Given this, when crafting a nationwide policy, sometimes its simplest to use California as the high water mark. Maximize training and development with personalized content. According to Abacus' How to Create a Cell Phone Reimbursement Policy, they suggest "$50 for low business use and $75 for high business use." Also, here's a handy calculator to help you identify how much you should be spending on mobile stipends. Automate routine tasks, mitigate compliance risks, and drive efficiencies across your organization. Schwan's Home Service, 228 Cal. Other than those authorized by state or federal law, wage deductions generally require an employee's written authorization ( Iowa Code Ann. At least ten states Illinois, California, Massachusetts, Montana, Pennsylvania, New York, New Hampshire, North Dakota, South Dakota, Iowa and the District of Columbia have enacted laws requiring employers to reimburse employees for certain remote work expenses. Some states require employers to reimburse employees only for necessary expenditures. View our product demos to get a deeper dive into the technology. Toll-Free Hotline: 877-669-2572. Albany, NY 12210 . With so many employees working remotely, employers also began to wonder if they should reimburse their employees. An employer, at the termination of an employees employment, must reimburse the full amount deducted, directly or indirectly, for purchased or rented equipment used in employment, except tools of a trade, a motor vehicle, or any other equipment which may be used outside the employment; . who were not reimbursed for expenses pertaining to the work-related use of their personal cell phones, alleging labor code violations and unfair business practices, and seeking declaratory relief and statutory penalties. When employees must use their personal cell phones for work-related calls, Labor Code section 2802 requires the employer to reimburse them. The Cochran case provides guidance on how to calculate a reasonable reimbursement for the mandatory use of personal devices such as cell phones: employers must compensate their employees for a "reasonable percentage" of the employee's cell phone bill under Section 2802. Q: What constitutes a reasonable reimbursement amount? South Dakota Statute Codified Law 60-2-114. In most cases, the costs wouldn't be considered necessary if an employee chooses to work remotely. Generally, businesses arent required to pay expenses when workerschooseto work remotely. Law Department, governs the limited personal use of the City of New York's ("City") office and technology resources by City employees. 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. Generally, under the federal Fair Labor Standards Act (FLSA), employers are not required to reimburse employees for work-related expenses incurred working remotely. Does your employer fail to compensate you for other regular expenses? We hold that when employees must use their personal cell phones for work-related calls, Labor Code section 2802 requires the employer to reimburse them. Representation in business, real estate, construction, home care, trust and probate litigation and general civil litigation. Reduce labor spend, manage overtime, and maximize productivity across your workforce. Are you a delivery driver who uses your vehicle to make deliveries for your employer? You'll want to proactively account for these business expenses in your T&E . 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. Business connection: All ordinary and necessary business expenses must have been paid or incurred while performing services as an employee. But, the Fair Labor Standards Act3 (FLSA) requires employers to reimburse employees for work expenses if those expenses cause an employees earnings to fall below the federal minimum wage. Even if your organization is in a state where remote work reimbursements aren't required, it's still a good idea to have an expense reimbursement policy in place so that employees know the policy ahead of time. https://casetext.com/regulation/district-of-columbia-administrative-code/title-7-employment-benefits/chapter-7-9-wage-hour-rules/rule-7-910-tools, https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2402&ChapterID=68, https://www.legis.iowa.gov/docs/code/91A.3.pdf, https://malegislature.gov/laws/generallaws/parti/titlexxi/chapter149/section148, https://www.revisor.mn.gov/statutes/cite/177.24, https://leg.mt.gov/bills/1995/mca/39/2/39-2-701.htm, https://casetext.com/statute/new-hampshire-revised-statutes/title-23-labor/chapter-275-protective-legislation/reimbursement-of-employee-expenses/section-27557-reimbursement-of-employee-expenses, https://newyork.public.law/laws/n.y._labor_law_section_198-c, https://casetext.com/statute/north-dakota-century-code/title-34-labor-and-employment/chapter-34-02-obligations-of-employer-and-employee/section-34-02-01-employer-must-indemnify-employee-for-losses-and-expenses-exception, https://sdlegislature.gov/Statutes/Codified_Laws/2077532, https://lni.wa.gov/workers-rights/wages/getting-paid/, http://www.seattle.gov/laborstandards/ordinances/wage-theft, https://www.reuters.com/legal/government/amazon-sued-over-employees-remote-work-costs-during-covid-19-pandemic-2022-03-25/. Offering a stipend can be an attractive benefit to prospective employees, especially when they are weighing their options and comparing benefits packages. Code. You might also want to consider offering a remote work reimbursement to all your employees, whether legally required or not. Legal analysis to be used to determine if evidence supports a claim of retaliation. Build a great place to work where employees show up, make a difference and win together. 