You can edit the text in this area, and change where the contact form on the right submits to, by entering edit mode using the modes on the bottom right. The hiring of a lawyer is an important decision that should not be based solely upon advertisements. While a remote work model has key benefits for employers and employees, there are additional considerations, such as costs for employees' laptops, printers, desks, postage, telephone and internet, and office supplies such as paper and ink. In those cases, the Department of Labor (DOL) has instructed that employers may not require employees to pay or reimburse their employers for remote work costs such as internet access, a computer, additional phone line, and increased use of electricity if telework is being offered as a reasonable accommodation. They should not be construed as legal advice, and readers should not act upon the information contained in these publications without professional counsel. See a licensed agent for detailed information on your state. The reality is, its open to interpretation. employees' reimbursement of the City for personal use of mobile phones and of long distance telephone services. It was last updated on February 9, 2023. have one or more wireless communications customers in New York State. Lets say a pizza company only reimburses its delivery drivers $1 per delivery for the mileage and gas used to make the delivery. Employers must reimburse employees for all necessary expenses or losses. Illinois law imposes time restrictions by requiring employees to submit expense reimbursement requests within 30 calendar days of incurring the expense and include sufficient documentation to verify the expense. Federal law doesn't require employers to reimburse their employees for work expenses. In some instances, telework may be provided to qualified individuals with disabilities as a reasonable accommodation under the ADA. The law, which takes effect on May 7, 2022, will require all private employers, regardless of size, with a place of business in New York State to provide written notice upon hire to new employees if . You might also want to consider offering a remote work reimbursement to all your employees, whether legally required or not. For example, in New York, employers must. Stat. <>>> Reduce risk, save time, and simplify compliance management. Increase engagement and inspire employees with continuous development. 1011 Camino Del Rio S, Suite 531 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. The federal minimum wage is currently $7.25 an hour. Only authorized expenses by the employer must be reimbursed. According to a 2022 Reuters article17, several clients of Ackermann & Tilajef have settled cases with their employers over unreimbursed remote work expenses. 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). Paycors compliance solutions help ensure accurate filing and mitigate risk. Employees working from home instead of at the office often had to rely on their own equipment and internet instead of using the employer-provided tools they were used to. Employee stipends allow your remote workers to cover their employee expenses quickly and flexibly, all while satisfying state requirements for remote work expenses. Paycors innovative solutions purpose built for leaders can help you build a culture of accountability and engagement. With over 30 years of employment law experience, Lipsky Lowe LLP has a proven track record of advocating for clients in all areas of employment law, including employee expense reimbursements. See our vetted tech & services alliances. 2023 Paycor, Inc | Refer Paycor | Privacy Policy | 1-800-501-9462 | Similar to California's law, the Illinois law has also been interpreted to require reimbursement for cell phone and internet expenses when employees are required to use their cell phones or internet for work purposes in addition to equipment such as routers, laptops, and printers. United States. Employers must reimburse employees for expenses connected with their employment and at the employer's request within 30 days of when the employee presents proof of payment to the employer. As the COVID-19 pandemic hit, several states and localities implemented shelter-in-place orders to slow the spread of the coronavirus. Illinois Wage Payment and Collection Act, Section 9.5: Reimbursement of employee expenses6. 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. 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. 4. