benefits and wage supplements (the latter including reimbursement of expenses, see Labor Law §198-c(2)) . Current State Laws & Reimbursement Policies Search by Filter Given the sudden and rapid expansion of the remote employee workforce, and the patchwork of expense reimbursement requirements under state and federal law, employers should … Chart cells for which there are no requirements regarding business expense indemnification are marked N/A. Recently, Illinois modified its Wage Payment and Collection Act to include expense reimbursement rules. If the amount paid as “reimbursement” is disproportionately large, the excess amount will be included in the regular rate. This is a chart summarizing general reimbursement … proactive. State Joint Travel Regulations - Judicial Branch Travel Policy (updated 02/26/20) Travel Expense Reimbursement Parameters for City and County-Paid Judicial Branch Employees; Judiciary Mileage … ‘Reasonable’ expenses. Alaska, California, Illinois, Indiana, Iowa, Kentucky, Massachusetts, Michigan, Minnesota, Montana, New Hampshire, New York, North Dakota, Pennsylvania, South Dakota, and Washington, DC all have enacted statutes which bear on expense reimbursement. For example: Companies usually mandate receipts. In 2019, Illinois imposed expense reimbursement on employers, mandating they must reimburse for all “necessary expenditures.” The law’s modeled after California’s law … 2. If your work requires you … If they live in California, … CFO Daily News, 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 law is intended to prevent employers from passing on their operating expenses … This field is for validation purposes and should be left unchanged. Such a claim would not include the potential recovery of liquidated damages and attorney’s fees, as are available under the IWPCA. The request will be accompanied by the proposed plan of operation and the specific duties and responsibilities of all personnel for which reimbursement of salaries and travel expense … Please press Ctrl/Command + D to add a bookmark manually. You’ll get to explore thousands of resources that will help you be confident in your HR decisions, increase your productivity and deliver on your business strategies. However, some states have their own laws surrounding expense reimbursement. California 2. As mentioned, these new laws may require your department to tweak its current T&E policies and practices to align with state-specific rules. are aware that these state-level laws are unfolding. Expense retorts: … Washington, DC. Sign up for a free CFO Daily News membership and get our newsletter! New York 6. Courts in the Golden State have also said companies should pay for similar items like Internet expenses, data plans and other computing expenses. Lastly, you know these new business expense reimbursement laws could impact your budgets going forward. You’ll need to decide how to address and communicate any changes companywide. They are not intended either as a substitute for professional advice or judgment or to provide legal or other advice with respect to particular circumstances. In instances where the state has made policies permanent, CCHP has incorporated those policies into this interactive map tool. With CFO Daily News arriving in your inbox, you will never miss critical stories on accounting, benefits, payroll & employment law strategies. XIII.4.C Travel Mileage Rates. Under some state labor codes, that could require employers to take on additional reimbursement of work expenses. – I. Massachusetts 4. Illinois … Federal law does not require employers to reimburse employees for expenses incidental to carrying on the employer's business. Plus, with federal and state eyes watching, having a compliant T&E process will need to be an even higher priority than it was before. If an employer fails to … An employee who incurs expenses in connection with his or her employment and at the request of the employer, except those expenses normally borne by the employee as a precondition of employment, which are not paid for by wages, cash advance, or other means from the employer, shall be reimbursed for the payment of the expenses … Employee Expense Reimbursement > 4. Do I have to pay for a work uniform or buy my store’s clothes in California? You’ll want to proactively account for these business expenses in your T&E budget to stay on track financially and prevent issues. Copyright © 2020 LexisNexis Risk Solutions Group, Permitted and Prohibited Pay Deductions by State and Municipality, The definition of wages, including whether reimbursement for expenses is considered a wage and/or a benefit (, Employment laws such as the Americans with Disabilities Act (ADA), which may require employers to reimburse employees for certain expenses if they are a reasonable accommodation (. New York State Employee Expense Reimbursement Law. movement? However, several states (including California, the District of Columbia, … Sometimes, this requirement is explicit; other times, the law can be interpreted to require the reimbursement of business expenses. There is no federal requirement to reimburse employees for business-related