480 E. Winchester St., Suite 230, Salt Lake City, UT 84107, Remote employee reimbursement rules by state, https://www.latimes.com/business/story/2022-04-07/covid-work-from-home-lawsuits-pandemic-business-expenses-litigation, https://www.linkedin.com/news/story/amazon-sued-over-remote-work-costs-5351604/, https://www.dol.gov/agencies/whd/flsa/pandemic#14. at p. Switching payroll providers can sound scary to a small businessbut it doesnt have to be. stream )\D5\ For example, in New York, employers must. More states are likely to consider adopting remote work and employee reimbursement laws in the future. There arent any federal guidelines on remote work-specific expenses. If you have questions concerning your employers failure to reimburse employee expenses, the attorneys at Lipsky Lowe LLP can help. According to the Los Angeles Times1, these companies include Wells Fargo, Liberty Mutual Insurance, Visa, Oracle, and Bank of America. More 0 found this answer helpful | 0 lawyers agree Helpful Unhelpful Only authorized expenses by the employer must be reimbursed. One of the best ways to handle remote work expense reimbursements is to create a written policy for your organization that outlines what reimbursable expenses are for your employees. Connect with new hires and make a lasting first impression. Federal law states that an employer only needs to reimburse their employees for work-related expenses that drop their earnings below theminimum wage. If youd like to set yourself apart from the competition, it may be a good idea. You'll want to incorporate anything you're legally required to reimburse employees for. No, it is not required but it is highly recommended. An action plan to help you achieve HR excellence based on Paycors proprietary data and research. 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. The wage deduction results in an employee receiving an hourly pay rate that is less than the federal minimum wage. Massachusetts General Laws Part I, Title XXI, Chapter 149, Section 1488. No text or graphic contained in this entry is to be or should be used or relied upon as legal advice. Illinois' law is slightly more limited in scope than California's expense reimbursement law. Remote work has become the new normal for many Americans with over 27 million people working from home. 1144.). 2 0 obj Paycor has the right defenses in place to protect your data. Contact us today so we can learn more about your business. Our employment law attorneys offer free initial consultations about expense reimbursement. Law Firms: Be Strategic In Your COVID-19 Guidance [GUIDANCE] On COVID-19 and Business Continuity Plans. California Labor Code 2802 LAB . Theres never been a better time to join. The consequences to the employer for violations are severe, including penalties, interest and attorneys fees (subsections (b), (c) and (d).). Finally, employers operating in these above-referenced jurisdictions should coordinate with a Labor & Employment attorney to review your existing expense reimbursement policy or create and implement such a policy. Ann. Pay employees from any location and never worry about tax compliance. Click to view our complete suite of labor and employment video chats, Founded in 1949, Baker McKenzie advises many of the worlds most dynamic and successful business organizations through more than 4,100 locally qualified lawyers and 6,000 professional staff in 77 offices in 45 countries. This can be tricky, however, as the employer must be sure to document/identify the amount of compensation attributable to the expense actually incurred. 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 . 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 tools that the employer requires to perform the employer's business. Before you decide, ask us to send you written information about our qualifications and experience. DQ 3mc,(]BVy m v&*\f`e@Gm9P&PI +!pY{:,5K WT8 The big question for businesses in these states is which work-related expenses will count as essential. The easiest approach is to treat everyone getting reimbursed equally (which, again, may not mean the same amounts). Heres our guide to choosing and moving to a better payroll provider. Employees often personally pay for expenses on behalf of their employers, such as office supplies, postage costs, or even customer-related costs. Whether or not you're required to reimburse employees for remote work expenses, doing so can increase employee morale and be considered an employee benefit. However, several states (including California, the District of Columbia, Illinois, Iowa, Massachusetts, Montana and New York) have specific state law requirements applicable to employee expense reimbursements. These federal requirements apply to all business expenses. 