The consequences to the employer for violations are severe, including penalties, interest and attorneys fees (subsections (b), (c) and (d).). As the pandemic continues, many employers are attempting to adapt to their workforce's new normal, which may include a continuation of their current remote model or the implementation of a hybrid work model. 2021), Reconceptualizing the Importance of Place (Mar. Employers should also reassess their employee reimbursement policies in order to ensure they remain compliant. Examples of benefits or wage supplements listed in the statute include, but are not limited to, the following: Is your employer refusing to compensate you for business-related expenses that you paid out of your pocket? Representation in business, real estate, construction, home care, trust and probate litigation and general civil litigation. Whether youre a health or retirement broker, a corporate franchise leader, or a product or service company, Paycor can help take your business to the next level. Paycors leadership brings together some of the best minds in the business. (b) All awards made by a court or by the Division of Labor Standards Enforcement for reimbursement of necessary expenditures under this section shall carry interest at the same rate as judgments in civil actions. Whether the employees have cell phones. %PDF-1.5 According to Abacus' How to Create a Cell Phone Reimbursement Policy, they suggest "$50 for low business use and $75 for high business use." Also, here's a handy calculator to help you identify how much you should be spending on mobile stipends. xZYoF~`Cc6 l`{s!qIdC3~^",G_}upn:o5[Q"G_}=~~dy3]+kXoslcnD;Ow]}E>=gvGqE.Y2_|-~`W;3j}LiG{&E};= r-~qN83r_QE;$IA*e% 'eU1{ aISsr]3Kd.(-zEf_c1b?\{yGoH+^QdaGIz)!%gg]rF0q= Not only does our interpretation prevent employers from passing on operating expenses, it also prevents them from digging into the private lives of their employees to unearth how they handle their finances vis--vis family, friends and creditors. Get real-time analytics to HR & Payroll data. That means that employers in D.C. are also generally not required to reimburse employees for the cost of tools and supplies necessary to perform their job where an employee's remote work arrangement is entirely voluntary, meaning they are neither required nor encouraged to continue to work remotely. Get expert advice and helpful best practices so you can stay ahead of the latest HR trends. If you want specific legal advice about your particular legal issues, or if you want to create an attorney-client relationship, you need to retain the Law Offices of Ron A. Stormoen by a signed written retainer agreement. A: An employer is likely not responsible for the entire personal cell phone bill of an employee simply because that employee uses his/her personal cell phone for work purposes. To show liability under section 2802, an employee need only show that he or she was required to use a personal cell phone to make work-related calls, and he or she was not reimbursed. See whats new today. Page Content These days, most employers can't keep pace with technology as nimbly as their workforce can. Read how HR solutions offer technology that is key to success. 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. An agency may adopt agency-specific standards and . A: Generally, the burden is on the employer to make sure employees are getting reimbursed for business-related expenses. In most cases, the costs wouldn't be considered necessary if an employee chooses to work remotely. Under the Fair Labor Standards Act ("FLSA"), there is no direct expense reimbursement requirement. consumable supplies required in the course of that employment., for all that he necessarily expends or loses in direct consequence of the discharge of his duties as such or of his obedience to the directions of the employer., An employee who incurs expenses in connection with his or her employment and at the request of the employer, except those expenses normally borne by the employee as a precondition of employment, which are not paid for by wages, cash advance, or other means from the employer, shall be reimbursed for the payment of the expenses within 30 days of the presentation by the employee of proof of payment.. When employees pay for necessary business expenses, their employers must promptly pay the employee expense reimbursement. Lets say a pizza company only reimburses its delivery drivers $1 per delivery for the mileage and gas used to make the delivery. Our customers are our heroes. The trickiest areas are cell phones and internet given that employees are now working from home because they cannot go into the office, as opposed to perhaps at their convenience. Where the practice is widespread (or just alleged to be) the claims can be brought on a class-wide basis. When an employee must return a portion of his wages, directly or indirectly, to his employer, this kickback can violate the FLSA. Only authorized expenses by the employer must be reimbursed. New York, 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. 