General Instructions. Publicity Pamphlet at 159. California courts, for example, have steadily ruled that companies should pay a reasonable percentage of employees personal cell phone bills if theyre used for work purposes. . This is why a good employee expense reimbursement policy can be handy. {KmT8(PI[I_,WH#R If an employer does not have an accountable plan in place, then IRS Publication 15 states: Payments to your employee for travel and other necessary expenses of your business under a nonaccountable plan are wages and are treated as supplemental wages and subject to the withholding and payment of income, social security, Medicare, and FUTA taxes.. 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). Further, Arizona statutes Reimbursement for travel expenses in the State of Arizona applies only to public employees and officers, public institution employees, board members, or any other agency of the state. Many employers will reimburse an employee who uses their personal vehicle for business at a standard mileage rate. 0 We do this with a simple and friendly platform, expert support from real people when its needed, and access to corporate-level benets that ensure people feel secure and valued. T5`(N[pTgV The Legislature retains authority to set its own rates of reimbursement for necessary expenses. Former ARIZ. CONST. If the requested file does not load in a new window, click here. Beginning January 1, 2020, the minimum wage in Arizona rose to $12 per hour. It should be noted that what constitutes reasonable is a fact specific exercise and that employers should approach each employee reimbursement request as such. Additionally, the 1958 constitutional amendments treated salary and reimbursement separately. First, double-check if your own state has any laws or any legislation circulating that could lead to new rules in the near future. When employees receive an expense reimbursement, typically they won't be required to report such payments as wages or income. Substantiation: The employee must substantiate his or her business expenses by providing the employer with evidence of the amount, time, place, and business purpose of the expense. If housing or meals are provided, the reimbursements may be less than, and cannot exceed, the lodging and meal and incidental expense reimbursements pursuant to subsection C of this section. gV+(8 For more information about the legal concepts addressed . Most businesses reimburse such expenses, but are business expense reimbursements taxable income to the employee? Please complete the form below and we will contact you momentarily. It did not mention the per diem clause. If an employer knows that an employee will regularly incur a certain business-related/work-related expense, it can choose to increase that employees salary to cover the costs of those expenses. 949 0 obj <>/Encrypt 929 0 R/Filter/FlateDecode/ID[<6BDF1CF33331E94D9CD43616C7FC6BA5><61B2D104DCFA2B4EB4BD935421B87E8D>]/Index[928 203]/Info 927 0 R/Length 109/Prev 84083/Root 930 0 R/Size 1131/Type/XRef/W[1 2 1]>>stream Stat. 2-2020). 41-1104). This is a recent change in tax law. All rights reserved. Nonetheless, all three of the arguments in the Publicity Pamphlet regarding Proposition 302 focused exclusively on the salary clause. If an agency takes an action that is beyond its authority, the action is void. Kendall v. Malcolm, 98 Ariz. 329, 334, 404 P.2d 414, 417 (1965). . *Note: Illinois says the employee can offer a signed Other states (like Alaska and Arkansas) require reimbursement only if equipment purchased by employees for work-related purposes cannot be used during normal social activities of the employee or if the purchase/expense would bring the employees compensation below minimum wage. (8 Alaska Admin Code Section 15.165; Code of Arkansas Rules and Regs., 010-14-107(B).). (Cal. 2, 22. Code Ann. A. Not doing so could subject an employer to potential liability. Because the Commission's recommendation relating to per diem exceeded its authority, that clause of Proposition 302 is void. 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. The voters did not intend this result when they passed Proposition 302. When the Commission on Salaries for Elective State Officers ("Commission") recommended changing legislative"per diem"rates, it acted beyond its statutory power to recommend changing legislative"salaries." 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. 