When Should Employers Reimburse Expenses for Remote Workers? Under the Fair Labor Standards Act (FLSA), there is no direct expense reimbursement requirement. Expense reimbursement is an area of California employment law that receives little attention, but can result in significant liability. Location: basis. maintained. A common approach is to provide a fixed monthly stipend based on a good faith and reasonable estimate of an employees reimbursable expenses. If you have questions, contact our Educational Services unit by phone at (518) 474-1764 or by email to: orpts.edservices@tax.ny.gov. See Cochran v. Schwans Home Serv., Inc. 190 0 obj <>stream 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. 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 . "It is good practice to reimburse employees for expenses that they have to incur to do their jobs, even if not required by law, because it is the equitable thing to do," he said. 0000003840 00000 n Vaccine Passports: The Ticket to Our New Normal? These expenses can include fuel costs, maintenance. Virtual & Washington, DC | February 26-28, 2023. accountable plan amounts arent considered wages, they arent subject to Federal law excludes some types of employees from the requirement to receive one and one-half times their regular rate of pay. Employers must reimburse their employees within 30 days of the reimbursement becoming due. Members may download one copy of our sample forms and templates for your personal use within your organization. It depends on what plan you use: My Company Requires Employees Sign Non-competes. Home expenses such as telephone and internet fees, extra energy to heat or cool a house and office supplies can add up to $50 to $200 a month per employee, according to more than a dozen lawsuits . The process for returning Here at LaborLawCenter our Compliance Experts are constantly working to stay on top of the many compliance changes so you don't have to. California has one of the most complicated and well-defined employee expense reimbursement laws. Watch Now! Expense Reimbursements in the Era of Remote Working, Supreme Court Holds That Highly-Compensated Employees Solely Paid a Day Rate Must Meet Reasonable Relationship Test, Policy Matters Podcast Episode 34: Presidents Second Nominee for Wage and Hour Administrator Stuck in CommitteeAgain, Ninth Circuit Rehearing Suggests a FAArewell to Californias Arbitration Prohibition, Not Remotely Helpful: DOL Issues Guidance on Compensability of Teleworking Breaks, Now Available! Mileage rates Mileage rates are based on the standard mileage allowance established by the Internal Revenue Service. Our attorneys are familiar with the applicable federal, state, and local laws surrounding employee reimbursements and will help you explore your legal options for pursuing reimbursement from your employer. To Even if your company is in a state that does not have reimbursement laws, it's ideal to reimburse anyway, said Robin Samuel, a partner in the Employment Practice Group of Baker McKenzie in Los Angeles. Be aware, however, that some states have their own laws surrounding expense reimbursement. A skilled wage and hour attorney can shed light on whether or not your employer is legally required to reimburse you. Those expenses can further get defined as expenses . Business Units are required to follow the policies outlined in this chapter. Policy Statement. While there is some discretion the employer can exercise in determining the amount of reimbursement (such as actual expenses and the reasonableness of the employee's choice: i.e., was the employee "required" to use their own phone), the following language by the court shows the standard is still reasonable reimbursement (which means if . 2023 All Rights Reserved, NYC is a trademark and service mark of the City of New York. Massachusetts, Montana, Pennsylvania, New York, Iowa, and the District of Columbia. Join thousands of people who receive monthly site updates. When an employee spends his or her own money on ordinary and necessary business expenses, a reimbursement or allowance arrangement is the system used to pay them back. Most employee expenses will be reimbursed through the Travel and Expense module in the Statewide Financial System (SFS). should re-examine their reimbursement and allowance policies in light of the However, if the . For help crafting your expense reimbursement policy, please contact your Baker McKenzie employment lawyer. Pre-pandemic, employees whose wages were at or close to the minimum wage were typically not among the ranks of workers routinely working remotely. The mileage reimbursement rate set forth by the Internal Revenue Service (IRS) is currently 57.5 cents per mile as of 2019. Employers must reimburse an employee for all necessary expenditures incurred in direct consequence . 