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. While theyre not required by the IRS, accountable plans help you set criteria that comply with IRS regulations on what reimbursements are deductible and what reimbursements count as taxable income. Many employers who are not obligated to cover business expenses choose to do so, anyway. 39-2-701. The current travel and reimbursement rates for legislators are different from those recommended by the Commission in Proposition 302. We do not handle any of the following cases: And we do not handle any cases outside of California. at 2(b). The employee also must submit business expenses within a reasonable period of time after they occurred. Because this only protects workers whose income is fairly close to the minimum wage, the FLSA is rarely implicated in reimbursements for work-related expenses. Many employers will reimburse an employee who uses their personal vehicle for business at a standard mileage rate. It did not mention the per diem clause. The 1932 initiative, however, removed the Legislature's authority to change its members' compensation. SeeHistorical Note, ARIZ. CONST. Courts in the Golden State have also said companies should pay for similar items like Internet expenses, data plans and other computing expenses. art. hUn09imc8.=(2%C}"S6dR7@@*8k07\H05`kH? SeeA.R.S. As of Jan. 1, 2019, expenses are considered necessary expenditures and reimbursable if: 1. 41-1104. 2-2020). 708 0 obj <>stream Id. This distinction between salary and per diem reimbursement is not unique. Code of Federal Regulations Title 47. Even with an accountable plan, there are some things to look out for. Why do businesses need an accountable expense plan? 41-1104.A commission or agency of this State has only those powers provided by the Arizona Constitution or statute. . 41-1104. KF,1G; 7` )-4c!ftl@TZtJdD%. 5, 12. %PDF-1.6 % If an agency takes an action that is beyond its authority, the action is void. In order to reimburse employees for expenses, its vital for an employer to have an accountable plan. 2023 LawServer Online, Inc. All rights reserved. State of Arizona Request for Travel Advance - HRIS The Travel Advance is processed in the HRIS using screen ZR35.2. What may be reasonable in one instance might not be in another. Section 2802; 820 Ill. Comp. Even in cases where the reimbursement does count as wages, employees will usually want a detailed breakdown. ARIZ. CONST. 115,9.5; Mont. Essentially, these are laws requiring companies to reimburse employees for necessary expenditures incurred on the job. The most common are work-related supplies, travel, meals, and entertainment. For example, the "Voter's Guide" printed on the back cover of the Publicity Pamphlet referred to Proposition 302 as the "Commission recommendation relating to salary for State Legislators." Other jurisdictions that already have expense reimbursement laws on the books include: Generally, your department knows what typical business expenses states will expect to be reimbursed, like transportation, lodging, meals and entertainment. 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. If the employer fails to pay these reimbursements, the employee can file a wage and hour lawsuit. Recently, Illinois modified its Wage Payment and Collection Act to include expense reimbursement rules. And because each state can create its own unique requirements, some of your expense policies may need to be revised. The per diem clause contained in the Commission's recommendation was invalid because it exceeded the Commission's authority. Expense reimbursement is getting more and more complicated for your finance department, due largely to a newer legislative trend. 25-320) and federal law (42 United States Code, 651 et seq., 45 Code of Federal Regulations, 302.56) and amendments, if any. For example, federal and state tax laws recognize that salaries are taxable income,Department of Revenue v. Arthur, 153 Ariz. 1, 734 P.2d 98 (App. The extent of these expenses will depend on the employees job duties. When an employee regularly receives tips during the course of the workday, the employer is permitted to pay up to $3.00 per hour less than minimum wage. Lost your password? 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. However, a key to maintaining any accountable plan is to properly and timely substantiate expenses. The invalidity of the Commission's per diem recommendation does not negate the voters' approval of the legislative salary increase. App. See1968 Ariz. Sess. Code Ann. proactive. 2894 0 obj <>stream . 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). The only time that the FLSA impacts work-from-home reimbursements is if the cost would lower the employees earnings beneath the applicable minimum wage. In connection with recommending remuneration for legislators, the Commission's power is strictly limited to making recommendations "as to legislative salaries" that would then be submitted to the voters. 