San Diego, CA, 92108 A: 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. However, ten states (and Washington D.C.) currently have laws requiring employers to reimburse employees for certain remote work expenses: California, Washington D.C., Illinois, Iowa, Massachusetts, Minnesota, Montana, Hampshire, New York, North Dakota, Pennsylvania, and South Dakota. Employers cannot waive the right to receive a national minimum wage, either directly or indirectly. ), hotspot device or internet service usage if the following conditions are met: The agency has an established written policy detailing how the charges will be reimbursed. It is imperative for employers with employees earning wages close to the federal minimum wage, and particularly the salary thresholds, to closely monitor the expenses employees incur working remotely so that reimbursements may be made, if necessary. If providing employees reimbursements on a periodic basis, an employer should perform an analysis to ascertain an amount of reimbursement that is adequate to cover the actual expense incurred by the employee. Lets create value across your portfolio. Remote work has become the new normal for many Americans with over 27 million people working from home. When developing and implementing a policy, employees need to be treated equally in that they all need to be reimbursed for work related phone use. New York, Through The Employer Report blog, our lawyers provide legal updates and practical insights to help clients understand, prepare for and respond to the latest domestic and cross-border Labor and Employment issues affecting US and multinational employers. The way you bring a new employee in can make all the difference in how quickly they reach their potential. 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. Stock Exchanges Publish Clawback Proposals As required by Rule 10D-1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the New York Stock Exchange (the "NYSE") and Nasdaq have issued their . You might also want to consider offering a remote work reimbursement to all your employees, whether legally required or not. Generally, under the federal Fair Labor Standards Act (FLSA), employers are not required to reimburse employees for work-related expenses incurred working remotely. 2023 Paycor, Inc | Refer Paycor | Privacy Policy | 1-800-501-9462 | That answer depends on where your workforce is located. It is irrelevant whether the employee changed plans to accommodate work-related cell phone usage. 4th 1137 (2014). Equipment such as copiers, printers, and fax machines, if necessary. Pay employees from any location and never worry about tax compliance. @^_ {d1EQ2P%5{x n(,N5|_ \SfppMTn[6|4EF?F('DZnH6N},q'}l64a ux-c fp+"i+Q`p9xy#.BA%AZ94, While there is some discretion the employer can exercise in determining the amount of reimbursement (such as actual expenses and the reasonableness of the employees 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 the issue went to court a judge or jury would determine reasonableness, which means an employer should be careful in this area). Ann. Our employment law attorneys offer free initial consultations about expense reimbursement. 75 percent? Leverage AI to automate sourcing and increase candidate diversity. So, what to do? 2023 Lipsky Lowe LLP | Phone: 212-392-4772 This approach is likely effective for employers in dealing with cell phone reimbursements as an employees cell phone bill is usually a fixed cost. The Cochran court did note that the employer can engage in some calculations: In calculating the reimbursement amount due under section 2802, the employer may consider not only the actual expenses that the employee incurred, but also whether each of those expenses was necessary, which in turn depends on the reasonableness of the employee's choices. (Id. These are not typical expenses that employers would reimburse. Eliminate the stress of ACA filing with streamlined reporting. Retain and coach your workforce with career planning. The FLSA, however, is implicated if an employee's unreimbursed business expenses bring their wages below the applicable minimum wage or cut into overtime wages. As a result, many businesses are adopting automated expense management systems, which has resulted in an increase in the use of third-party providers. Streamline recruiting and hiring so you can quickly and effectively fill open positions, develop top talent, and retain your workforce. No, it is not required but it is highly recommended. Typically, you'll make reimbursement payments to your employees on their next paycheck. According to a 2022 Reuters article17, several clients of Ackermann & Tilajef have settled cases with their employers over unreimbursed remote work expenses. (c) For purposes of this section, the term necessary expenditures or losses shall include all reasonable costs, including, but not limited to, attorneys fees incurred by the employee enforcing the rights granted by this section. More 0 found this answer helpful | 0 lawyers agree Helpful Unhelpful If youve personally paid out of your pocket for your employers business expenses and havent received compensation, you may be entitled to expense reimbursement plus interest and attorney fees and costs. 3. 