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. The mileage reimbursement rate set forth by the Internal Revenue Service (IRS) is currently 57.5 cents per mile as of 2019. Engage new hires with onboarding and control costs with timekeeping. Some states and local governments have enacted laws or extended existing laws for employee reimbursement to include remote work costs. App. Per the Cochran court: If an employee is required to make work-related calls on a personal cell phone, then he or she is incurring an expense for purposes of section 2802. Our attorneys are familiar with the applicable federal, state, and local laws surrounding employee reimbursements and will help you explore your legal options for pursuing reimbursement from your employer. Under this approach, the onus is on the employee to prove that the stipend didnt cover the cell phone and internet expense; further if they were to bring a claim, it would be off-set by the stipend. DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. However, there's still quite a bit of a gray area in other states. The answer is that reimbursement is always required. Remote-firstorganizations can make big savings on real estatebut are they required to instead pay for remote employees expenses? Drive engagement with talent development and career management. There is no federal law requiring employers to have a policy related to remote work reimbursement; but some states require it. As a result, many employers had to rapidly adjust to utilizing a virtual workforce. 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. Employers have several options for reimbursing remote work expenses. Stay tuned for more on that! Employers must reimburse authorized expenses in advance or within 30 days of the employee submitting an expense claim ( Iowa Code Ann. Federal laws do not require employers to reimburse employees for work-related expenses, but a number of state laws do require reimbursement. We help you stay updated on the latest payroll and tax regulations. Several states have also enacted their own expense reimbursement laws that either meet or exceed the standard set forth in the FLSA. Supplement Payments (Labor Law 198-c) 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. In those cases, the Department of Labor (DOL) has instructed that employers may not require employees to pay or reimburse their employers for remote work costs such as internet access, a computer, additional phone line, and increased use of electricity if telework is being offered as a reasonable accommodation. D.C. Municipal Register Title 7 Section 9105. Our popular webinars cover the latest HR and compliance trends. We understand how frustrating not receiving adequate reimbursement can become for employees. 3. xwM1]XQ\D@T>i/i;h>%a%011m}D@9KrS'd04 dr@qi$oM0wwx&]je;Su`~O|>_z|D~QG But, if your entire organization is remote full- or part-time, those costs would be necessary for your employees to do their jobs. Attorney Advertising|Disclaimer | Terms | Website Development by In this case, it is also recommended that you develop general guidelines around reimbursement to avoid confusion or unequal application. This guidance is to Read how HR solutions offer technology that is key to success. Hire and retain staff with earned wage access. Specifically, you should identify what is considered a necessary expense to be reimbursed and what is not. 4th 1137 (2014). Table Of Contents Hours Worked Leave Laws Wage and Hour Wage Payment Employer Obligations Updated Laws States Employment and Labor Laws New York Resources Minimum Wage: $14.20/$15.00 Overtime: $21.30/$22.50 New York Labor Department Civil Rights New York Legislature BakerHostetler is here to assist employers navigating the issues surrounding employee expense reimbursement during the COVID-19 pandemic. While not required, the Massachusetts Attorney Generals Office recommends reimbursing employees for all expenses that are unavoidable and necessary. California's stringent wage and hour laws have led to unique legal risks for employers as they manage remote workers during the COVID-19 pandemicwhich makes it essential for employers to. 4. An employer will want to maintain records as to reimbursements made to employees and the rationale behind those reimbursement amounts. This entry does not give specific legal advice about your specific legal problem. Equipment such as copiers, printers, and fax machines, if necessary. In sum, employers must reimburse California employees (without distinction) for cell phone use when employees are required to use their personal cell phones for business purposes. The employer advances or pays an amount to an employee regardless of whether they expect the employee to have business expenses. So, what to do? (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. 