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LABionNum=2802. But, employers should be sure to consider tax implications when considering the best route for their business. Android, iPhone, etc. Employers that operate in several different jurisdictions are encouraged to familiarize themselves with the expense reimbursement requirements of all of those jurisdictions, if any. The laws around what's considered necessary are relatively open to interpretation, but state laws generally define necessary as any expense required for the employee to complete their job. Paycor has the right defenses in place to protect your data. We think a more palatable and reasonable approach is for the employer to pay a flat monthly stipend (e.g., $10 - $100 or some estimated percentage like 10-50%: the reimbursement number is a business decision based on history of usage). When the COVID-19 pandemic forced some businesses in the United States to move to remote work, many organizations didnt have a remote work policy or procedures in place. Test drive Paycor Payroll, Onboarding, HR, and Time for 14 days. Before you decide, ask us to send you written information about our qualifications and experience. California's stringent wage and hour laws have led to unique legal risks for employers as they manage remote workers during the COVID-19 pandemicwhich makes it essential for employers to. The Division of Labor Standards protects all workers, including those that are undocumented or paid off the books, and ensures employers are following Labor Laws. Our team of experienced sales professionals are a phone call away. It does not matter whether the phone bill is paid for by a third person, or at all. To help employers, weve put together a chart listing which states have remote employee reimbursement laws and what expenses must be reimbursed. Check out this guided tour to see for yourself how our platform works. - reimbursement obligations employers might not have had to think about before COVID-19. 0S],IIGV}4n ``. A: The safest way to monitor employee reimbursements is to provide them on a request-by-request basis. You'll simply approve these amounts up to their eligible allowance. Stay up to date with the latest HR trends. Return unsubstantiated amounts: Any excess reimbursements or allowances must be returned within a reasonable time (120 days). Pay employees from any location and never worry about tax compliance. 75 percent? App. 2022), Guidelines for Accommodating Sincerely Held Religious Beliefs and Disabilities for Employers Mandating Vaccinations (Sept. 2021), Religious Beliefs in the Workplace Following the Supreme Courts Bostock Decision (Sept. 2021), The COVID-19 Employment Litigation Landscape Is It All Uphill From Here? The employer advances or pays an amount to an employee regardless of whether they expect the employee to have business expenses. Lets create value across your portfolio. Some employees wages may dip below the federal minimum wage as a result of their employer not reimbursing them for business-related expenses. 91A.5 (1) (b) ). RF%|h3H c"40JOwF}\5Y UGUn}:xIdRu :I8U xys B Jir:TxwO1;ZL&)[G&+E,NU; Drive engagement and increase retention with talent development and continuous learning. Determining if you will need to pay taxes on expense reimbursements depends on whether you use an accountable or nonaccountable plan. Representation in business, real estate, construction, home care, trust and probate litigation and general civil litigation. For example, if a pay deduction results in an employees hourly rate becoming below the federal minimum wage, the employer has violated the FLSA. at p. 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. General Email: info@utilityproject.org This can be tricky, however, as the employer must be sure to document/identify the amount of compensation attributable to the expense actually incurred. As the pandemic continues, many employers are attempting to adapt to their workforce's new normal, which may include a continuation of their current remote model or the implementation of a hybrid work model. Many even purchased new home office setups, including desks and chairs. Some states have laws that require employers to reimburse employees for the costs of necessary job expenses. A: Given that many employees have shifted to working from home, employers should establish or revamp their reimbursement policies and make sure that their employees are aware that they can secure reimbursement of their expenses. 1 0 obj Page Content These days, most employers can't keep pace with technology as nimbly as their workforce can. 1144.). Federal law states that an employer only needs to reimburse their employees for work-related expenses that drop their earnings below theminimum wage. endobj Employers must reimburse all necessary expenses, including those incurred by the employer's direction or during the discharge of their normal job duties. Albany, NY 12210 . Otherwise, the employer would receive a windfall because it would be passing its operating expenses on to the employee. Learn a lot in a little bit of time with our HR explainers. Stay tuned for more on that! Maximize training and development with personalized content. (d) In addition to recovery of penalties under this section in a court action or proceedings pursuant to Section 98, the commissioner may issue a citation against an employer or other person acting on behalf of the employer who violates reimbursement obligations for an amount determined to be due to an employee under this section. Connect with new hires and make a lasting first impression. %PDF-1.5 