2023), The FTCs Proposed Rule on Non-Competes: What Employers Need to Know (Jan 2023), Employer WARN-ing: Notice Requirements to Know Before Layoffs (Jan. 2023), Employers: All Eyes on Salary and Pay Range Disclosure in US Job Postings (Dec. 2022), Cost-Cutting Considerations in the Workforce Without Layoffs (Nov. 2022), AI in Recruitment and Hiring: Checking Your Blind Spots (Oct. 2022), Labor Unions and the Workforce: Whats Trending and How to Get Out in Front (Aug. 2022), The Proliferation of Pay Transparency Laws: What US Employers Need to Know (May 2022), US, UK and EU Whistleblower Developments for Multinational Employers (Apr. Not doing so could subject an employer to potential liability. According to the Los Angeles Times1, these companies include Wells Fargo, Liberty Mutual Insurance, Visa, Oracle, and Bank of America. Read how HR solutions offer technology that is key to success. Weve been helping our New York City clients fight for their right to adequate compensation for over thirty years. Employers must reimburse employees for all necessary tools related to their scope of employment. Hire skilled nurses and manage PBJ reporting. Explore our product tour to see how. D.C. Municipal Register Title 7 Section 9105. expiration of such state disaster emergency declaration, New York State Medicaid will reimburse telephonic assessment, monitoring, and evaluation and management services provided to members in cases where face- to-face visits may not be recommended and it is appropriate for the member to be evaluated and managed by telephone. <>>> 0S],IIGV}4n ``. Notably, employers are only required to reimburse "necessary" expenses in California, so businesses that do not require or encourage employees to work remotely are not required to reimburse these expenses, as employees have the option to work in the office, absent the FLSA and ADA restrictions noted above. Read these case studies to see why. It does, however, require employers to pay their employees federal minimum wage after accounting for all costs. Employers and employees frequently inquire about whether an employer must reimburse an employee when the employee uses their personal cell phone for the employers business? This includes reimbursement for internet access and phone bills when used for remote work purposes. Our customers are our heroes. While not required, the Massachusetts Attorney Generals Office recommends reimbursing employees for all expenses that are unavoidable and necessary. Engage new hires with onboarding and control costs with timekeeping. 2021), Tying Compensation to Furthering Inclusion and Diversity Goals (Mar. App. Control costs and mitigate risk with accurate timekeeping. Differences in reimbursement can be justified based on position (and amount of usage). California, however, does have a law requiring employers to reimburse employees for business-related expenses. In order to qualify for an accountable plan, the employers reimbursement or allowance arrangement must follow all three of these rules: Since accountable plan reimbursements arent considered wages, they arent subject to taxation and are also deductible by the employer as business expenses. Transform open enrollment and simplify the complexity of benefits admin. That means that employers in D.C. are also generally not required to reimburse employees for the cost of tools and supplies necessary to perform their job where an employee's remote work arrangement is entirely voluntary, meaning they are neither required nor encouraged to continue to work remotely. Contact us today so we can learn more about your business. Re: Request for Opinion . By way of a recent amendment, the Illinois Wage Payment and Collection Act now requires employers with employees working in the State to reimburse their employees "for all necessary expenditures or losses incurred by the employee within the employee's scope of employment and directly related to services performed for the employer." Business connection: All ordinary and necessary business expenses must have been paid or incurred while performing services as an employee. Whether the employees have cell phone plans with unlimited minutes or limited minutes, the reimbursement owed is a reasonable percentage of their cell phone bills." (Cochran v. Schwan's . Posted on January 7, 2022 Federal law generally does not require employers to reimburse employees for cell phone expenses. Build a great place to work where employees show up, make a difference and win together. 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. See how were taking the right STEP toward inclusion and belonging. Of course, the courts have not defined what reasonable percentage means, but the main options are: Given the practical challenges of (1) and (2) above, and the fact that many employees have cell phones that they prefer and the even greater complexity of applying this rubric to home internet use, many employers are looking for a simpler approach. California courts have given us some guidance on which expenses would fall into the category of "necessary expenses." Are you a delivery driver who uses your vehicle to make deliveries for your employer? PHA+Q2hlY2sgeW91ciBpbmJveCBmb3IgYW4gZW1haWwgY29uZmlybWluZyB5b3VyIHN1YnNjcmlwdGlvbi4gRW5qb3khPC9wPg==, Remote Employee Reimbursement Rules by State, Massachusetts General Law Chapter 149, 148A, Paycors integrated expense management software, 5 Benefits of AI Talent Sourcing Technology for Recruiters, Get Our Customizable Employee Review Template, Boost Efficiency and Transform Your Workplace Culture with HR Technology, 10 Tips for Small Businesses Considering a Payroll Provider Switch, Onboard like a Pro: Tips for Successful Employee Integration, all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties., the cost of purchasing and maintaining any tools required of the employee in the performance of the business of the employer., all necessary expenditures or losses incurred by the employee within the employees scope of employment and directly related to services performed for the employer., Expenses by the employee which are authorized by the employer and incurred by the employee shall either be reimbursed in advance of expenditure or be reimbursed not later than thirty days after the employees submission of an expense claim.. Section 2802; 820 Ill. Comp. Labor Code section 2802, referenced by the court, governs this area [concerning reimbursement for all necessary employee expenditures or losses, not just cell phone use) and provides the backdrop for the courts opinion: (a) An employer shall indemnify his or her employee 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, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful. And never worry about tax compliance fax machines, if necessary payments to your employees on next! Phone usage engage new hires with onboarding and control costs with timekeeping ( amount... Control costs with timekeeping phone usage to consider offering a remote work reimbursement all... 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