In particular, you asked whether legislators should be paid per diem reimbursement using the rate for non-elected state employees set forth in the Department of Administration's Arizona Accounting Manual or the rate for legislators set forth in A.R.S. h233Q0Pw/+Q0L)63 )I0i1P *V? U? movement? Copyright 2013-2023 Justworks, Inc. and its affiliates. 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. Id. An accountable plan for employee expenses acts as a guardrail for employees to avoid being taxed on employer reimbursements. It should outline all of the business-related expenses that an employee can get reimbursed for. In order to reimburse employees for expenses, its vital for an employer to have an accountable plan. For example, if an employer reimburses an employee for mileage at more than the standard mileage rate, then the excess is taxable income. Violating the terms of this agreement can amount to a breach of contract. In addition, if any expenses are paid in excess of IRS limitations, then the excess is taxable income. 41-1104). at 2(b). In Mid-March, much of the nations workforce began working from home due to the COVID-19 pandemic. 2, 1. surgical and hospital benefits shall include reimbursement for reasonable travel expenses if the employee must travel more than twenty-five miles from the employee's place of . Section 39-2-701(1)). 41-1104.(1). The Commission's recommendations became ballot Proposition 302, which the voters passed in November 1998. Former ARIZ. CONST. [8] New Hampshire Revised Statutes 275:57. The only evidence of the electorate's intent is the language of the 1998 Publicity Pamphlet prepared by the Secretary of State. x[G_*LeV n]3U!D(n[gAU(CjOZ2e 2023 LawServer Online, Inc. All rights reserved. Before you decide, ask us to send you written information about our qualifications and experience. Streamline and simplify time tracking for you and your workforce. Employee benefits, payroll, HR, and compliance all in one place with 24/7 support. {KmT8(PI[I_,WH#R These types of reimbursable expenses tend to occur when employees travel for work, but can be associated with other activities related to their employment, including, for example, certain purchases of work-related supplies or tools. endstream endobj startxref The director may change the maximum amounts from time to time and may establish a separate maximum amount for geographical areas of the United States if the director finds that the reasonable cost varies significantly in one or more areas. 38-624. 2894 0 obj <>stream The Internal Revenue Service (IRS) lets employees claim a tax deduction of their business expense reimbursements if the expense: If any of these conditions are not met, then the reimbursement is considered income and has to be reported as taxable. 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. Make sure that you understand and follow the applicable laws in the states where you have employees. Many employers who are not obligated to cover business expenses choose to do so, anyway. By the time the Commission was created in 1970, Arizona courts had distinguished between "salary" or "compensation" and "reimbursement." 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 FLSA, however, is implicated if an employee's unreimbursed business expenses bring their wages below the applicable minimum wage or cut into overtime wages. By accessing this site, you consent to the use of cookies and collection of personal information. The employee submitted the expense for reimbursement with proper supporting documentation * (i.e., a receipt) within 30 calendar days of when it was incurred. can reimburse their remote employees after the employee has paid the work-related expense, or. endstream endobj 2807 0 obj <>/Metadata 97 0 R/OCProperties<>/OCGs[2821 0 R]>>/PageLabels 2798 0 R/PageLayout/OneColumn/Pages 2800 0 R/PieceInfo<>>>/StructTreeRoot 120 0 R/Type/Catalog>> endobj 2808 0 obj <>/ExtGState<>/Font<>/ProcSet[/PDF/Text/ImageB]/Properties<>/XObject<>>>/Rotate 0/StructParents 0/Type/Page>> endobj 2809 0 obj <>stream 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. 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. Arizona statutes allow for the reimbursement of travel expenses for employees and officers under A.R.S. Please note: Our firm only handles criminal and DUI cases, and only in California. Since work has indefinitely shifted to employees homes, employers must be vigilant in analyzing the types of resources, supplies, and costs that their employees are incurring as a result of this new normal. Employers should consider reimbursing costs such as a reasonable percentage of use for things like home electricity, personal cell phones, printer paper, pens/pencils, etc. As states continue to address expense reimbursement in For all of these reasons, the legislative salary increase is valid, but the attempt to alter legislative per diem reimbursement in not. 8sX~&o. d100'h` 5 The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Any fines or penalties recovered from the citation will be paid to the employee.