Washington State Department of Labor & Industries15. Under the Fair Labor Standards Act ("FLSA"), there is no direct expense reimbursement requirement. Even if your state does not mandate reimbursement to employees, experts recommend offering some type of reimbursement policy because it helps build loyalty and morale among your employees. Business connection: All ordinary and necessary business expenses must have been paid or incurred while performing services as an employee. Not only does our interpretation prevent employers from passing on operating expenses, it also prevents them from digging into the private lives of their employees to unearth how they handle their finances vis--vis family, friends and creditors. Lastly, you know these new business expense reimbursement laws could impact your budgets going forward. New York State Department of Labor David A. Paterson, Governor M. Patricia Smith, Commissioner Phone: (518) 457-4380 Fax: (518) 485-1819 W. Averell Harriman State Office Campus, Bldg. Join us at our exclusive partner conference. Even if your organization is in a state where remote work reimbursements aren't required, it's still a good idea to have an expense reimbursement policy in place so that employees know the policy ahead of time. 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. . 2023), How to Navigate Ballooning Pay Disclosure Laws Across the US (Mar. Even fewer states require reimbursement for remote work expenses. There arent any federal guidelines on remote work-specific expenses. The requirements of the Americans With Disabilities Act (ADA) may also alter employer reimbursement obligations. If you want specific legal advice about your particular legal issues, or if you want to create an attorney-client relationship, you need to retain the Law Offices of Ron A. Stormoen by a signed written retainer agreement. Reimbursements are considered nonaccountable if: The IRS Publication 15 and Publication 535 have more details about the tax implications of business expenses and reimbursements. 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. Eliminate the stress of ACA filing with streamlined reporting. Leverage AI to automate sourcing and increase candidate diversity. 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. In Mid-March, much of the nations workforce began working from home due to the COVID-19 pandemic. Ann. At least ten states Illinois, California, Massachusetts, Montana, Pennsylvania, New York, New Hampshire, North Dakota, South Dakota, Iowa and the District of Columbia have enacted laws requiring employers to reimburse employees for certain remote work expenses. You'll want to incorporate anything you're legally required to reimburse employees 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. One of the best ways to handle remote work expense reimbursements is to create a written policy for your organization that outlines what reimbursable expenses are for your employees. The FLSA does not explicitly require an employer to reimburse its employees for business expenses or deductions. New York; Pennsylvania, and; . As a result, many businesses are adopting automated expense management systems, which has resulted in an increase in the use of third-party providers. Employers must reimburse employees for all necessary tools related to their scope of employment. 2021), Tying Compensation to Furthering Inclusion and Diversity Goals (Mar. Ann 260.3. Several states have also enacted their own expense reimbursement laws that either meet or exceed the standard set forth in the FLSA. This depends on the work performed, but reasonable reimbursable expenses will likely include: internet services, mobile data usage, laptop computers or tablets, and equipment such as copiers and printers. https://casetext.com/regulation/district-of-columbia-administrative-code/title-7-employment-benefits/chapter-7-9-wage-hour-rules/rule-7-910-tools, https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2402&ChapterID=68, https://www.legis.iowa.gov/docs/code/91A.3.pdf, https://malegislature.gov/laws/generallaws/parti/titlexxi/chapter149/section148, https://www.revisor.mn.gov/statutes/cite/177.24, https://leg.mt.gov/bills/1995/mca/39/2/39-2-701.htm, https://casetext.com/statute/new-hampshire-revised-statutes/title-23-labor/chapter-275-protective-legislation/reimbursement-of-employee-expenses/section-27557-reimbursement-of-employee-expenses, https://newyork.public.law/laws/n.y._labor_law_section_198-c, https://casetext.com/statute/north-dakota-century-code/title-34-labor-and-employment/chapter-34-02-obligations-of-employer-and-employee/section-34-02-01-employer-must-indemnify-employee-for-losses-and-expenses-exception, https://sdlegislature.gov/Statutes/Codified_Laws/2077532, https://lni.wa.gov/workers-rights/wages/getting-paid/, http://www.seattle.gov/laborstandards/ordinances/wage-theft, https://www.reuters.com/legal/government/amazon-sued-over-employees-remote-work-costs-during-covid-19-pandemic-2022-03-25/. 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