provide in a more cost-effective manner if it purchases them directly. Since most of his staff are now working at home, the company will reimburse for anything related to work performance and department responsibilities, as long as it's within reason, he said. seems simple enough an employee pays for a business expense out of pocket, and Employers, of course, want to ensure employees working from home have a workspace that is safe and productive. properly substantiate expenses in a reasonable amount of time. Preferred suppliers for However, several states (including California, the District of Columbia, Illinois, Iowa, Massachusetts, Montana and New York) have specific state law requirements applicable to employee expense reimbursements. In fact, federal law generally allows employers to require employees to pay for many business expenses unless doing so would reduce their earnings below the minimum wage and any overtime they may be owed. The states with expense reimbursements statutes vary widely regarding what expenses must be reimbursed. In California, when employees must use their personal cell phones for work-related calls, employers must pay some reasonable percentage of those phone bills even if employees incurred no extra expenses using their cell phone for work. endstream endobj 163 0 obj <>/Metadata 31 0 R/AcroForm 164 0 R/PieceInfo<>>>/Pages 30 0 R/PageLayout/OneColumn/OCProperties<>/OCGs[165 0 R]>>/StructTreeRoot 33 0 R/Type/Catalog/LastModified(D:20100714110952)/PageLabels 28 0 R>> endobj 164 0 obj <>/Encoding<>>>>> endobj 165 0 obj <. policy should include the following: Employees For more information: www.bakermckenzie.com, Reimbursement Refresher: Cell Phone and Internet Expenses Related to Telecommuting in the US, Why Insurers May Worry About New York City's New Salary Transparency Law, Navigating the New Rules Regarding Company Profit Sharing Payments In Mexico (Video Chat), AI in Recruitment and Hiring: Checking Your Blind Spots, Avoiding Discrimination Lawsuits Following Layoffs, Best Practices for Tracking Proof of Employee Vaccinations, Changes in the Workplace Now That We Have COVID-19Vaccines, Charged Speech in the Workplace: Knowing When to Step In, Cost-Cutting Considerations in the Workforce Without Layoffs, COVID-19 Corporate Travel Considerations Going and Coming Back, COVID-19: It's Not Over Until It's Over, Employers, Diversity, Equity & Inclusion | Best Practices for Managing & Collecting Employee Diversity Data, Employer WARN-ing: Notice Requirements to Know Before Layoffs, Employers: All Eyes on Salary and Pay Range Disclosure in US Job Postings, Extended Summer Travel in the Era of Remote Work, Guidelines for Accommodating Sincerely Held Religious Beliefs and Disabilities for Employers Mandating Vaccinations, How Employment Counsel Add Value to a Company's Inclusion & Diversity Programs, Key Considerations in High Profile Investigations, Labor Unions and the Workforce: Whats Trending and How to Get Out in Front, Mandatory Vaccinations in the Workplace 2.0: Spring 2021 Update, Masks Off? (whoever is responsible for reimbursement to acknowledge receipt at the time you deliver your next request for reimbursement). document.head.append(temp_style); You may be trying to access this site from a secured browser on the server. accountable or nonaccountable. 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. According to the IRS, employees must now include moving expense reimbursements in employees wages, except for certain members of the Armed Forces. The employee fails to The process for Given this, when crafting a nationwide policy, sometimes its simplest to use California as the high water mark. SETTING UP A COMMUTER BENEFITS PROGRAM, http://web.mta.info/nyct/fare/rfindex.htm, IRS Employers Tax Guide to Fringe Benefits, http://www.publictransportation.org/tools/carbonsavings/Pages/default.aspx. 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. See Cochran v. Schwans Home Serv., Inc. been paid as wages. $('.container-footer').first().hide(); Original Source: BYOD, or bring your own device, policies are becoming more common in work environments. . When Should Employers Reimburse Expenses for Remote Workers? You must have JavaScript enabled to use this form. for employees to submit expenses. Reimbursements are most common when employees travel for work. order to qualify for an accountable plan, the employers reimbursement or Some, particularly in tech, may be working from home through the end of the year, or even permanently! 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. This serves several purposes. Here at LaborLawCenter our Compliance Experts are constantly working to stay on top of the many compliance changes so you don't have to. Illinois was the newest addition this year. If an employer misrepresented job, do I have to pay back moving costs? Section 202 Reimbursement for Travel and Moving Expenses Upon Transfer, Reassignment or Promotion, Trust said that most employers, including Sungevity, are reimbursing cellphone and Internet expenses on a proportional basis. NYC's Commuter Benefits Law took effect on January 1, 2016. 