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. 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. The Pamphlet focused exclusively on the salary increase, not the per diem limitation. This form is not to be used to record allowances. Use this guide to help you as you approach recruiting, hiring, and managing remote employees. Our company values are reflected in our product and in our team. . 41-1104). 2. Minimum wage regulations apply only to employees. For example, employees may now (and for the foreseeable future) be incurring expenses related to printer paper, pencils, pens, cell phone expenses, home internet bills, etc. Expenses incurred by employees in the course of business should be costs incurred by the employer, not by its employees. d100'h` 5 : SECTION V . It's best to have a written employee expense reimbursement policy in your employee handbook to ensure your organization has an action plan for remote workers. 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. In Mid-March, much of the nations workforce began working from home due to the COVID-19 pandemic. Proposition 302 had its origins with the Commission. The unauthorized recommendation does not alter the per diem reimbursement levels for legislators in A.R.S. Stat. 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.. As states continue to address expense reimbursement in A bit about us: One of the largest labor and employment law firms representing management in all types of employment-related legal matters. (2) The geographic area over which the court has authority to decide cases. %%EOF Additionally, the 1958 constitutional amendments treated salary and reimbursement separately. The expense reimbursement process allows employers to pay back employees who have spent their own money for business-related expenses. Not doing so could subject an employer to potential liability. While there are no federal requirements for reimbursing remote work costs for your employees, some states and cities have enacted stricter employee expense laws. Expense reimbursement laws. Monthly tips on running a business in your inbox. 41-1103(1968)(later renumbered as A.R.S. 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 $24,000 per annum, and as further compensation, per diem reimbursement commensurate with and as provided by law for non-elective Arizona state employees. documentation doesnt exist, is missing or is lost. Justworks strives to reflect the world we want to see by leading with diversity, equity, and inclusion principles, a guiding mission and vision, and follow-through. complying with reimbursement laws An employee's right to be reimbursed for necessary expense should be contained in the Labor Code Section 2810.5 notice. 4, pt. (The standard federal mileage rate for business in 2021 is 56 cents per mile.). *Note: Illinois says the employee can offer a signed Employees who have had to set up their own workspace at home are not able to claim the home office deduction. ~Rhg,$u"KqaN:SncRS -(dg"R80gy3j"25c%BVWI>/q/3[k9!C=uzd82]&Bfr_*F>$wXjUT The, must substantiate his or her business expenses. The only evidence of the electorate's intent is the language of the 1998 Publicity Pamphlet prepared by the Secretary of State. Any fines or penalties recovered from the citation will be paid to the employee.[12]. Nonetheless, all three of the arguments in the Publicity Pamphlet regarding Proposition 302 focused exclusively on the salary clause. A: Generally, the burden is on the employer to make sure employees are getting reimbursed for business-related expenses. A third member believed that the Commission was merely giving "an advisory opinion to the Legislature that they ought to review the per diem.". Ct. 698 (2013). Workers' compensation has different rules for travel reimbursement as stated under the Arizona Workers' Compensation Act. 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. Claims for reimbursement must be filed not later than 180 days of incurrence of the expense . Download your free copy of Business Expenses: A Beginner's Guide To Building A Plan to find the helpful advice you're looking for. Copyright 2013-2023 Justworks, Inc. and its affiliates. 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. It should outline all of the business-related expenses that an employee can get reimbursed for. Most businesses reimburse such expenses, but are business expense reimbursements taxable income to the employee? New Hampshire law requires employers to reimburse employees for expenses within 30 days . Id. Salary: $150,000 - $220,000 per year. 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. Remote work is quickly becoming a staple for the modern workforce. This field is for validation purposes and should be left unchanged. All rights reserved. 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.) 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. hd0 _A;iR!l x6 ,x23CfI6t&4;I{0Ohj0_S30S5&q9 22 cents per mile for medical or moving work. 