98% of respondents in Buffers 2023 Remote Work Survey of 3000 would like to work remotely for the rest of their careers (Buffer). Our popular webinars cover the latest HR and compliance trends. Control costs and mitigate risk with accurate timekeeping. Reimbursement is required even if the employee does not actually incur extra expenses as a result of his or her use. Our goal is to ensure that all New York workers are being paid the proper wages, do not have their right to a meal period or day of rest violated, and to uphold New York . Baker McKenzies global Employment & Compensation team of over 700 lawyers in 45 countries has been ranked Band 1 by Chambers Global for Employment law for 13 consecutive years. See how were taking the right STEP toward inclusion and belonging. Remote-firstorganizations can make big savings on real estatebut are they required to instead pay for remote employees expenses? You can give all employees the same allowance or give certain employee classes (such as full-time) or employees in certain states a larger allowance. The reimbursement would have otherwise been paid as wages. The delivery drivers could argue that based on the average distance they drive to deliver pizzas, their employer should be paying them a greater mileage reimbursement amount. Explore our product tour to see how. RF%|h3H c"40JOwF}\5Y UGUn}:xIdRu :I8U xys B Jir:TxwO1;ZL&)[G&+E,NU; xwM1]XQ\D@T>i/i;h>%a%011m}D@9KrS'd04 dr@qi$oM0wwx&]je;Su`~O|>_z|D~QG General Email: info@utilityproject.org Weve been helping our New York City clients fight for their right to adequate compensation for over thirty years. Cochran v. Schwan's Home Services, Inc. (2014) 228 Cal. Get The 2022 New Mexico Employment Law Handbook (Printable PDF) today! This entry does not create an attorney-client relationship. You'll simply approve these amounts up to their eligible allowance. You should note that if you do use a personal phone for business use, you may be able to record a trade or business expense for your personal tax reporting purposes. 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. Cochran v. Schwan's Home Serv., Inc., 228 Cal. Engage new hires with onboarding and control costs with timekeeping. Offering a stipend can be an attractive benefit to prospective employees, especially when they are weighing their options and comparing benefits packages. employees' reimbursement of the City for personal use of mobile phones and of long distance telephone services. We help you stay updated on the latest payroll and tax regulations. 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. Paycors integrated expense management software streamlines the process for employees to input qualified expenses, for frontline managers to approve them, and for payroll administrators to arrange reimbursement. . expiration of such state disaster emergency declaration, New York State Medicaid will reimburse telephonic assessment, monitoring, and evaluation and management services provided to members in cases where face- to-face visits may not be recommended and it is appropriate for the member to be evaluated and managed by telephone. Necessary expenses include internet access and phone bills for remote workers. While there are no federal requirements for reimbursing remote work costs for your employees, some states and cities have enacted stricter employee expense laws. San Diego, CA, 92108 No, it is not required but it is highly recommended. Currently, 11 states, the District of Columbia, and Seattle, Washington, have laws about reimbursing employees for necessary work-related expenses. App. 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. Schedule a call with a personalized benefits advisor today to see how employee stipends can help your organization offer remote work benefits. This shift raises the all-important question of who foots the bill for these expenses going forward. 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. Employers must reimburse all necessary expenses, including those incurred by the employer's direction or during the discharge of their normal job duties. New York; Pennsylvania, and; . Drive engagement with talent development and career management. Remedies available for retaliation. Damages, of course, raise issues that are more complicated. (Id. While there is some discretion the employer can exercise in determining the amount of reimbursement (such as actual expenses and the reasonableness of the employees choice: i.e., was the employee required to use their own phone), the following language by the court shows the standard is still reasonable reimbursement (which means if the issue went to court a judge or jury would determine reasonableness, which means an employer should be careful in this area). For example, if a pay deduction results in an employees hourly rate becoming below the federal minimum wage, the employer has violated the FLSA. See Cochran v. Schwans Home Serv., Inc. See how our solutions help you reduce risk, save time, and simplify compliance management. This can be tricky, however, as the employer must be sure to document/identify the amount of compensation attributable to the expense actually incurred. Your policy should be part of, or referenced in, your telecommuting policy. Its probably safe to say that remote work is the new normal for many Americans. Amounts recovered pursuant to this section shall be paid to the affected employee. Many even purchased new home office setups, including desks and chairs. Again, the key is that employees are reimbursed a reasonable percentage of their phone bill. Rather, an employer should assess on a case-by-case basis the expenses incurred by an employee and make a reasonable determination as to what the proper level of reimbursement is for the expense claimed. Determining if you will need to pay taxes on expense reimbursements depends on whether you use an accountable or nonaccountable plan. While working from home raises a myriad of issues (e.g., data privacy and security, health and safety, employee engagement, and more), this post focuses on expense reimbursements related to telecommuting. Paycor has the right defenses in place to protect your data. With over 30 years of employment law experience, Lipsky Lowe LLP has a proven track record of advocating for clients in all areas of employment law, including employee expense reimbursements. Reduce risk, save time, and simplify compliance management. Only a small percentage of companies surveyed 20% in 2020 reported sharing the costs of remote work with employees (Owl Labs). Lab. It works like this: you set up a monthly benefit allowance for your employees. Distribute the policy to employees, and remember to inform new employees when they are hired. 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