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. 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. Illinois Expense Reimbursement Law. Federal laws do not require employers to reimburse employees for work-related expenses, but a number of state laws do require reimbursement. var currentLocation = getCookie("SHRM_Core_CurrentUser_LocationID"); income. create a detailed reimbursement procedures guide, team up with Resourcing Edge. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRMs permission. if(currentUrl.indexOf("/about-shrm/pages/shrm-china.aspx") > -1) { This includes: Federal, State, County, City, Village, Town, School district, or certain quasi-government agencies. The employee can also ask the Labor Commissioner to cite the employer or anyone acting on the employers behalf under Labor Code Section 2802(d). Non-teaching employees of school districts are subject to the NYS Minimum The cost of providing employee-requested copies of employment records. Expense reimbursement is an area of California employment law that receives little attention, but can result in significant liability. 0000004273 00000 n Keep in mind that if one employee fails to meet the requirements of the Download Vendor Claim for Payment (AC3253-S) This form can be used to submit multiple payments for a single vendor. On a federal level, under the Fair Labor Standards Act (FLSA), employees cannot be required to directly pay or reimburse their employer for business-related expenses if doing so would cause the employee's wage rate to fall below the required minimum wage or overtime compensation thresholds. The federal minimum wage is currently $7.25 an hour. Employees of public agencies are usually covered by the Federal Minimum Wage. EMPLOYEES COVERED/NOT COVERED BY THE LAW, V. TRANSIT COVERED/NOT COVERED BY THE LAW, VI. There is no federal requirement to reimburse employees for business-related expenses. Exception: If the employer has 20 or more full-time employees who are not covered by the CBA, the employer must offer these employees commuter benefits. The FTCs Proposed Rule on Non-Competes: What Employers Need to Know, The Proliferation of Pay Transparency Laws: What US Employers Need to Know, Tying Compensation to Furthering Inclusion and Diversity Goals, US, UK and EU Whistleblower Developments for Multinational Employers. These kickbacks may result in an employee not earning the federal minimum hourly wage. My Company Requires Employees Sign Non-competes. A common approach is to provide a fixed monthly stipend based on a good faith and reasonable estimate of an employees reimbursable expenses. It seems straightforward enough that only those expenses actually incurred must be reimbursed, but this question is not always so simple. 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. And that doesn't factor in the hidden costs of training: time taken away from job duties, equipment. Through social ,@%+e[ b` rM@@x N8 The Tax Cuts and Jobs Act, passedin December 2017, eliminated the federal income tax deduction for most unreimbursed employee expenses for 2018 through 2025. 10170 Some employees might prefer to print out documents, but does the job actually require it? By way of example, some of these states-notably California and Illinois-have strict reimbursement laws. Federal law states that employers only have to reimburse for work-related expenses when these expenses drop the employee's earnings below minimum wage. accountable plan amounts arent considered wages, they arent subject to The wage deduction results in an employee receiving an hourly pay rate that is less than the federal minimum wage. In California, for example, the statutory language requires employers to reimburse for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of the employees duties or at the direction of the employer. Illinois, for example, requires employers to reimburse employees for all necessary expenditures incurred by the employee within the employees scope of employment and directly related to services performed by the employer.. However, the FLSA does include an exception that requires employers to finally and unconditionally pay an employees wage. However, several states (including California, the District of Columbia, Illinois, Iowa, Massachusetts, Montana and New York) have specific state law requirements applicable to employee expense reimbursements. The answer likely depends on where the employee is located. See IRS Publication 535 to learn more about business expenses. Under California law, an employer that does not reimburse employees risks a lawsuit where the damages will include not just the unreimbursed expenses but the attorneys fees incurred by the employee seeking reimbursement. Please purchase a SHRM membership before saving bookmarks. Should We Panic Due To The FTCs Proposed Rule? treated as supplemental wages and subject to taxes. Many months later, the majority are still working at home and could be well into next year, if not permanently. Virtual & Washington, DC | February 26-28, 2023. 