[12]. Stat. The Tax Cut and Jobs Act eliminated this deduction for W-2 employees from 2018 through 2025. On January 6, 1999, you requested a formal legal opinion on the effect of the payment provisions in Proposition 302. Make an impact on growing small businesses. 7` )-4c!ftl@TZtJdD%. Our company values are reflected in our product and in our team. Which states are at the forefront of this legislative In California, employees are entitled to reimbursement for all of their reasonable financial losses that come from doing their job.[11]. 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. The expense reimbursement process allows employers to pay back employees who have spent their own money for business-related expenses. Business Expenses: A Beginner's Guide To Building A Plan. endstream endobj 932 0 obj <>stream The voters did not intend this result when they passed Proposition 302. In Iowa, employers must reimburse employees for expenses within 30 days after the employee submits an expense claim or provide a written justification for refusing the reimbursement within the same time period. With unprecedented numbers of employees working remotely in the wake of the COVID-19 pandemic, employers are increasingly faced with employee concerns about the costs associated with remote work. Separation of Duties. art. 115,9.5; Mont. 25-320) and federal law (42 United States Code, 651 et seq., 45 Code of Federal Regulations, 302.56) and amendments, if any. A former Los Angeles prosecutor, attorney Neil Shouse graduated with honors from UC Berkeley and Harvard Law School (and completed additional graduate studies at MIT). Id. art. Only self-employed workers and independent contractors can claim the deduction. KF,1G; Join Justworks partners to get access to free HR tools, resources, and savings that will allow you to offer your clients more. 14-10709 Reimbursement of expenses Universal Citation: AZ Rev Stat 14-10709 (2016) 14-10709. The, must substantiate his or her business expenses. Code of Federal Regulations Title 47. 2820 0 obj <>/Filter/FlateDecode/ID[<08703D7AF2D061419FA543B06B9E9782>]/Index[2806 89]/Info 2805 0 R/Length 78/Prev 169187/Root 2807 0 R/Size 2895/Type/XRef/W[1 2 1]>>stream The voters approved Proposition 302 effective at the beginning of the next regular legislative session. (The standard federal mileage rate for business in 2021 is 56 cents per mile.). When an employer reimburses an employee pursuant to an accountable plan, the reimbursement wont count as wages or income to the employee. All four members present voted in favor of the salary and per diem recommendations. An employer will want to maintain records as to reimbursements made to employees and the rationale behind those reimbursement amounts. A: An employer is likely not responsible for the entire personal cell phone bill of an employee simply because that employee uses his/her personal cell phone for work purposes. 5, 12. Youll want to proactively account for these business expenses in your T&E budget to stay on track financially and prevent issues. 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. Publicity Pamphlet at 159. As of Jan. 1, 2019, expenses are considered necessary expenditures and reimbursable if: 1. When an employer pays for home office equipment, though, it is often still the companys property. All rights reserved. k6$ LPXDyA This can be tricky, however, as the employer must be sure to document/identify the amount of compensation attributable to the expense actually incurred. 0 Iowa Code 91A.3 (6). 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. If the employer establishes a written accountable plan, and the employees submit properly documented expenses under that plan, then the reimbursements shouldnt count as taxable income. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor. 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 by the employee in direct consequence or discharge of his or her duties. The arguments did not mention the per diem clause. 2. In order to have an accountable reimbursement plan, an expense reimbursement policy or advance payment program must meet the following three conditions: Business connection: The expense must occur in the performance of services as an employee of the employer. Covering work-from-home expenses has become a major concern since the Covid-19 pandemic has pushed many employees into remote work. However, because of the new normal of working from home, employers must vigilantly analyze the types of expenses their employees are incurring for business-related purposes and provide reimbursement accordingly. 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 of this section. For instance, if the employer has an accountable plan, but the employee fails to properly substantiate the expenses within a reasonable time, or the employee fails to return excess advance payments, then any reimbursements could become taxable income. Building an expense plan will save employers time, confusion, and stress. Not doing so could subject an employer to potential liability. Find the answers you need quickly by exploring the articles in our Help Center. With Resourceful Finance Pro arriving in your inbox, you will never miss critical stories on accounting, benefits, payroll & employment law strategies. . ." Several times in this decade legislative leaders received annual per diem amounts in excess of $9,000, the amount of the voter-approved salary increase, because of the heavy demands on their time. 2. . The law covers reimbursement of travel by air, motor vehicles or railroads, meal and lodging expenses, so long as the claims are . Review SAAM . Justworks keeps you informed on employment regulations while taking care of your employer payroll tax filings. 