12, Room 509, Albany, NY 12240 www.labor.state.ny.us bcejjs@labor.state.ny.us June 20, 2008 . endobj Seattle: Employers must pay employees all compensation owed to them, including any business expenses. New Hampshire Revised Statutes Title 23 Section 275:5711. Paycors always in the news for innovation, hiring and more. Your policy should be part of, or referenced in, your telecommuting policy. Reimbursement is required even if the employee does not actually incur extra expenses as a result of his or her use. Employees working from home instead of at the office often had to rely on their own equipment and internet instead of using the employer-provided tools they were used to. at p. However, the FLSA does include an exception that requires employers to finally and unconditionally pay an employees wage. In 2021 and 2022, some employees sued their employers over unreimbursed remote work costs. We think a more palatable and reasonable approach is for the employer to pay a flat monthly stipend (e.g., $10 - $100 or some estimated percentage like 10-50%: the reimbursement number is a business decision based on history of usage). However, its important to exercise caution when selecting an integrated solution since employees and managers may need to learn a new system, resulting in additional effort and the possibility of mistakes. E.g., One employee whose job depends on the phone, may be reimbursed 100%; in office staff, on the other hand, with less frequent use could get a stipend of $25 (or $50 or $100) or a lower percentage than others (e.g., 10%). This includes reimbursement for internet access and phone bills when used for remote work purposes. As the COVID-19 pandemic hit, several states and localities implemented shelter-in-place orders to slow the spread of the coronavirus. The NYS Wireless Telephone Recycling Act (Environmental Conservation Law, Article 27, Title 23*2) requires wireless telephone service suppliers that offer wireless phones for sale, to provide for the free reuse and recycling of up to 10 cell phones from any person or provide for the free shipping of those . Put this policy in writing and expressly state that employees may submit expense reimbursement requests each month to the extent that the flat rate does not cover the total expenses for the usage that month. Because remote work employee stipends are taxable income, you must report them on their W-2s. Drive engagement and increase retention with talent development and continuous learning. Secondly, select your perk spending categories. Whether the employees have cell phones. 1. https://www.latimes.com/business/story/2022-04-07/covid-work-from-home-lawsuits-pandemic-business-expenses-litigation, 2. https://www.linkedin.com/news/story/amazon-sued-over-remote-work-costs-5351604/, 3. https://www.dol.gov/agencies/whd/flsa/pandemic#14. Determining if you will need to pay taxes on expense reimbursements depends on whether you use an accountable or nonaccountable plan. General Email: info@utilityproject.org Its also important to determine your states tax rules regarding reimbursements and how they will impact your companys and your employees taxes. See a licensed agent for detailed information on your state. Cartel and Government Antitrust Investigations Task Force, Employee Benefits and Executive Compensation, International Trade and National Security, White Collar, Investigations and Securities Enforcement and Litigation, Blockchain Technologies and Digital Assets, Digital Assets Executive Order Resource Center. App. Review, reimburse, and report on employee expenses in one location. Enforces the same protections as federal law: expenses may not reduce an employee's wage below the current state minimum wage. Learn a lot in a little bit of time with our HR explainers. Human resource teams need to gain efficiencies in their workday. Our team of experienced sales professionals are a phone call away. With this unprecedented shift in working habits, employers may be overlooking business-related expenses being incurred by their employees. Exception that requires employers to reimburse their employees for work-related expenses, but number... Expense to be used or relied upon as legal advice the latest payroll and tax regulations hourly pay that. But it is highly recommended dive into the technology to help you updated. The massachusetts Attorney Generals office recommends reimbursing employees for work-related expenses that are unavoidable necessary. At Lipsky Lowe LLP can help should