0 41-1904 authorized the Commission to recommend "legislative salaries" that are to be submitted to qualified electors at the next general election after each salary recommendation is made. If housing or meals are provided, the reimbursements may be less than, and cannot exceed, the lodging and meal and incidental expense reimbursements provided for pursuant to subsection C. You're all set! Use this guide to help you as you approach recruiting, hiring, and managing remote employees. KF,1G; Employers should also reassess their employee reimbursement policies in order to ensure they remain compliant. 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. 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 endstream endobj startxref What may be reasonable in one instance might not be in another. 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. 41-1104. Browse tips on what you need to launch, run, and scale a business successfully, from healthcare to hiring, filing taxes, or just creating a great place to work. 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).). Youll need to decide how to address and communicate any changes companywide. hb```b``>u,\AF d`xv@2! 3|T?20fgqE@I!QKDF~*vm78[r#ar It's important to note that these exemptions exist to accommodate unique working arrangements and small business operations. The unauthorized recommendation does not alter the per diem reimbursement levels for legislators in A.R.S. Accordingly, we offer the following guidance: A: Under the Fair Labor Standards Act (FLSA), an employee is entitled to reimbursement of expenses incurred on the employers behalf if that expense brings the earnings of an employee below the federal minimum wage. A: No, an employer is not typically required to reimburse an employee for business-related expenses when they are neither required nor encouraged to work from home. Building an expense plan will save employers time, confusion, and stress. a printer and printing supplies, like ink cartridges and paper, office supplies, possibly including an ergonomic desk and chair, and. The lengthy history distinguishing salary from reimbursement (including per diem) in Arizona leads to the conclusion that the Commission has constitutional authority to recommendonlysalary changes. In addition, if any expenses are paid in excess of IRS limitations, then the excess is taxable income. Generally, this wont include commuting expenses between an employees home and workplace. If the employer does not have an accountable plan, then any reimbursements, even those that are ordinary and necessary, are taxable income. Expenses incurred by employees in the course of business should be costs incurred by the employer, not by its employees. Thus, while the Commission's recommended $24,000 annual salary for legislators that the voters approved is valid, its attempt to alter the per diem reimbursement rate for legislators is not. 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. 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. 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. Our company values are reflected in our product and in our team. 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. From coast to coast and across industries, small- and medium-sized businesses are saving time and money using Justworks all-in-one solution. Get free summaries of new opinions delivered to your inbox! Instead, whether work-related expenses must be reimbursed by employers is a matter of state law. Expense reimbursements or benefits received by a parent in the course of (: = . Companies in California are notorious for trampling on the rights of workers. We do not handle any of the following cases: And we do not handle any cases outside of California. Courts in the Golden State have also said companies should pay for similar items like Internet expenses, data plans and other computing expenses. An employer will want to maintain records as to reimbursements made to employees and the rationale behind those reimbursement amounts. The California Labor Commissioners Office can also cite the employer for violating the law. In Minnesota, for example, employees only have to be compensated for certain business expenses at the end of their employment. Because one of the consequences of that recommendation could have been to dictate the length of the legislative session, the Attorney General concluded that the Commission had exceeded its limited authority to set salaries. Question Presented At the November 3, 1998, general election, Arizona's electorate passed Proposition 302, which contained the following language proposed by the Commission on Salaries for Elected State Officers: Each state legislator shall be paid $24,000 per annum, and as further compensation, per diem reimbursement commensurate with and as provided by law for non-elective Arizona state . 2, 1. The law covers reimbursement of travel by air, motor vehicles or railroads, meal and lodging expenses, so long as the claims are . The Commission's recommendations became ballot Proposition 302, which the voters passed in November 1998. 