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. Illinois Expense Reimbursement Law. We Recommend a Comparability Analysis. depending on whether you have an accountable or nonaccountable plan. } And in other states still, employers are obligated by statute only to reimburse for losses suffered that fall outside of ordinary risks of the business in which he is employed. Founded in 1949, Baker McKenzie advises many of the worlds most dynamic and successful business organizations through more than 4,100 locally qualified lawyers and 6,000 professional staff in 77 offices in 45 countries. Trust said that most employers, including Sungevity, are reimbursing cellphone and Internet expenses on a proportional basis. 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"It means . In light of this, as many as 11 US states, and Washington D.C., have introduced state laws that further protect their employees Remote Employee Reimbursement Laws. Please log in as a SHRM member before saving bookmarks. The California Supreme Court Will Weigh In, Paid Leave For USERRA? Montana's employee business expense reimbursement law is similar to that of California's and Illinois'. Quite the contrary, courts in the Golden State interpret this to require reimbursement of a reasonable percentage of employees monthly cellular data and internet costs even if the employee had unlimited data plans and home internet network for personal use and even if the employees monthly bills did not increase as a result of the business use. D.C. Municipal Regulation Title 7, Section 910.1. professional licenses. How can a failure to reimburse employees result in minimum wage violation? If For Now. Zillow said it would reimburse its employees up to $7,500 when significant travel is required for medical procedures including abortions. Your company required or approved the employee to make the expense. While employers typically provide a range of office supplies to remote workers, including laptops, keyboards and printers, employees often payfor additional expenses. 778.217 Reimbursement for expenses. SHRM Employment Law & Compliance Conference. 2032-A on September 28, 2020, after the city council passed the bill a few days earlier. But, there are some complications It follows that if employers allow their employees to opt to use their personal cell phone, instead of a company-issued cell phone, that they should be reimbursed a reasonable percentage of their phone bill for work-related calls or other data usage for using texts or the internet for work purposes. accountable or nonaccountable. Download Vendor Claim for Payment (AC3253-S) This form can be used to submit multiple payments for a single vendor. Accountable Plan In business expense reimbursement. (last accessed Dec. 13, 2016). 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. With Several states have also enacted their own expense reimbursement laws that either meet or exceed the standard set forth in the FLSA. BYOD, or bring your own device, policies are becoming more common in work environments. 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. In California, employers must reimburse their employees "for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer." (Labor Code Section 2802.) The law is based on the Internal Revenue . "We strongly support our employees' right to make. 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. When an employee must return a portion of his wages, directly or indirectly, to his employer, this kickback can violate the FLSA. a nonaccountable plan, which are considered wages, treated as supplemental employee would be $550 in wages and $450 as reimbursement of expenses, a total of $1000. $("span.current-site").html("SHRM China "); business expenses. Reimbursements are most common when employees travel for work. 0000000892 00000 n The FLSA does not explicitly require an employer to reimburse its employees for business expenses or deductions. https://www.nysenate.gov/legislation/laws/LAB/198-C If employers fail to adequately reimburse these expenses, the employer may be receiving an hourly kickback from each employee. 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. Under the Fair Labor Standards Act ("FLSA"), there is no direct expense reimbursement requirement. Please enable scripts and reload this page. amount for certain expenses. The best way to avoid issues, Samuel said, is to have a written policy that "describes a process for expense reimbursement that includes checks and balances, such as advance approval for expenses over a certain limit, a verification process for reimbursement of incurred expenses and deadlines for submissions. In 0000002059 00000 n been paid as wages. In that instance, even if there is no additional cost to the employee, the employer must reimburse so as not to enjoy a windfall, some courts have reasoned. "If the employee's Internet bill is $90 a month [for Internet use only, not TV, DVR, phone, etc. 2022 FLSA Litigation Metrics & Trends, California Peculiarities Employment Law Blog, Management Writes: Practical Labor Law Updates, Workplace Safety and Environmental Law Alert Blog. Enacted their own laws surrounding expense reimbursement is an area of California employment law that little! 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