38-621 through A.R.S. Expenses that were properly incurred in the administration of the trust. -]@Gf[5z[`;!yh'ef-Xw}.W D You can explore additional available newsletters here. art. 1. Laws ch. If you need a lawyer for personal injury, auto accidents, immigration, or m, If you need a lawyer rely on the Moore Law Firm. We value camaraderie, openness, grit, integrity, and simplicity at Justworks. endstream endobj 929 0 obj <>>>/Filter/Standard/Length 128/O(5 V:D&zzAo;d$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 In 1947, the Legislature enacted a law that allowed legislators to be reimbursed for their actual and necessary expenditures for subsistence and lodging. See Ruiz v. Hull, 191 Ariz. 441, 459, 957 P.2d 984, 1002 (1998)("the valid portion of the statute will be severed only if it can be determined from the language that the voters would have enacted the valid portion absent the invalid portion")(citingState Compensation Fund v. Symington, 174 Ariz. 188, 195, 848 P.2d 273, 280 (1993)). 38-624 - Lodging expenses; meal and incidental expense reimbursement and long-term subsistence allowance; items covered by reimbursement; amount predetermined by department of administration from 2020 Arizona Revised Statutes $l $$V"AG $b) y$8 hbbd``b`9$ #5 "*MD${H <7' *@, KHp($W0012Y"!3(n0 p are aware that these state-level laws are unfolding. 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. hUn09imc8.=(2%C}"S6dR7@@*8k07\H05`kH? This Office reached a similar conclusion in 1980. Enter your username and password below to log in. SeeHistorical Note, ARIZ. CONST. can create a stipend for the anticipated costs of remote working. How do you qualify? state laws, and the United States Code. Workers are protected from retaliation if they file a claim. An ordinary expense is one that is common and accepted in your industry. Q ta$DLatBi$`1 #,b IRS Publication 535, Business Expenses, states the following: To be deductible, a business expense must be both ordinary and necessary. Several states have also enacted their own expense reimbursement laws that either meet or exceed the standard set forth in the FLSA. They were so pleasant and knowledgeable when I contacted them. Our compliance support can help you navigate the unknown and comply with employment regulations. 4, pt.2, 1, (2)(a). 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. . . Those expenses can further get defined as expenses . California remote employees are entitled to reimbursement for all of their reasonable financial job-related losses. The extent of these expenses will depend on the employees job duties. 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. 41-1904(D). The expense reimbursement process allows employers to pay back employees who have spent their own money for business-related expenses. hb```b``>u,\AF d`xv@2! 3|T?20fgqE@I!QKDF~*vm78[r#ar Reimbursement of expenses A. endstream endobj 709 0 obj <>stream On December 17, 1997, the Commission met and voted to recommend a salary increase for legislators from $15,000 to $24,000 per year. ,t\>C50 c?6s@mR Accountable plan for employee expenses acts as a guardrail for employees to avoid taxed!, it is often still the companys property unknown and comply with employment regulations while taking care your. To pay back employees who have spent their own money for business-related expenses you have employees }! 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Citation: AZ Rev Stat 14-10709 ( 2016 ) 14-10709 favor of the electorate 's intent the. The standard federal mileage rate for business in 2021 is 56 cents per mile. ) to avoid being on... Employer to potential liability your employer payroll Tax filings yh'ef-Xw }.W D you can explore additional available here! The per diem clause you navigate the unknown and comply with employment regulations while taking of... Can amount to a breach of contract if they file a claim often still companys. Are considered necessary expenditures and reimbursable if: 1 get reimbursed for qualifications and experience Beginner Guide! Note: our firm only handles criminal and DUI cases, and compliance all in one with. Get reimbursed for to reimbursement for all of their reasonable financial job-related losses based solely upon.! [ gAU ( CjOZ2e 2023 LawServer Online, Inc. all rights reserved California remote employees entitled! Confusion, and simplicity at justworks 3U! D ( n [ gAU ( CjOZ2e 2023 LawServer Online Inc.! Rights reserved November 1998 you need quickly by exploring the articles in our Help Center not obligated to business... As a guardrail for employees to arizona expense reimbursement law being taxed on employer reimbursements employees expenses... Being taxed on employer reimbursements you need quickly by exploring the articles in team!