Though Illinois’s law is getting a lot of attention, it’s not the first state to act. Do I have to pay for a work uniform or buy my store’s clothes in California? *Note: Illinois says the employee can offer a signed Reimbursement of Employee Expenses. However, several states (including California, the District of Columbia, … California and five other states have enacted expense-reimbursement statutes. XIII.4.C Travel Mileage Rates. Federal law requires reimbursement only when required expenses push a worker’s earnings below minimum wage. Other states, such as Illinois, Montana, New Hampshire, North Dakota, and South Dakota, have reimbursement laws similar to California, and the law in some states is a bit vague. In fact, federal law generally allows employers to require employees to pay for many business expenses unless doing so would reduce their earnings below the minimum wage and any overtime they may be owed. The following chart summarizes state and local requirements regarding general indemnification for employees' business expenses. legislation and in court, it’s important for Finance to stay vigilant and An employee claiming he or she was not properly reimbursed would have to characterize it as a breach-of-contract claim. If they live in California, … Lost your password? Illinois , for example, requires employers to reimburse employees for all “necessary … First, double-check if your own state has any laws – or any legislation circulating that could lead to new rules in the near future. Chart cells for which there are no requirements regarding business expense indemnification are marked N/A. benefits and wage supplements (the latter including reimbursement of expenses, see Labor Law §198-c(2)) . Please press Ctrl/Command + D to add a bookmark manually. Courts in the Golden State have also said companies should pay for similar items like Internet expenses, data plans and other computing expenses. SECTION OVERVIEW AND POLICIES New York State reimburses … – I. ‘Reasonable’ expenses. Washington, DC. New York 6. 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. Sometimes, this requirement is explicit; other times, the law can be interpreted to require the reimbursement of business expenses. California courts, for example, have steadily ruled that companies should pay a reasonable percentage of employees’ personal cell phone bills if they’re used for work purposes. Such a claim would not include the potential recovery of liquidated damages and attorney’s fees, as are available under the IWPCA. Rather than simply regurgitating the day’s headlines, CFO Daily News delivers actionable insights, helping Finance execs understand what Finance trends mean to their business. In instances where the state has made policies permanent, CCHP has incorporated those policies into this interactive map tool. documentation doesn’t exist, is missing or is lost. Current State Laws & Reimbursement Policies Search by Filter "As such, a separate policy for California employees could be drafted that explains that, based on state law, the company will reimburse certain expenses" as stated in the policy. Employer reimbursement policies may require workers to submit expense reports within a certain time frame, but the California Expense Reimbursement Law states that workers be paid for legitimate business expenses no matter when the employee submitted them and whether or not management has already approved the expenses. As states continue to address expense reimbursement in Sign up for a free CFO Daily News membership and get our newsletter! A request by a State approving agency for reimbursement under the law will be subject to the requirements of 41 CFR 8-7.5101-8 as to “Equal Opportunity”. The trick to securing greater T&E compliance, Rooting out folks who don’t belong on your health plan: A 6-point dependent audit checklist, 3 costly misconceptions about biz email compromise, Collecting via email: 4 must-make moves in your subject line, 5 Tough-to-spot signs that an invoice is fake, 120 Proven Communications Tips for Today’s CFO, Handling Nonexempt Employee Pay: Stay Compliant and Avoid DOL Audits, T&E Best Practices: Complete Guide to Ensure Compliance, Payroll Best Practices: 4 Ways to Save Time and Money, Innovative Communications Strategies: An Email Case Study, A 5-part Framework for Successful Workplace Communications. What counts as “necessary” creates a huge and costly exposure, as your company could potentially have to pay for a lot more. The federal Fair Labor Standards Act requires that employees earn at least the minimum wage net of any necessary business expenses they incur to do their jobs. The request will be accompanied by the proposed plan of operation and the specific duties and responsibilities of all personnel for which reimbursement of salaries and travel expense … Federal law does not require employers to reimburse employees for expenses incidental to carrying on the employer's business. Though Illinois’s law is getting a lot of attention, it’s not the first state to act. Your company required or approved the employee to make the expense. The materials and information included in the XpertHR service are provided for reference purposes only. Which states are at the forefront of this legislative Enter your username and password below to log in. Recently, Illinois modified its Wage Payment and Collection Act to include expense reimbursement rules. But if you work in Illinois, state law now says employees can provide “a signed statement” if they lose a receipt. State labor codes and employee reimbursement As we have reported over the past several years, California's labor code in Section 2802 requires employers to reimburse all "necessary expenditures and losses" incurred as a part of an employee's job responsibilities… New York is one of only a handful of states that has an explicit statute directed at employer reimbursement. Montana 5. Therefore, all commissions paid to the employees here, whether wage commissions or expense commissions, must be considered “wages” as that term is used in Article 6 of the Labor Law. Prior to the amendment, expense reimbursements were not addressed in the IWPCA and its regulations. Reimbursement Obligations. California’s Labor Code Section 2802 normally requires employers to reimburse employees for “reasonable” and “necessary” expenses incurred while performing their job duties. It’s also a good idea to make sure others involved in T&E (your A/P staffers, expense report approvers, etc.) reimbursement of employees for allowable travel expenses incurred during travel on official state business. Expense reimbursement policy considerations: Set a clear written policy stating what will be reimbursed, under what conditions, and when, and have employees sign it; be as specific as possible. Such expenses can include office supplies, cell phone and Wi-Fi service, printer and printing supplies and other equipment. Expense retorts: … You’ll want to proactively account for these business expenses in your T&E budget to stay on track financially and prevent issues. The rest is up to states and individual employers. As a result, employers reasonably took the position that expense reimbursements were not “wages” and thus were not covered by the IWPCA. Pennsylvania, and 7. You’ll need to decide how to address and communicate any changes companywide. They are not intended either as a substitute for professional advice or judgment or to provide legal or other advice with respect to particular circumstances. CFO Daily News, part of the SuccessFuel Network, provides the latest Finance and employment law news for Finance professionals in the trenches of small-to-medium-sized businesses. For example: Companies usually mandate receipts. But it’ll be important to watch as courts decide how to interpret these laws and make case-by-case judgment calls. (1) It should be noted that only the actual or reasonably approximate amount of the expense is excludable from the regular rate. 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