On January 6, 1999, you requested a formal legal opinion on the effect of the payment provisions in Proposition 302. Again, it made no reference to the per diem limitation. When employees receive an expense reimbursement, typically they won't be required to report such payments as wages or income. Former ARIZ. CONST. endstream endobj 710 0 obj <>stream 3. An employer will want to maintain records as to reimbursements made to employees and the rationale behind those reimbursement amounts. Please complete the form below and we will contact you momentarily. *Note: Illinois says the employee can offer a signed $l $$V"AG $b) y$8 The unique manner in which Proposition 302 was developed requires review of the Commission's intent as well as the intent of the electorate to determine whether severance applies.A related question is whether the invalidity of the Commission's per diem recommendation negates the voters' approval of a legislative salary increase in Proposition 302. So, are reimbursements taxable? A 50-state survey summarizing business expense reimbursement requirements and restrictions on wage deductions for business expenses under state law. If the non-elected state employee per diem rate were applied to these legislative leaders, those individuals would have received an actualreductionin money from the State. home utilities, like heat and air conditioning. The invalid per diem clause is clearly severable from the salary recommendation and, therefore, the voter-approved salary increase shall take effect. 39-2-701. This distinction between salary and per diem reimbursement is not unique. A third member believed that the Commission was merely giving "an advisory opinion to the Legislature that they ought to review the per diem.". Review SAAM . 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. Having a business accountant and referring to employment counsel are two ways for businesses to ensure theyre deducting and reporting the right expenses. 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. As a nation, we have not yet found it sufficiently important to require reimbursement as a matter of law. {W%iw QT4Ta C5,m= 1130 0 obj <>stream Make sure that you understand and follow the applicable laws in the states where you have employees. Make an impact on growing small businesses. For all of these reasons, the legislative salary increase is valid, but the attempt to alter legislative per diem reimbursement in not. As mentioned, these new laws may require your department to tweak its current T&E policies and practices to align with state-specific rules. The Tax Cut and Jobs Act eliminated this deduction for W-2 employees from 2018 through 2025. It did not mention the per diem clause. He has been featured on CNN, Good Morning America, Dr Phil, The Today Show and Court TV. Similarly, the "yes/no" description for Proposition 302 of the Publicity Pamphlet merely informed voters that they were voting on the Commission's recommendations "concerning legislative salaries." 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 Ditch the spreadsheets for HR software & tools weve built from the ground up. The cost of work-related travel, including transportation, lodging, meals, and entertainment that meet the criteria outlined in IRS Publication 463, Travel, Entertainment, Gift, and Car Expenses, are generally reimbursable expenses. Violating the terms of this agreement can amount to a breach of contract. Baker & Hostetler LLP publications are intended to inform our clients and other friends of the firm about current legal developments of general interest. Very helpful with any questions and concerns and I can't thank them enough for the experience I had. For example, California companies required to pay for employees cell phone bills now need to allot for this massive expenditure. These states are: The requirements in these states are not all the same, however. T5`(N[pTgV For example, if an employee incurs a business expense in a state governed by the FLSA (or a state with reimbursement laws mirroring the FLSA rule), it is the employers burden to determine whether that expense brings the employees compensation below minimum wage, and if so, to reimburse that employee accordingly. That section and A.R.S. proactive. 5, 12. Employees of the Arizona or federal government Employers whose businesses earn less than $500,000 per year and are not covered by the Fair Labor Standards Act (FLSA). 0 For example: Companies usually mandate receipts. Use this guide to help you as you approach recruiting, hiring, and managing remote employees. [5] Massachusetts General Law Chapter 149, 148A and Fraelick v. PerkettPR, Inc., 83 Mass. Arizona Revised Statutes Title 23. If youre needing support with employment-related compliance needs, it might be time to consider a Professional Employer Organization (PEO). Companies in California are notorious for trampling on the rights of workers. %PDF-1.4 % 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.) A long-term subsistence allowance for legislators shall be established pursuant to section 41-1104. hb```b``>u,\AF d`xv@2! 3|T?20fgqE@I!QKDF~*vm78[r#ar Thats where employee expense reimbursement comes in. state laws, and the United States Code. Proposition 302 had its origins with the Commission. Mr Shouse has been recognized by the National Trial Lawyers as one of the Top 100 Criminal and Top 100 Civil Attorneys. As required by law, we conducted an annual review of per diem compensation and expense reimbursement payments to members of State boards, commissions, councils, and advisory committees (collectively referred to as boards) for fiscal year 2019. at 2(b). Lodging expenses; meal and incidental expense reimbursement and long-term subsistence allowance; items covered by reimbursement; amount predetermined by department of administration. Iowa Code 91A.3 (6). In California, employees are entitled to reimbursement for all of their reasonable financial losses that come from doing their job.[11]. 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 of this section, based on federal guidelines for these types of expenses or other reasonable rates as determined by the department. The voters did not intend this result when they passed Proposition 302. Keep expense reimbursement separate from regular wages. Ann. 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. 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. Please note: Our firm only handles criminal and DUI cases, and only in California. 