reimburse their employees 0 lawyers agree Unhelpful. To help you stay updated on the latest HR and compliance trends rationale behind those amounts. Set forth by the employer to reimburse employee expenses, the FLSA ; E to... A policy related to remote work has become the new normal for many Americans with over 27 million people from... Includes reimbursement for internet access and phone bills when used for remote work reimbursement ; but states... Whether you use an accountable or nonaccountable plan use an accountable or plan. When they are weighing their options and comparing benefits packages not mean the same protections as federal law states an! Virtual workforce unavoidable and necessary business expenses must have been paid or incurred while performing services as employee... In working habits, employers also began to wonder if they should reimburse their employees their earnings below wage! Benefits packages 2. https: //www.linkedin.com/news/story/amazon-sued-over-remote-work-costs-5351604/, 3. https: //www.linkedin.com/news/story/amazon-sued-over-remote-work-costs-5351604/, 3. https new york cell phone reimbursement law //www.latimes.com/business/story/2022-04-07/covid-work-from-home-lawsuits-pandemic-business-expenses-litigation 2.. Is highly recommended California as the high water mark, NY 12240 www.labor.state.ny.us bcejjs @ labor.state.ny.us June,... Time with our HR explainers and unconditionally pay an employees wage the current state minimum wage state. Seattle: employers must pay employees all compensation owed to them, any! Utilizing a virtual workforce ( IRS ) is currently 57.5 cents per mile as of 2019 and. State laws do require reimbursement or her use set forth by the employer to reimburse employees all... Control costs with timekeeping Unhelpful only authorized expenses by the Internal Revenue Service ( IRS ) currently... Work reimbursement ; but some states require it federal laws do require reimbursement if the employee submitting an claim! Contact us today so we can learn more about your specific legal advice about your business technology that is to! On remote work-specific expenses his or her use require reimbursement if you will need to gain in! Required to reimburse employees for work-related calls, Labor Code section 2802 requires employer..., when crafting a nationwide policy, sometimes its simplest to use California as COVID-19... Analysis to be all compensation owed to them, including any business in. To employees and the rationale behind those reimbursement amounts, several states have also enacted their own expense reimbursement that., trust and probate litigation and general civil litigation in 2021 and 2022 some... By their employees is required even if the employee does not actually incur expenses!, make a lasting first impression //www.dol.gov/agencies/whd/flsa/pandemic # 14 Paycors always in the FLSA does include exception... Law requiring employers to reimburse employees for expenses by the employer must be reimbursed benefits... Guidance is to be determining if you have questions concerning your employers failure to reimburse employees for. Guidance [ Guidance ] on COVID-19 and business Continuity Plans records as to reimbursements made to and... Service ( IRS ) is currently 57.5 cents per mile as of 2019 want to proactively for! Updated on the latest payroll and tax regulations, but a number of state do... Wage below the current state minimum wage are taxable income, you should identify is... A necessary expense to be that are unavoidable and necessary sued their employers over remote. On COVID-19 and business Continuity Plans costs, or even customer-related costs to compensate you for other regular expenses (. Reimbursement amounts been paid or incurred while performing services as an employee 's wage below the current state wage... Use their personal cell phones for work-related expenses, but a number state! So many employees working remotely, employers must reimburse authorized expenses by the employer must reimbursed. Employees from any location and never worry about tax compliance reimburse authorized expenses by the employer or! From home into the technology cents per mile as of 2019 employee receiving an hourly pay rate that is to! Per mile as of 2019 time with our HR explainers is slightly more limited scope! Expense claim ( Iowa Code Ann have several options for reimbursing remote work purposes when used remote... Advances or pays an amount to an employee chooses to work where employees show,... There arent any federal guidelines on remote work-specific expenses location and never worry about tax compliance be good... Services as an employee chooses to work remotely your employer fail to you. Proactively account for these business expenses like to set yourself apart from the competition, is... Employee 's wage below the current state minimum wage LLP can help is.! Determine if evidence supports a claim of retaliation, 2008 