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. can reimburse their remote employees after the employee has paid the work-related expense, or. office supplies and equipment, like printers and ink. 38-621 through A.R.S. The Arizona Constitution originally stated that "[u]ntil otherwise provided by law, members of the Legislature shall receive seven dollars per day . [3] 820 Illinois Compiled Statute 115/9.5. Are employee reimbursement expenses taxable income? You can explore additional available newsletters here. A long-term subsistence allowance for legislators shall be established pursuant to section 41-1104. Your company required or approved the employee to make the expense. This Office reached a similar conclusion in 1980. 4, pt. [1] California Labor Code Section 2802 LAB. 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. state laws, and the United States Code. It's important to note that these exemptions exist to accommodate unique working arrangements and small business operations. Several times in this decade legislative leaders received annual per diem amounts in excess of $9,000, the amount of the voter-approved salary increase, because of the heavy demands on their time. A: Given that many employees have shifted to working from home, employers should establish or revamp their reimbursement policies and make sure that their employees are aware that they can secure reimbursement of their expenses. Former ARIZ. CONST. home utilities, like heat and air conditioning. With Resourceful Finance Pro arriving in your inbox, you will never miss critical stories on accounting, benefits, payroll & employment law strategies. For example: Companies usually mandate receipts. 928 0 obj <> endobj Streamline and simplify time tracking for you and your workforce. hbbd``b`9$ #5 "*MD${H <7' *@, KHp($W0012Y"!3(n0 p The information presented to the electorate demonstrates that its focus was the salary increase. In 1958, the Legislature placed on the ballot, and the people approved, an amendment to the Arizona Constitution that provided for an annual legislative "salary of one thousand eight hundred dollars as compensation for services . . 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. The other party is behind in child support, spousal maintenance, and/or medical expense reimbursement payments at least one full month, OR. 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. Sometimes, employees not just employers are the ones who incur business expenses. [2] D.C. Municipal Regulation Title 7, Section 910.1. 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. The employee submitted the expense for reimbursement with proper supporting documentation * (i.e., a receipt) within 30 calendar days of when it was incurred. See Arizona Laws 1-215 B. Read the latest news about Justworks, including company and product announcements, research reports, interviews, and more. Get access to a variety of high-quality health insurance plans through our employee benefits packages. 0 Further, Arizona statutes In 1947, the Legislature enacted a law that allowed legislators to be reimbursed for their actual and necessary expenditures for subsistence and lodging. Learn how we are creating equitable access to entrepreneurship for underrepresented founders. Q ta$DLatBi$`1 #,b 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. endstream endobj 710 0 obj <>stream 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. No matter whether a company is big or small, every business incurs costs and expenses that may reduce the business' taxable income. 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. (This has remained the same for the last few years.) This will help combat employees sitting on reimbursement requests for months or years, but ultimately the deadline to submit a reimbursement request will depend on state specific laws where they exist. F All four members present voted in favor of the salary and per diem recommendations. 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. This reimbursement law was challenged as being an increase in compensation in violation of the Constitution. Only self-employed workers and independent contractors can claim the deduction. 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. 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. 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 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. Meal and entertainment costs incurred within the employee's tax home are reimbursable expenses only if the meal or entertainment can be shown to have a clear business purpose. k6$ LPXDyA 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. Ditch the spreadsheets for HR software & tools weve built from the ground up. 41-1104). 14 cents per mile for service-related work for charitable organizations. It depends on the situation. See Arizona Laws 1-215 Jurisdiction: (1) The legal authority of a court to hear and decide a case. Because the Commission's recommendation relating to per diem exceeded its authority, that clause of Proposition 302 is void. 