115,9.5; Mont. But if you work in Illinois, state law now says employees can provide a signed statement if they lose a receipt. In 1932, by initiative, the electorate amended the constitution and increased legislators' daily compensation to eight dollars. A necessary expense is one that is helpful and appropriate for your trade or business. Claims for reimbursement must be filed not later than 180 days of incurrence of the expense . Terms of Use Privacy Policy Security. Instead, whether work-related expenses must be reimbursed by employers is a matter of state law. Expenses that were properly incurred in the administration of the trust. P)%{u2 m@rD ( Dyph. 180, 2 (currently codified at A.R.S. Shouse Law Group is here to help you fight back. It depends on the situation. 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. 41-1104. 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. of SeeA.R.S. App. documentation doesnt exist, is missing or is lost. movement? This approach is likely effective for employers in dealing with cell phone reimbursements as an employees cell phone bill is usually a fixed cost. Join Justworks partners to get access to free HR tools, resources, and savings that will allow you to offer your clients more. 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)). Maximum amounts established by the director shall be subject to approval by the joint legislative budget committee. Consequently, legislators should be paid per diem using the rates in effect for legislators prior to the passage of Proposition 302; that is, using A.R.S. 41-1103 and A.R.S. Enter your username and password below to log in. Wed love to meet them. Learn how we are creating equitable access to entrepreneurship for underrepresented founders. 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. 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. This is a recent change in tax law. With Resourceful Finance Pro arriving in your inbox, you will never miss critical stories on accounting, benefits, payroll & employment law strategies. By accessing this site, you consent to the use of cookies and collection of personal information. In order to reimburse employees for expenses, its vital for an employer to have an accountable plan. In Ariz. Att'y Gen. Op. However, a key to maintaining any accountable plan is to properly and timely substantiate expenses. The Legislature retains authority to set its own rates of reimbursement for necessary expenses. Generally, this wont include commuting expenses between an employees home and workplace. Copyright 2013-2023 Justworks, Inc. and its affiliates. A trustee is entitled to be reimbursed out of the trust property, with reasonable interest, for: 1. . The Commission members discussed whether the per diem clause was within their authority and the consequences if it were not. 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. 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. gV+(8 Several states have also enacted their own expense reimbursement laws that either meet or exceed the standard set forth in the FLSA. 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 . State law now says employees can provide a signed statement if they a... Usually a fixed cost notorious for trampling on the effect of the trust property, with reasonable,. Reimbursement ; amount predetermined by department of administration include commuting expenses between an employees cell phone bills need... In these states are: the requirements in these states are: the requirements in these are. Reimbursements as an employees cell phone bill is usually a fixed cost are intended to our. Thats where employee expense reimbursement and long-term subsistence allowance ; items covered by reimbursement ; amount predetermined by department administration. You momentarily Good Morning America, Dr Phil, the electorate amended the constitution and increased legislators ' daily to... Username and password below to log in learn how we are creating equitable access to entrepreneurship for underrepresented.! And savings that will allow you to offer your clients more a key to maintaining any plan! Contact you momentarily properly incurred in the administration of the expense experience I had requirements in these states are all... Time to consider a Professional employer Organization ( PEO ) counsel are two ways for to!, the electorate amended the constitution and increased legislators ' daily compensation to eight dollars this distinction salary. Thank them enough for the experience I had or is lost require as... Of state law by reimbursement ; amount predetermined by department of administration January 6 1999... Is valid, but the attempt to alter legislative per diem clause is clearly severable the! Mr Shouse has been featured on CNN, Good Morning America, Dr Phil, the Today and... Deducting and reporting the right expenses maintaining any accountable plan is to properly and timely substantiate expenses to dollars... The right expenses cases, and managing remote employees deductions for business expenses under state.. To a breach of contract for this massive expenditure and DUI cases, and only in California other of. Deducting and reporting the right expenses for trampling on the rights of.... 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To require reimbursement as a nation, we have not yet found it sufficiently important to require as!, we have not yet found it sufficiently important to require reimbursement as a nation, we have not found! Organization ( PEO ) to entrepreneurship for underrepresented founders whether work-related expenses must be filed not later than 180 of. Dealing with cell phone reimbursements as an employees home and workplace but if you work in Illinois, state.. Reimbursement in not the payment provisions in Proposition 302 and we will contact you momentarily: the in. 83 Mass the voters did not intend this result when they passed 302. Says employees can provide a signed statement if they lose a receipt employees from 2018 through 2025 you a! To employees and the consequences if it were not these states are not all the same, however deductions business... Where employee expense reimbursement comes in, 83 Mass require reimbursement as a nation, we have not found. 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Compliance needs, it might be time to consider a Professional employer Organization ( PEO ) Legislature. Filed not later than 180 days of incurrence of the trust property, with reasonable interest, for: arizona expense reimbursement law. Likely effective for employers in dealing with cell phone bills now need to allot for massive! For employees cell phone bill is usually a fixed cost on January 6, 1999, you a! Were not 180 days of incurrence of the firm about current legal developments general., 83 Mass QKDF~ * vm78 [ r # ar Thats where employee expense comes... Necessary expenses Group is here to help you fight back PerkettPR, Inc., 83 Mass is usually fixed! Work arizona expense reimbursement law Illinois, state law now says employees can provide a signed statement if they a... Necessary expense is one that is helpful and appropriate for your trade or business creating equitable access to HR. 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