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). Streamline and simplify time tracking for you and your workforce. Separation of Duties. Though Illinoiss law is getting a lot of attention, its not the first state to act. Very helpful with any questions and concerns and I can't thank them enough for the experience I had. hbbd``b` Check out our online talks on topics that matter most when protecting your business and taking care of your team. Lodging expenses; meal and incidental expense reimbursement and long-term subsistence allowance; items covered by reimbursement; amount predetermined by department of administration. A third member believed that the Commission was merely giving "an advisory opinion to the Legislature that they ought to review the per diem.". Wed love to meet them. Justworks helps businesses with their benefits, payroll, and everything else they need to take care of their team. the cost of a business cell phone so they do not have to use their personal cell phone. %PDF-1.6 % If the employee leaves his or her job, they may have to return what they bought to their employer. 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 Commission also recommended that per diem paid to legislators be commensurate with that provided for non-elective state employees. k6$ LPXDyA IRS Publication 535, Business Expenses, states the following: To be deductible, a business expense must be both ordinary and necessary. Youll want to proactively account for these business expenses in your T&E budget to stay on track financially and prevent issues. In this review, we followed up on the recommendations from our prior reports, Reports 17-306 and 19-302, You can explore additional available newsletters here. QhK Courts in the Golden State have also said companies should pay for similar items like Internet expenses, data plans and other computing expenses. 38-624. The voters approved Proposition 302 effective at the beginning of the next regular legislative session. 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. The arguments did not mention the per diem clause. Indiana Petition for Waiver of Reinstatement Fee, CFR > Title 4 > Chapter I > Subchapter A - Personnel System, U.S. Code > Title 2 > Chapter 11 - Citizens' Commission On Public Service and Compensation, U.S. Code > Title 39 > Part II - Personnel, U.S. Code > Title 5 - Government Organization and Employees, Florida Statutes 112.532 - Law enforcement officers' and correctional officers' rights, Florida Statutes > Chapter 110 - State Employment, Florida Statutes > Chapter 111 - Public Officers: General Provisions, Florida Statutes > Chapter 112 - Public Officers and Employees: General Provisions, Texas Civil Practice and Remedies Code Chapter 108 - Limitation of Liability for Public Servants, Texas Government Code > Title 6 - Public Officers and Employees, Texas Government Code > Title 8 - Public Retirement Systems, Texas Local Government Code > Title 5 - Matters Affecting Public Officers and Employees, Texas Vernon's Civil Statutes > Title 109 - Pensions. (2) The geographic area over which the court has authority to decide cases. 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. Make sure that you understand and follow the applicable laws in the states where you have employees. The director of the department of administration shall also establish policies and procedures for claiming 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. Under the 2005 Code the educator's expense deduction was scheduled to expire on December 31, 2005, as discussed in TIRs 05 . Monthly tips on running a business in your inbox. Covering work-from-home expenses has become a major concern since the Covid-19 pandemic has pushed many employees into remote work. Justworks strives to reflect the world we want to see by leading with diversity, equity, and inclusion principles, a guiding mission and vision, and follow-through. Telecommunication 47.73.3701 Reimbursement under the Reimbursement Expansion Act Minimum wage regulations apply only to employees. Implement an Accountable Reimbursement Plan. 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. The California Labor Commissioners Office can also cite the employer for violating the law. However, a key to maintaining any accountable plan is to properly and timely substantiate expenses. A: Generally, the burden is on the employer to make sure employees are getting reimbursed for business-related expenses. To comply with state law (Arizona Revised Statutes (A.R.S. The minutes of the Commission's December 17, 1997 meeting demonstrate that the Commission intended that the salary clause be severable from the per diem clause. Learn more about our compliance support. 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. He has been featured on CNN, Good Morning America, Dr Phil, The Today Show and Court TV. legislation and in court, its important for Finance to stay vigilant and Copyright 2013-2023 Justworks, Inc. and its affiliates. 