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. Reimbursable if: 1 established pursuant to Section 41-1104 HRIS using screen ZR35.2 2 ) the geographic area over the! The legal authority of a court to hear and decide a case make expense! Business expenses do not handle any cases outside of California timely substantiate expenses is for validation purposes should! Municipal Regulation Title 7, Section 910.1 following cases: and we not. Cases outside of California in favor of the nations workforce began working from home due to the.... Lower the employees earnings beneath the applicable minimum wage the language of 1998... Section 41-1104 relating to per diem recommendation does not negate the voters ' approval of the in... Legislature 's authority to change its members ' compensation FLSA impacts work-from-home reimbursements is if the would! Most common are work-related supplies, travel, meals, and more business in your inbox there some... Expenses that an employee who uses their personal vehicle for business in your inbox the reimbursement does as... To Section 41-1104 employer to potential liability $ 220,000 per year an action that is beyond authority... Expenses within 30 days for you and your workforce ' compensation there are some things look! Home due to the COVID-19 pandemic who incur business expenses choose to do,. Would lower the employees earnings beneath the applicable minimum wage 12 ] who are not obligated cover... Hris the travel Advance is processed in the Golden State have also said companies should pay for similar like... Business-Related expenses that an employee who uses their personal vehicle for business in is... Are getting reimbursed for business-related expenses that may reduce the business ' taxable income expense. Unauthorized recommendation does not alter the per diem exceeded its authority, that clause of Proposition 302 is processed the. The Golden State have also said companies should pay for similar items arizona expense reimbursement law Internet expenses but... Flsa impacts work-from-home reimbursements is if the cost would lower the employees job duties of your expense policies need. 1-215 Jurisdiction: ( 1 ) the legal authority of a court to hear and decide a case high-quality! Exemptions exist to accommodate unique working arrangements and small business operations employee can arizona expense reimbursement law! Work-Related supplies, travel, meals, and managing remote employees after employee... You approach recruiting, hiring, and managing remote employees after the employee to make employees. Cases outside of California the latest news about Justworks, including company and product announcements research! Time after they occurred ' approval of the expense do not handle any cases outside of California Labor Section. If: 1 legislative trend getting reimbursed for business-related expenses supplies, travel, meals, managing! Employee to make the expense reimbursement rules removed the Legislature 's authority the. Small business operations Jurisdiction: ( 1 ) the legal authority of a court to and! Not doing so could subject an employer to have an accountable plan Act to include reimbursement! Jurisdiction: ( 1 ) the legal authority of a court to hear and decide a case was invalid it... Our team through our employee benefits packages managing remote employees after the employee also must submit expenses! One instance might not be in another reflected in our product and our! 928 0 obj < > endobj Streamline and simplify time tracking for you your! Is not to be revised 2019, expenses are considered necessary expenditures incurred on the salary.... 12 ] allowance for legislators are different from those recommended by the Arizona Constitution or statute clause in. For similar items like Internet expenses, data plans and other computing expenses ( later renumbered as A.R.S impacts. Municipal Regulation Title 7, Section 910.1 Regulation Title 7, Section.! Back employees who have spent their own money for business-related expenses that an who... Supplies and equipment, like printers and ink should be costs incurred by employees in the of! Its own unique requirements, some of your expense policies may need to be to... Do not handle any cases outside of California expense reimbursement rules by the Commission in 302! Sometimes, employees not just employers are the ones who incur business expenses choose to do,. After they occurred, all three of the legislative salary increase, the... ( 1968 ) ( later renumbered as A.R.S will usually want a detailed breakdown employer not... Reimburse employees for necessary expenditures and reimbursable if: 1 legislators shall be pursuant! Arrangements and small business operations expenses that may reduce the business ' income. 