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. Magma Copper Co. v. Arizona State Tax Comm'n, 67 Ariz. 77, 86-87, 191 P.2d 169, 175 (1948). IRS Publication 535, Business Expenses, states the following: To be deductible, a business expense must be both ordinary and necessary. See Earhart v. Frohmiller, 65 Ariz. 221, 178 P.2d 436 (1947). This distinction between salary and per diem reimbursement is not unique. The Tax Cut and Jobs Act eliminated this deduction for W-2 employees from 2018 through 2025. Your company required or approved the employee to make the expense. 38-637, and for reimbursement of travel expenses for the legislature under A.R.S. 778.217 Reimbursement for expenses. As if IRS regulations werent enough to keep up with, some states are adding their own expense reimbursement laws that your staffers will have to comply with, too. Finally! 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. art. Page 16 of IRS Publication 15, (Circular E), Employer's Tax Guide, states that expense reimbursements do not have to be included in an employee's wages if the business has an accountable plan. J+cQR! Expense reimbursement is getting more and more complicated for your finance department, due largely to a newer legislative trend. The 1932 initiative, however, removed the Legislature's authority to change its members' compensation. endstream endobj 709 0 obj <>stream Our personal injury attorn, If you need a lawyer for personal injury, auto accidents, immigration, or m. Further, Arizona statutes A long-term subsistence allowance for legislators shall be established pursuant to section 41-1104. hUn09imc8.=(2%C}"S6dR7@@*8k07\H05`kH? For example, California companies required to pay for employees cell phone bills now need to allot for this massive expenditure. You have a Court Order from Maricopa County for child support, spousal maintenance, medical insurance coverage, or for reimbursement of medical, dental or vision care expenses not covered by insurance, AND. Essentially, these are laws requiring companies to reimburse employees for necessary expenditures incurred on the job. Not doing so could subject an employer to potential liability. If the employee leaves his or her job, they may have to return what they bought to their employer. 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. online subscriptions, like a paid plan for Zoom. Payroll software that runs seamlessly so you can make any payments at no extra cost. Workers are protected from retaliation if they file a claim. Generally, this wont include commuting expenses between an employees home and workplace. Lastly, you know these new business expense reimbursement laws could impact your budgets going forward. *Note: Illinois says the employee can offer a signed Ann. art. 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 of this section. In order to reimburse employees for expenses, its vital for an employer to have an accountable plan. The Legislature retains authority to set its own rates of reimbursement for necessary expenses. Violating the terms of this agreement can amount to a breach of contract. at 226, 178 P.2d at 438. Code 62(a)(2)(D) allows an eligible educator to deduct from federal gross income unreimbursed, qualified expenses (e.g., expenses for books, supplies, and computer equipment used in the classroom; expenses incurred during qualified professional development courses). home utilities, like heat and air conditioning. With this unprecedented shift in working habits, employers may be overlooking business-related expenses being incurred by their employees. Shouse Law Group has wonderful customer service. The standard mileage rate is set by the IRS each year. 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. 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. Recently, Illinois modified its Wage Payment and Collection Act to include expense reimbursement rules. movement? The invalidity of the Commission's per diem recommendation does not negate the voters' approval of the legislative salary increase. Wed love to meet them. Before you decide, ask us to send you written information about our qualifications and experience. You will receive a link to create a new password via email. 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. This can be tricky, however, as the employer must be sure to document/identify the amount of compensation attributable to the expense actually incurred. The employee also must submit business expenses within a reasonable period of time after they occurred. expense qualifying for reimbursement or 30 days of satisfying the requirements for an expense reimbursement. If youre needing support with employment-related compliance needs, it might be time to consider a Professional Employer Organization (PEO). {KmT8(PI[I_,WH#R For more information about the legal concepts addressed . SeeHistorical Note, ARIZ. CONST. Lost your password? 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. Streamline and simplify time tracking for you and your workforce. LawServer is for purposes of information only and is no substitute for legal advice. Minimum wage regulations apply only to employees. at 2(b). F On December 17, 1997, the Commission met and voted to recommend a salary increase for legislators from $15,000 to $24,000 per year. Though Illinoiss law is getting a lot of attention, its not the first state to act. 180, 2 (currently codified at A.R.S. 41-1104.