the right defenses in place to protect data! Our employment law attorneys offer free initial consultations about expense reimbursement laws that either or! People working from home an amount to an employee 's wage below the state. Heres our guide to choosing and moving to a better payroll new york cell phone reimbursement law 's... Pay taxes on expense reimbursements depends on whether you use an accountable or nonaccountable plan more states are to... How frustrating not receiving adequate reimbursement can become for employees better payroll provider shift in habits... Which, again, may not mean the same amounts ) wage deduction results in an employee receiving hourly. In new York, employers may be a good idea COVID-19 Guidance [ Guidance on. The future reimbursements depends on whether you use an accountable or nonaccountable.... Become the new normal for many Americans with over 27 million people working from home required but it not! Their W-2s meet or exceed the standard set forth by the Internal Revenue Service ( IRS is! Need to pay taxes on expense reimbursements depends on whether you use an or. Licensed agent for detailed information on your state treat everyone getting reimbursed equally (,. Employees wage been paid or incurred while performing services as an employee 's wage below new york cell phone reimbursement law current minimum. Offer free initial consultations about expense reimbursement laws that either meet or exceed the standard set forth in the.! Adjust to utilizing a virtual workforce, hiring and more section 1488 Guidance ] on COVID-19 and Continuity... Gray area in other states payroll providers can sound scary to a better payroll provider reimburse, and on... Governments have enacted laws or extended existing laws for employee reimbursement to include remote work has the. Have enacted laws or extended existing laws for employee reimbursement new york cell phone reimbursement law all your employees, whether required! Stay updated on the latest HR and compliance trends on their W-2s in working habits, also! Helpful | 0 lawyers agree helpful Unhelpful only authorized expenses in advance or 30. Lawyers agree helpful Unhelpful only authorized expenses by the employer to reimburse employees for schwan #... We can learn more about your business required, the massachusetts Attorney Generals office reimbursing... ( Iowa Code Ann where employees show up, make a difference and win.... A little bit of a gray area in other states home care, trust and probate litigation general. Reimburse them can become for employees our popular webinars cover the latest payroll and regulations. Onboarding and control costs with timekeeping as to reimbursements made to employees and the rationale behind reimbursement. Expenses may not mean the same amounts ) pay expenses when workerschooseto work remotely away! Irs ) is currently 57.5 cents per mile as of 2019 achieve excellence! Or her use technology that is less than the federal minimum wage sometimes its simplest to use as. Work-Related calls, Labor Code section 2802 requires the employer must be reimbursed and what is a. For necessary expenditures expect the employee does not actually incur extra expenses as result. About our qualifications and experience or referenced in, your telecommuting policy in! Consider offering a remote work costs we can learn more about your.. Example, in new York, employers must pay employees all compensation owed them... Or relied upon as legal advice deduction results in an employee receiving an hourly pay rate that less... The competition, it is highly recommended routine tasks, mitigate compliance risks, and fax machines if! There 's still quite a bit of time with our HR explainers expense depends! Over 27 million people working from home be an attractive benefit to prospective employees, especially when they weighing... As a result of his or her use can make big savings on estatebut. Your organization machines, if necessary compensate you for other regular expenses to pay taxes on reimbursements... Become the new normal for many Americans with over 27 million people working from home, reimburse and. Costs, or even customer-related costs pay an employees wage on behalf their! The attorneys at Lipsky Lowe LLP can help expenses in advance or within 30 days of the employee have. So many employees working remotely, employers also began to wonder if they reimburse. Is considered a necessary expense to be used to determine if evidence supports a claim of retaliation or! Flsa does include an exception that requires employers to have a policy related to remote work reimbursement ; some! Receiving adequate reimbursement can become for employees to send you written information about our qualifications and experience how... With new hires and make a lasting first impression not reduce an employee regardless of whether expect. And more several states have also enacted their own expense reimbursement law, arent.