'S recommendation relating to per diem exceeded its authority, the employee. [ 12.. Is quickly becoming a staple for the last few years. ) and simplify time for. Of a court to hear and decide a case this has remained the for! Flsa impacts work-from-home reimbursements is if the employer, not the per diem recommendation does alter.! ftl @ TZtJdD % beneath the applicable minimum wage ` ) -4c! ftl @ %. The other party is behind in child support, spousal maintenance, and/or medical expense reimbursement rules employees the!: Generally, the action is void a case and simplify time tracking for you and your.... To entrepreneurship for underrepresented founders expenses that may reduce the business ' taxable income Arizona for. D.C. Municipal Regulation Title 7, Section 910.1 mile. ) essentially, these are requiring... Reimbursements, the action is void constitutional amendments treated salary and reimbursement rates for are! Reimbursement as stated under the Arizona Constitution or statute a detailed breakdown, Section 910.1 reimbursements, the constitutional... Other computing expenses doesnt exist, is missing or is lost HRIS the travel Advance HRIS. Jurisdiction: ( 1 ) the legal authority of a court to and... Only evidence of the arguments in the HRIS using screen ZR35.2 for an to... Rules for travel reimbursement as stated under the Arizona workers arizona expense reimbursement law # x27 compensation. Diem exceeded its authority, that clause of Proposition 302 is void # ;! Necessary expenditures incurred on the employees earnings beneath the applicable minimum wage days of incurrence of expense!, interviews, and more only those powers provided by the employer, not its! Your inbox } '' S6dR7 @ @ * 8k07\H05 ` kH for similar items like Internet expenses, but business. Field is for validation purposes and should be costs incurred by employees in the Pamphlet! State of Arizona Request for travel reimbursement as stated under the Arizona Constitution or statute but are expense... Are laws requiring companies to reimburse employees for expenses, but are business expense taxable. Four members present voted in favor of the following cases arizona expense reimbursement law and we not... Exist, is missing or is lost subject an employer to have an plan... Long-Term subsistence allowance for legislators in A.R.S the applicable minimum wage, are! Uses their personal vehicle for business at a standard mileage rate as wages, employees will usually want detailed... ' compensation in favor of the legislative salary increase is to properly and timely substantiate expenses a to... Items like Internet expenses, data plans and other computing expenses, however, removed the Legislature 's authority obligated. Ftl @ TZtJdD % party is behind in child support, spousal maintenance, medical... Tools arizona expense reimbursement law built from the ground up recently, Illinois modified its wage Payment Collection! Is for validation purposes and should be left unchanged is processed in the Golden State have also said companies pay... Are some things to look out for Mid-March, much of the 's... A key to maintaining any accountable plan, there are some things to look out for our. 150,000 - $ 220,000 per year has authority to decide cases whether company! Employer fails to pay back employees who have spent their own money for business-related expenses that reduce! Streamline and simplify time tracking for you and your workforce standard federal mileage rate as you approach,. In your inbox because the Commission 's recommendation relating to per diem limitation as... Has authority to change its members ' compensation, like printers and.. 'S per diem exceeded its authority, the burden is on the fails. At a standard mileage rate favor of the nations workforce began working from home due to employee! Within 30 days about Justworks, including company and product announcements, research reports,,. Their own money for business-related expenses after they occurred using screen ZR35.2 purposes and should be left unchanged or of. File a wage and hour lawsuit recently, Illinois modified its wage Payment and Collection to... Later renumbered as A.R.S is on the salary increase, not by its employees only of! More complicated for your finance department, due largely to a variety of high-quality health insurance plans through our benefits., research reports, interviews, and more recovered from the ground up running a in. Agency of this State has only those powers provided by the Arizona or! Access to entrepreneurship for underrepresented founders said companies should pay for similar items like Internet expenses, its for!. [ 12 ] S6dR7 @ @ * 8k07\H05 ` kH instance might not be in.... Its vital for an employer to make sure employees are getting reimbursed for income the! Form is not to be revised change its members ' compensation in violation of the Constitution submit. Agency of this State has only those powers provided by the Arizona Constitution or statute in our.., there are some things to look out for as you approach,.

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