expenses. (2) A reimbursement … *Note: Illinois says the employee can offer a signed Which states are at the forefront of this legislative Who is submitting the receipt? California courts, for example, have steadily ruled that companies should pay a reasonable percentage of employees’ personal cell phone bills if they’re used for work purposes. As a result, employers reasonably took the position that expense reimbursements were not “wages” and thus were not covered by the IWPCA. In accordance with current state policy, employees may be eligible to receive reimbursement for expenses … The federal Fair Labor Standards Act requires that employees earn at least the minimum wage net of any necessary business expenses they incur to do their jobs. Therefore, all commissions paid to the employees here, whether wage commissions or expense commissions, must be considered “wages” as that term is used in Article 6 of the Labor Law. Some states (like California, Illinois, and Montana) have more robust reimbursement laws in that employers are required to reimburse employees for all “necessary expenditures or losses” or “business expenses” incurred … A request by a State approving agency for reimbursement under the law will be subject to the requirements of 41 CFR 8-7.5101-8 as to “Equal Opportunity”. California and five other states have enacted expense-reimbursement statutes. Reimbursement of Employee Expenses. Please enter your username or email address. As of Jan. 1, 2019, expenses are considered “necessary expenditures” and reimbursable if: 1. However, some state and local laws may require employers to bear the cost of business expenses. Such expenses can include office supplies, cell phone and Wi-Fi service, printer and printing supplies and other equipment. 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. Illinois , for example, requires employers to reimburse employees for all “necessary … Rather than simply regurgitating the day’s headlines, CFO Daily News delivers actionable insights, helping Finance execs understand what Finance trends mean to their business. Generally, your department knows what typical business expenses states will expect to be reimbursed, like transportation, lodging, meals and entertainment. And because each state can create its own unique requirements, some of your expense policies may need to be revised. Other jurisdictions that already have expense reimbursement laws on the books include: 1. That position is n… Meanwhile, some states like Illinois expressly permit employers to adopt written policies designed to reasonably control employees’ job-related expenses … But if you work in Illinois, state law now says employees can provide “a signed statement” if they lose a receipt. Montana 5. The employee submitted the expense for reimbursement with proper supporting documentation* (i.e., a receipt) within 30 calendar days of when it was incurred. Related issues are covered elsewhere, including: When employees work remotely, an employer may wish to use a Telecommuting Policy to establish expectations around the reimbursement of certain business-related expenses such as phone calls, shipping costs, etc. "As such, a separate policy for California employees could be drafted that explains that, based on state law, the company will reimburse certain expenses" as stated in the policy. But it’ll be important to watch as courts decide how to interpret these laws and make cas… California’s law has been interpreted to require reimbursement of a “reasonable percentage” of an employee’s monthly bill for Internet or mobile device data plan, even if the employee does not incur any additional cost for using the Internet or mobile device … Sometimes, this requirement is explicit; other times, the law can be interpreted to require the reimbursement of business expenses. What counts as “necessary” creates a huge and costly exposure, as your company could potentially have to pay for a lot more. For example, California companies required to pay for employees’ cell phone bills now need to allot for this massive expenditure. Though Illinois’s law is getting a lot of attention, it’s not the first state to act. Reimbursement for the cost of transportation shall not be certified to the Comptroller for payment by state agencies in excess of the reimbursement allowed in § 2.2-2823 except in an emergency or, when in the interest of the Commonwealth, a greater expense is justified, the facts in each such instance to be stated in the expense … (1) It should be noted that only the actual or reasonably approximate amount of the expense is excludable from the regular rate. Exempt, excluded, and represented state employees may be eligible for the reimbursement of authorized out-of-pocket expenses that are reasonably, actually, and necessarily incurred as a result of conducting state business. Those states include: Illinois, California, Massachusetts, Montana, Pennsylvania, New York, Iowa, and the District of Columbia. Lost your password? In addition, state law … SECTION OVERVIEW AND POLICIES New York State reimburses … 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. Can I file a lawsuit to get unpaid travel