(1). 38-621 through A.R.S. 2, 1. Those expenses can further get defined as expenses . This is why a good employee expense reimbursement policy can be handy. Our personal injury attorn, Piccarreta Davis limits its practice to personal injury, medical malpractic. All rights reserved. ARIZ. CONST. Lodging expenses; meal and incidental expense reimbursement and long-term subsistence allowance; items covered by reimbursement; amount predetermined by department of administration. When the Commission on Salaries for Elective State Officers ("Commission") recommended changing legislative"per diem"rates, it acted beyond its statutory power to recommend changing legislative"salaries." A 50-state survey summarizing business expense reimbursement requirements and restrictions on wage deductions for business expenses under state law. : SECTION V . 41-1104.A commission or agency of this State has only those powers provided by the Arizona Constitution or statute. Three of the four expressed their views on the severability issue, unanimously expressing their intent that the clauses be severable. 22 cents per mile for medical or moving work. Thats where employee expense reimbursement comes in. (2) The geographic area over which the court has authority to decide cases. This rate applies to both cars and trucks and fluctuates year by year. proactive. 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. That's because these claims fall under medical expenses and not business expenses. A. However, a key to maintaining any accountable plan is to properly and timely substantiate expenses. 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. Id. 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. In connection with recommending remuneration for legislators, the Commission's power is strictly limited to making recommendations "as to legislative salaries" that would then be submitted to the voters. The director of the department of administration shall also establish policies and procedures for the claiming of lodging and meal and incidental expense reimbursements and long-term subsistence allowances by persons temporarily required, for a period of not less than thirty days, to reside away from their primary place of residence. If the employer fails to pay these reimbursements, the employee can file a wage and hour lawsuit. The voters approved Proposition 302 effective at the beginning of the next regular legislative session. Id. 3. Business Expenses: A Beginner's Guide To Building A Plan. Employees should only have to pay income taxes on the wages they earn and certain taxable fringe benefits. Employers should consider sending reminders to employees about submitting reimbursement requests and check in with their employees to ascertain the various types of expenses they may be incurring. Copyright 2013-2023 Justworks, Inc. and its affiliates. Additionally, the 1958 constitutional amendments treated salary and reimbursement separately. Stat. Id. Copyright 2013-2023 Justworks, Inc. and its affiliates. Code of Federal Regulations Title 47. Any fines or penalties recovered from the citation will be paid to the employee.[12]. A bit about us: One of the largest labor and employment law firms representing management in all types of employment-related legal matters. The employee submitted the expense for reimbursement with proper supporting documentation * (i.e., a receipt) within 30 calendar days of when it was incurred. Terms of Use Privacy Policy Security. The District of Columbia's expense reimbursement law, found in Title 7 Section 910.1 of the D.C. Municipal Regulations, requires employers to pay the cost of purchasing and maintaining any. Several states, though, have statutes that detail when an employer has to reimburse an employee for business expenses including those related to working remotely or telecommuting. The, must substantiate his or her business expenses. The Commission also recommended that per diem paid to legislators be commensurate with that provided for non-elective state employees. The employee submitted the expense for reimbursement with proper supporting documentation* (i.e., a receipt) within 30 calendar days of when it was incurred. Under the 2005 Code the educator's expense deduction was scheduled to expire on December 31, 2005, as discussed in TIRs 05 . Find the answers you need quickly by exploring the articles in our Help Center. Other jurisdictions that already have expense reimbursement laws on the books include: Generally, your department knows what typical business expenses states will expect to be reimbursed, like transportation, lodging, meals and entertainment. Q ta$DLatBi$`1 #,b 1130 0 obj <>stream ." 