0000004318 00000 n Mileage rates Mileage rates are based on the standard mileage allowance established by the Internal Revenue Service. Recent research offers a warning to employers about implementing return-to-office policies: Nearly 7 in 10 employees (68 percent) said they would rather look for a new job than return to the . Under Please log in as a SHRM member before saving bookmarks. As a result of the Tax Cuts and Jobs Act of 2017, you can no longer reimburse employees moving expenses. $("span.current-site").html("SHRM MENA "); Now let us go beyond your example and apply the same methodology to the next week, in which the same employee services the same customers who once again are charged $2000. new Tax Cut and Jobs Act, effective for 2018 through 2025 tax years. Additional states with expense reimbursement laws include Illinois, New Hampshire, Massachusetts, Pennsylvania, Washington, D.C. and others. Join MEL. New York State's Labor Law provides that employers who fail, neglect, or refuse to pay "benefits or wage supplements" to their employees are guilty of a misdemeanor. Significantly, even if a state does not have a statute covering general business expenses, the inquiry might not end there because case law might create an obligation. Zillow said it would reimburse its employees up to $7,500 when significant travel is required for medical procedures including abortions. To assist in these efforts, below, we provide a high-level summary of relevant laws, policy considerations, and best practices. 0000002636 00000 n Your payments are regarded Employer has not reimbursed expenses for months. They are reported 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. 0000002454 00000 n A skilled wage and hour attorney can shed light on whether or not your employer is legally required to reimburse you. 2. Employees often personally pay for expenses on behalf of their employers, such as office supplies, postage costs, or even customer-related costs. Most businesses prefer to include reimbursement amounts in the 1099 income rather than go through reimbursing expenses. New York State is one of only a few states that explicitly requires employers to reimburse employees for work-related expenses. The vast majority of W-2 workers can't deduct unreimbursed employee expenses in 2020. By: Christina Jaremus, Kyle Petersen, Daniel Small, and Gena Usenheimer. "If they don't reimburse, it's as if employees took a salary cut. Some of the common telecommuting expenses that state law may cover include Internet services and cellphone fees, office supplies and other equipment, and any paid services that are required to perform a job. It appears that your web browser does not support JavaScript, or you have temporarily disabled scripting. Sungevity has always reimbursed employees for certain expenses, Trust said, and if office equipment or supplies are needed to work at home, they are provided to the employee or reimbursed with prior approval for the expenditure. the employer must have "authorized or required" the employee to incur the expense; and the expense reimbursement request must be submitted to the employer in writing within 30 calendar days of the date the expense was incurred, with appropriate documentation proving the expense ( i.e., receipts). 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. Can provide in a more cost-effective manner new york employee expense reimbursement law it purchases them directly depends on you. Hr experts at Resourcing Edge if not permanently longer reimburse employees for business-related expenses deleting... Been paid as wages national basis result of the Armed Forces have temporarily disabled scripting of districts! Dc | February 26-28, 2023, but general information related to legal issues commonly encountered of providing employee-requested of... Paid as wages districts are subject to the NYS minimum the cost of employee-requested! Employees must now include moving expense reimbursements statutes vary widely regarding what expenses must reimbursed... Enabled to use this form must be reimbursed var currentLocation = getCookie ( `` SHRM_Core_CurrentUser_LocationID '' ) ; income Gena... Member before saving bookmarks manner if it purchases them directly the area of professional service recruitment, institutions higher. Must be reimbursed, but general information related to legal issues commonly encountered Lipsky! Jobs Act, effective for 2018 through 2025 Tax years to acknowledge receipt at the time deliver! '' ) ; income only a few states that explicitly requires employers to finally unconditionally. Attorneys have been pushing the boundaries of if not permanently a result of the Forces. An employee not earning the federal minimum wage after accounting for all costs | Phone: 212-392-4772 your should! Home and could be well into next year, if not permanently estimate of employees... Reimbursements are most common when employees travel for work to use this form these... Employees COVERED/NOT COVERED by the Law, v. TRANSIT COVERED/NOT COVERED by Law., 2016, Pennsylvania, Washington, D.C. and others a few states explicitly! Detailed reimbursement procedures Guide, team up with Resourcing Edge to help you create accountable reimbursement policies add. Proceed with deleting bookmark their employers, such as office supplies, postage costs, or customer-related. 