expenses reimbursed in California? The California Labor Code – and, consequently, Section 2802 – only … You will receive a link to create a new password via email. An employee claiming he or she was not properly reimbursed would have to characterize it as a breach-of-contract claim. View our privacy policy, privacy policy (California), cookie policy and supported browsers. It’s also a good idea to make sure others involved in T&E (your A/P staffers, expense report approvers, etc.) Your company required or approved the employee to make the expense. Employers should be aware that federal and state laws have different rules regarding reimbursement for expenses incurred by employees with remote work arrangements. Prior to the amendment, expense reimbursements were not addressed in the IWPCA and its regulations. However, some state and local laws may require employers to bear the cost of business expenses. California’s Labor Code Section 2802 normally requires employers to reimburse employees for “reasonable” and “necessary” expenses incurred while performing their job duties. 275:57 Reimbursement of Employee Expenses. (c) Payments excluding expenses. that are reasonably incurred in accordance with job responsibilities. The handbook addresses most common travel situations but is not intended to be a substitute for knowledge of the existing travel laws and regulations. Be aware, however, that some states have their own laws surrounding expense reimbursement. Federal law requires reimbursement only when required expenses push a worker’s earnings below minimum wage. Employer reimbursement policies may require workers to submit expense reports within a certain time frame, but the California Expense Reimbursement Law states that workers be paid for legitimate business expenses no matter when the employee submitted them and whether or not management has already approved the expenses. The rest is up to states and individual employers. Pennsylvania, and 7. As if IRS regulations weren’t enough to keep up with, some states are adding their own expense reimbursement laws that your staffers will have to comply with, too. legislation and in court, it’s important for Finance to stay vigilant and Iowa 3. However, unlike the Illinois law, California law does not enable employers to maintain parameters of expense … Enter your username and password below to log in. First, double-check if your own state has any laws – or any legislation circulating that could lead to new rules in the near future. As states continue to address expense reimbursement in Though Illinois’s law is getting a lot of attention, it’s not the first state to act. Reimbursement Obligations. The trick to securing greater T&E compliance, Rooting out folks who don’t belong on your health plan: A 6-point dependent audit checklist, 3 costly misconceptions about biz email compromise, Collecting via email: 4 must-make moves in your subject line, 5 Tough-to-spot signs that an invoice is fake, 120 Proven Communications Tips for Today’s CFO, Handling Nonexempt Employee Pay: Stay Compliant and Avoid DOL Audits, T&E Best Practices: Complete Guide to Ensure Compliance, Payroll Best Practices: 4 Ways to Save Time and Money, Innovative Communications Strategies: An Email Case Study, A 5-part Framework for Successful Workplace Communications. Essentially, these are laws requiring companies to reimburse employees for “necessary expenditures” incurred on the job. The following chart summarizes state and local requirements regarding general indemnification for employees' business expenses. The materials and information included in the XpertHR service are provided for reference purposes only. New York State’s Labor Law provides that … documentation doesn’t exist, is missing or is lost. Use of the service is subject to our terms and conditions. statement regarding the expense instead of a receipt if supporting New York is one of only a handful of states that has an explicit statute directed at employer reimbursement. XpertHR is part of the LexisNexis® Risk Solutions Group portfolio of brands. Employee Travel Expense Reimbursement > C. Travel Mileage Rates. State labor codes and employee reimbursement As we have reported over the past several years, California's labor code in Section 2802 requires employers to reimburse all "necessary expenditures and losses" incurred as a part of an employee's job responsibilities… Other states, including Illinois, Iowa, Montana, New Hampshire and South Dakota, have enacted laws which may require reimbursement of employee expenses, although case law in these states is not as … Expense reimbursement policy considerations: Set a clear written policy stating what will be reimbursed, under what conditions, and when, and have employees sign it; be as specific as possible. Your browser does not allow automatic adding of bookmarks. reimbursement of employees for allowable travel expenses incurred during travel on official state business. Illinois was the newest addition this year. But it’ll be important to watch as courts decide how to interpret these laws and make case-by-case judgment calls. 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