62 (a)(2) and (c)(2); 1.62-2(c)(4). hYmo6z( $iXmA?xz9>6R./F1eQ#) F%L0Fh\"@&2"``g*BJhDiZXb When an employer pays for home office equipment, though, it is often still the companys property. 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 employees. These states are: The requirements in these states are not all the same, however. KF,1G; 2806 0 obj <> endobj Code of Federal Regulations Title 47. For example, as demands on the Legislature have increased in recent years, legislative leaders have found it necessary to spend more time working at the Legislature than ever before. With Resourceful Finance Pro arriving in your inbox, you will never miss critical stories on accounting, benefits, payroll & employment law strategies. P)%{u2 m@rD ( Dyph. 14-10709 Reimbursement of expenses Universal Citation: AZ Rev Stat 14-10709 (2016) 14-10709. Review SAAM . It depends on the situation. For all of these reasons, the legislative salary increase is valid, but the attempt to alter legislative per diem reimbursement in not. App. 1986); 26 U.S.C. [5] Massachusetts General Law Chapter 149, 148A and Fraelick v. PerkettPR, Inc., 83 Mass. 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. This reimbursement law was challenged as being an increase in compensation in violation of the Constitution. The employee also must submit business expenses within a reasonable period of time after they occurred. D.C. Municipal Regulation Title 7, Section 910.1, Massachusetts General Law Chapter 149, 148A, Fraelick v. PerkettPR, Inc., 83 Mass. documentation doesnt exist, is missing or is lost. Under the Fair Labor Standards Act ("FLSA"), there is no direct expense reimbursement requirement. SeeA.R.S. B. art. Building an expense plan will save employers time, confusion, and stress. 1= ( Its also a good idea to make sure others involved in T&E (your A/P staffers, expense report approvers, etc.) Our mission is to help entrepreneurs and businesses grow with confidence. SeeHistorical Note, ARIZ. CONST. endstream endobj 709 0 obj <>stream A long-term subsistence allowance for legislators shall be established pursuant to section 41-1104. In 1947, the Legislature enacted a law that allowed legislators to be reimbursed for their actual and necessary expenditures for subsistence and lodging. . 61 (a)(1), whereas payments such as per diem that are intended to reimburse an employee for expenses incurred on behalf of the employer, are generally considered to be nontaxable. Thats where employee expense reimbursement comes in. It's important to note that these exemptions exist to accommodate unique working arrangements and small business operations. As mentioned, these new laws may require your department to tweak its current T&E policies and practices to align with state-specific rules. 2, 1. 2. Employee benefits, payroll, HR, and compliance all in one place with 24/7 support. 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. Premier client service, as outlined in the firm's Client Pledge, is one of the firm's top priorities and a cornerstone of its core values. Often, an employer will be able to deduct those reimbursements, but the deduction amount may be limited. 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. Keep expense reimbursement separate from regular wages. Mr Shouse has been recognized by the National Trial Lawyers as one of the Top 100 Criminal and Top 100 Civil Attorneys. If housing or meals are provided, the reimbursements may be less than, and cannot exceed, the lodging and meal and incidental expense reimbursements provided for pursuant to subsection C. You're all set! 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 . In Minnesota, for example, employees only have to be compensated for certain business expenses at the end of their employment. The Pamphlet focused exclusively on the salary increase, not the per diem limitation. hd0 _A;iR!l x6 ,x23CfI6t&4;I{0Ohj0_S30S5&q9 Legislative Salaries & Per Diem Reimbursement (Proposition 302), 48th Annual Peace Officers Memorial Service, Elder Abuse Information and Training Guide, Data Breach Notification Form Individuals. The best practice is to reimburse an employee for a necessary business-related expense even if an employer is not made aware of the expense by the employee. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. The current travel and reimbursement rates for legislators are different from those recommended by the Commission in Proposition 302. 'H"2Hd) ~ K(7e[4;'^|IMw!o*m5{wp!s( `*wM9nrXnI7}@PBYr fBw. x[G_*LeV n]3U!D(n[gAU(CjOZ2e art. The next significant change occurred in 1970 with the passage of Proposition 102, which created the Commission and repealed the former constitutional provisions concerning salary and reimbursement of expenses. Under Arizona law, two provisions are severable if severance is consistent with the intent of those who created the law. This form is not to be used to record allowances. 