115,9.5; Mont. For almost thirty years following the creation of the Commission, the Legislature continued to set its own reimbursement rates. P)%{u2 m@rD ( Dyph. They should not be construed as legal advice, and readers should not act upon the information contained in these publications without professional counsel. All rights reserved. They were so pleasant and knowledgeable when I contacted them. A: Employers should have a written reimbursement policy that requires employees to submit reimbursement requests by a certain deadline after the expense is incurred. Code. 2894 0 obj <>stream First, double-check if your own state has any laws or any legislation circulating that could lead to new rules in the near future. If housing or meals are provided, the reimbursements may be less than, and cannot exceed, the lodging and meal and incidental expense reimbursements pursuant to subsection C of this section. General Instructions. New Hampshire law requires employers to reimburse employees for expenses within 30 days . The Commission hasnoauthority to venture into other areas, such as recommending that Arizona voters approve entering treaties with foreign countries, imposing new taxes, or altering legislative per diem rates. Get access to a variety of high-quality health insurance plans through our employee benefits packages. 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.) State to Act the four expressed their views on the rights of workers and money using Justworks all-in-one.! Be severable consider a Professional employer Organization ( PEO ). ) )... Benefits received by a parent in the course of (: = businesses saving! Are reflected in our team employee expense reimbursement is getting a lot of attention, its vital an... Substantiate his or her job, they may have to return what they bought to their employer a of! Which the voters ' approval of the legislative salary increase rD ( Dyph upon the information contained in publications! 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Paid to legislators be commensurate with that provided for non-elective state employees a password... Also cite the employer for violating the terms of this state has only those powers provided by Arizona... A printer and printing supplies, possibly including an ergonomic desk and chair, and should! Received by a parent in the course of (: = expense qualifying for reimbursement of travel expenses the! Have an accountable plan is to properly and timely substantiate expenses ; meal and incidental expense laws... Reimbursement and long-term subsistence allowance ; items covered by reimbursement ; amount by. Companies required to pay for employees cell phone bills now need to allot for this expenditure..., WH # R for more information about the legal concepts addressed are saving time and money Justworks! You know these new business expense reimbursement requirements and restrictions on wage deductions for business expenses state. Software that runs seamlessly so you can make any payments at no extra cost and remote... 41-1104.A Commission or agency of this agreement can amount to a newer legislative trend also. Fails to pay for employees cell phone bills now need to allot for this massive expenditure:.. Regular legislative session free summaries of new opinions delivered to your inbox is getting more and more complicated for finance... Can make any payments at no extra cost the course of business should be costs by... Expenses incurred by the IRS each year they occurred upon the information contained in these without! Complicated for your finance department, due largely to a newer legislative trend also recommended that per diem levels! Should not be construed as legal advice, and stress costs incurred by in... Largest Labor and employment law firms representing management in all types of arizona expense reimbursement law legal.. Summarizing business expense reimbursement policy can be handy per mile for medical or moving work reimbursement separately, due to! Peo ). ). ). ). ). ). ). ). ) )... An ergonomic desk and chair, arizona expense reimbursement law managing remote employees creation of the Commission also recommended that diem... How to address and communicate any changes companywide certain business expenses under state law, small- medium-sized. Employment-Related legal matters expenses and not business expenses: a Beginner 's guide to help you as you approach,! Be commensurate with that provided for non-elective state employees ' approval of the four expressed their views on the of! About us: One of the following: to be compensated for certain business expenses within 30 of. Plans and other computing expenses personal injury attorn, Piccarreta Davis limits its practice to personal,! These claims fall under medical expenses and not business expenses under state law # R for information! Are laws requiring companies to reimburse employees for expenses, data plans and computing. Complicated for your finance department, due largely to a newer legislative trend company values are reflected in our and! Proposition arizona expense reimbursement law, which the voters approved Proposition 302 effective at the end of their employment between salary reimbursement. Requiring companies to reimburse employees for necessary expenses area over which the has.: Illinois says the employee. [ 12 ] ) % { u2 @. And fluctuates year by year communicate any changes companywide, employees only have to pay income on! Also said companies should pay for employees cell phone bills now need to allot for massive... Unprecedented shift in working habits, employers may be overlooking business-related expenses being incurred employees... Companies in California are notorious for trampling on the rights of workers of the largest and.