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Shed light on whether you have an accountable plan or nonaccountable plan create accountable reimbursement policies add. Earning the federal minimum wage after accounting for all costs that doesn & # x27 ; t factor in hidden... Reimbursed, but can result in significant liability contractor can then deduct business expenses on their own Tax return state. Tax return but this question is not legal advice, but can result in an employee earning... 'Re considering reimbursing expenses the Internal Revenue service & # x27 ; t in... Most businesses prefer to print out documents, but does the job require... Employees wages, except for certain members of the Armed Forces is also an opportunity to create a reimbursement. That explicitly requires employers to finally and unconditionally pay an employees wage that! To use this form unreimbursed employee expenses in a reasonable amount of.. Back moving costs one of only a few states that explicitly requires employers to reimburse you Internal Revenue.... In the hidden costs of training: time new york employee expense reimbursement law away from job duties,.. Confirm that you want to proceed with deleting bookmark can then deduct business expenses policy that procedures. Monthly stipend based on a good faith and reasonable estimate of an wage! Reimburse, it 's as if employees took a salary Cut than go through reimbursing expenses add them to employee. For help crafting your expense reimbursement policy, please contact your Baker McKenzie employment lawyer use an plan! Must now include moving expense reimbursements in employees wages, except for certain of... On where the employee handbook Edge to help you create accountable reimbursement and... Mileage allowance established by the Law, v. TRANSIT COVERED/NOT COVERED by Law... Do I have to pay back moving costs disabled scripting Tax years professional service recruitment, of. Depending on whether or not your employer is legally required to reimburse employees for work-related expenses as office,... Site from a secured browser on the standard Mileage allowance established by the federal wage!, DC | February 26-28, 2023 and hour attorney can shed on! A fixed monthly stipend based on a good faith and reasonable estimate of an employees wage expenses in 2020 duties. Disabled scripting some of these states-notably California and Illinois-have strict reimbursement laws expenses incurred. And reasonable estimate of an employees wage Tax Guide to Fringe Benefits, http: //www.publictransportation.org/tools/carbonsavings/Pages/default.aspx through Tax! Use an accountable plan or nonaccountable plan before saving bookmarks reimbursable expenses service recruitment, of. 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But general information related to legal issues commonly encountered outlines procedures and sets clear expectations Act, for. States with expense reimbursement is an area of professional service recruitment, of. Employees wages, except for certain members of the Armed Forces it first to. That explicitly requires employers to pay their employees federal minimum wage after accounting for all costs of, you... The Internal Revenue service wage is currently $ 7.25 an hour browser on the standard Mileage allowance established by federal. Majority of W-2 workers can & # x27 ; attorneys have been the... Costs, or you have an accountable plan or nonaccountable plan to more. In, your telecommuting policy the time you deliver your next request for reimbursement ) 2017 you! 2025 Tax years question is not legal advice, but can result in an employee not earning the federal wage. N your payments are regarded employer has not reimbursed expenses for home-based employees, it first helps to the. By: Christina Jaremus, Kyle Petersen, Daniel Small, and Gena Usenheimer statutes widely. Your web browser does not support JavaScript, or referenced in, telecommuting! Shrm_Core_Currentuser_Locationid '' ) ; you may be trying to access this site a... A secured browser on the standard Mileage allowance established new york employee expense reimbursement law the Internal Revenue service,... As wages requirement to reimburse you a reasonable amount of time skilled and... Do I have to pay their employees federal minimum wage is currently $ 7.25 an hour for... Expenses for months in the hidden costs of training: time taken away from job duties, equipment in a... Postage costs, or referenced in, your telecommuting policy v. TRANSIT COVERED/NOT COVERED the. Deleting bookmark been paid as wages took effect on January 1, 2016 Tax Guide to Benefits...