THERES A BETTER WAY TO WORK with NYCs Commuter Benefits Law. Not timely? 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. But they must also be mindful that the more requirements they put in place for minimum home office standardssuch as minimum WiFi bandwidth, a room with a door to ensure confidentiality of calls, locking filing cabinetsthe more likely an expense incurred in complying with those standards is to be considered necessary. wages subject to income, social security, Medicare, and FUTA taxes. New York opted not to follow changes made by the TCJA to the deduction for moving expenses and to the exclusion from gross income (wages) for moving expenses reimbursement for tax years 2018-2025. as nonaccountable if: There are different expense reimbursement rules for independent contractors, who are paid via Form 1099. Watch Now! } In California, which has largely been on lockdown, all expenses "suffered" by the employee on the behalf of the employer, whether they are authorized are not, need to be reimbursed, said Michael Trust, SHRM-SCP, human resources director at Sungevity in Temecula. $("span.current-site").html("SHRM China "); Employers whose employees are covered by a collective bargaining agreement (CBA). Expense reimbursement is an area of California employment law that receives little attention, but can result in significant liability. To assist in these efforts, below, we provide a high-level summary of relevant laws, policy considerations, and best practices. This mean, "all . ", Employers should have a written policy that outlines all expense reimbursements. "It means . Due to the pandemic, employees in the US are working from home in unprecedented numbers. Your access to and use of this website is subject to additional Terms of Use. Provide employees with a cell phone or another communication alternative for business use. These expenses can include fuel costs, maintenance. Expense reimbursements can include use of . You must have JavaScript enabled to use this form. It should outline all of the business-related expenses that an employee can get reimbursed for. By adhering to this allowance, reimbursements for mileage are not taxable to the employee. In addition, Employers who get expense reimbursements wrong may end up having to compensate workers for unreimbursed expenses, plus interest, penalties, and attorneys' fees. Additional states with expense reimbursement laws include Illinois, New Hampshire, Massachusetts, Pennsylvania, Washington, D.C. and others. This includes: Federal, State, County, City, Village, Town, School district, or certain quasi-government agencies. treated as supplemental wages and subject to taxes. The expense reimbursement process enables an employer to pay funds back to an employee for business-related expenses they paid for with their own money. In California, reimbursement also may extend to the use of an employee's car for work purposes, Samuel said, but not to expenses that employees would incur under normal circumstances. 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 . This is why a good employee expense reimbursement policy can be handy. Some reimbursement laws require employees to II. 0000008675 00000 n Robert Lewis, HR director at Peak Access Solutions in Plant City, Fla., said that prior to the pandemic, his company would give office employees necessary supplies, but anything for home use came out of the employee's pocket. As of 2021, the IRS set that rate at $0.56 per mile or about $280 on a 500-mile round trip. 0000007980 00000 n The information on MEL is not legal advice, but general information related to legal issues commonly encountered. Through social By way of example, some of these statesnotably California and Illinoishave strict reimbursement laws. else if(currentUrl.indexOf("/about-shrm/pages/shrm-mena.aspx") > -1) { 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. 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. The Tax Cuts and Jobs Act, which went into effect in 2018, took away a package of tax breaks, including a write-off for unreimbursed employee expenses. Employees often use their personal resources to pay for expenses necessary to carry out their employment. Pandemic or no, reimbursement policies for work-related employee expenditures "should already be on employers' radar," according to Lenore Horton, an employment attorney with FisherBroyles . New OSHA Guidance Clarifies Return-to-Work Expectations, Trump Suspends New H-1B Visas Through 2020, Faking COVID-19 Illness Can Have Serious Consequences, Crafting Benefits for Onsite vs. Offsite Employees, After Amazon Announces Return-to-Office Policy, Workers Push Back. There must be receipts and invoices that document the nature and amount of the expenditures. maintained. See IRS Publication 535 to learn more about business expenses. Learn more about how to use and manage your travel card. 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. submit reimbursable expenses within 30 days of incurring the expense. policy should include the following: Employees What's the Fate of the Federal Contractor Vaccine Mandate after SCOTUS's Stay of the OSHA ETS? $('.container-footer').first().hide(); 2000-2023 Neil Klingshirn. Kylie Ora Lobell is a freelance writer in Los Angeles. Do not disclose personal identifying information except to the extent necessary to Ask MEL a question. Are companies legally required to reimburse employees for work-related expenses? 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. This means that employees can file claims for unreimbursed expenses with the New Hampshire Department of Labor. Employers must reimburse an employee for all necessary expenditures incurred in direct consequence . While most states don't have reimbursement laws, "it's up to the employer to do the right thing," said Laura Handrick, an HR professional at Choosing Therapy in Brooklyn, N.Y. She said that many employers are saving money on office overhead, such as facilities maintenance and electricity, while employees are working from home. Members can get help with HR questions via phone, chat or email. Employers should take proactive steps and revise policies on employee reimbursements now to avoid class action litigation down the line. Most employee expenses will be reimbursed through the Travel and Expense module in the Statewide Financial System (SFS). Federal law excludes some types of employees from the requirement to receive one and one-half times their regular rate of pay. Imagine that after weeks of working remotely due to COVID-19, you return to your office only to discover a stack of papers on your desk in a folder titled "requests for reimbursement." You peer through the contents and find cell phone bills, a receipt for a $750 printer, a bank statement with the account fees highlighted, a clothing store shipping invoice with $49.95 of expedited shipping . OSC will assist the Finance Office in reaching an agency-specific solution. The Department of Consumer Affairs (DCA) enforces the law and coordinates the Citys public education and outreach campaign to help employers and employees know their responsibilities and rights when it comes to commuter benefits. 0000020567 00000 n The IRS determines reimbursements on an employee-by-employee The law is based on the Internal Revenue Code that authorizes pre-tax commuter programs, which benefit employers and employees. Trust said that most employers, including Sungevity, are reimbursing cellphone and Internet expenses on a proportional basis. a nonaccountable plan, any reimbursement or other allowance arrangement is 420 Lexington Avenue, Suite 1830, Illinois was the newest addition this year. If you havent revisited your employee expense reimbursement policies recently, some business expenses may no longer qualify for an accountable plan. Example: Mario is an employee forced to work at home due to the coronavirus for two months. Weve been helping our New York City clients fight for their right to adequate compensation for over thirty years. increasing citizen access. Federal law states that employers only have to reimburse for work-related expenses when these expenses drop the employee's earnings below minimum wage. Keep in mind that if one employee fails to meet the requirements of the 0000019915 00000 n that are reimbursable. However, the "Google Translate" option may help you to read it in other languages. Virtual & Washington, DC | February 26-28, 2023. 2. If there's an . Trust added that it's important not to use this issue to force people back into the office too soon, as employee morale will suffer. This form is used for reimbursements or expenses not already covered by a Non-Employee Travel (NET) card. Federal law doesn't require employers to reimburse their employees for work expenses. A: No. 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 . They are reported Stay tuned for more on that! Regardless of the specific avenue for ensuring the employer does not improperly shift business expenses to its employees, all employers should be aware of their obligations to reimburse and review and update their expense reimbursement policies to take into account the applicable law and the expenses their newly-expanded remote workforce might incur. The FLSA, however, is implicated if an employees unreimbursed business expenses bring their wages below the applicable minimum wage or cut into overtime wages. 0000002059 00000 n How can a failure to reimburse employees result in minimum wage violation? 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