39-2-701. Where an employee incurs expenses on his employer's behalf or where he is required to expend sums by reason of action taken for the convenience of his employer, section 7 (e) (2) is applicable to reimbursement for such expenses. Learn how we are creating equitable access to entrepreneurship for underrepresented founders. 41-1103(1968)(later renumbered as A.R.S. Detailed Instructions for the Form GAO-502, State of Arizona Employee Expense Reimbursement Form . Definitely recommend! Although previously meals and entertainment could only be deducted by the employer at 50% of the cost, the Taxpayer Certainty and Disaster Relief Act of 2020 allows a full deduction for certain business meal expenses incurred during calendar year 2021 or 2022. Laws ch. This field is for validation purposes and should be left unchanged. a printer and printing supplies, like ink cartridges and paper, office supplies, possibly including an ergonomic desk and chair, and. Claims for reimbursement must be filed not later than 180 days of incurrence of the expense . They shall also receive mileage one way, by the shortest practicable route, at the rate of twenty cents per mile." Protecting your business and taking care of your team in Proposition 302 is void ( B )..... Action is void & # x27 ; s important to note that exemptions. Arizona Revised Statutes ( A.R.S Universal Citation: AZ Rev Stat 14-10709 ( 2016 ) Review. 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PerkettPR, Inc., 83 Mass a major concern since the Covid-19 pandemic has pushed employees! 302 focused exclusively on the salary increase, not the first state Act! Is valid, but are business expense reimbursements taxable income to the employee also must submit business in... And Copyright 2013-2023 justworks, Inc., 83 Mass major concern since the Covid-19 pandemic pushed... The Today Show and court TV severance is consistent with the intent of those created! Though Illinoiss law is getting a lot of attention, its not the first state to Act Statutes (.., 010-14-107 ( B ). ). ). ). ). ). ). ) )! Commission also recommended that per diem exceeded its authority, the action is void the laws. Wage regulations apply only to employees cartridges and paper, Office supplies, possibly including ergonomic. Is why a good employee expense reimbursement and long-term subsistence allowance ; items covered by reimbursement ; amount predetermined department! Employers should approach each employee reimbursement request as such, they may to., its important for Finance to stay on track financially and prevent issues grow confidence... California Labor Commissioners Office can also cite the employer for violating the law new! May be limited and follow the applicable laws in the Publicity Pamphlet regarding Proposition 302 in! Rose to $ 12 per hour < > endobj Code of Federal regulations 47. Plan will save employers time, confusion, and stress pushed many employees into remote work form GAO-502 state. Should approach each employee reimbursement request as such attention, its important for Finance to stay vigilant and Copyright justworks... Of the expense 83 Mass c ) ( 2 ) and ( c ) ( later renumbered as.... 302 effective at the end of their team c ) ( 4 ). ) )... A standard mileage rate they shall also receive mileage one way, by the Commission in Proposition 302 at! With their benefits, payroll, and everything else they need to care! Timely substantiate expenses but the attempt to alter legislative per diem exceeded its authority, that clause of 302. [ gAU ( CjOZ2e art for these business expenses within a reasonable period of time after they occurred our talks. Be handy Federal regulations Title 47 GAO-502, state of Arizona employee expense reimbursement requirement is valid but..., good Morning America, Dr Phil, the 1958 constitutional amendments treated salary and reimbursement separately consistent with intent! Are getting reimbursed for their actual and necessary expenditures for subsistence and lodging may. Compensated for certain business expenses in your T & E budget to stay track. Lot of attention, its important for Finance to stay vigilant and Copyright 2013-2023 justworks, Inc. and its.. Experience I had employers time, confusion, and compliance all in one place with support. Commissioners Office can also cite the employer to make sure employees are getting reimbursed for their actual and necessary for! Employee reimbursement request as such helpful with any questions and concerns and I ca n't thank them enough for experience... Has authority to set its own rates of reimbursement for necessary expenses reimbursement and long-term subsistence ;...