arizona expense reimbursement law

h233Q0Pw/+Q0L)63 )I0i1P *V? U? 'H"2Hd) ~ K(7e[4;'^|IMw!o*m5{wp!s( `*wM9nrXnI7}@PBYr fBw. Lastly, you know these new business expense reimbursement laws could impact your budgets going forward. 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).). A bit about us: One of the largest labor and employment law firms representing management in all types of employment-related legal matters. He has been featured on CNN, Good Morning America, Dr Phil, The Today Show and Court TV. On January 6, 1999, you requested a formal legal opinion on the effect of the payment provisions in Proposition 302. 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! 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. In order to qualify for an accountable plan, the employer's reimbursement or allowance arrangement must follow all three of these rules: Business connection: All ordinary and necessary business expenses must have been paid or incurred while performing services as an employee. Notwithstanding any other law, the maximum long-term subsistence allowance does not apply to legislators. (The standard federal mileage rate for business in 2021 is 56 cents per mile.). 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. Learn how we are creating equitable access to entrepreneurship for underrepresented founders. Code. An employer will want to maintain records as to reimbursements made to employees and the rationale behind those reimbursement amounts. Mr Shouse has been recognized by the National Trial Lawyers as one of the Top 100 Criminal and Top 100 Civil Attorneys. 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. Expense reimbursements or benefits received by a parent in the course of (: = . endstream endobj startxref Generally, this wont include commuting expenses between an employees home and workplace. 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. $l $$V"AG $b) y$8 For all of these reasons, the legislative salary increase is valid, but the attempt to alter legislative per diem reimbursement in not. You will receive a link to create a new password via email. The arguments did not mention the per diem clause. Our mission is to help entrepreneurs and businesses grow with confidence. Thus, while the Commission's recommended $24,000 annual salary for legislators that the voters approved is valid, its attempt to alter the per diem reimbursement rate for legislators is not. A second member expressed his view that, if the Commission and the public were in error in adopting the per diem clause, the Legislature could adjust the per diem in any way it wanted. [2] D.C. Municipal Regulation Title 7, Section 910.1. Id. d100'h` 5 hd0 _A;iR!l x6 ,x23CfI6t&4;I{0Ohj0_S30S5&q9 . With this unprecedented shift in working habits, employers may be overlooking business-related expenses being incurred by their employees. (This has remained the same for the last few years.) J+cQR! Persons eligible to receive travel expenses, Lodging expenses; meal and incidental expense reimbursement and long-term subsistence allowance; items covered by reimbursement; amount predetermined by department of administration, Out-of-state travel; approval; exemptions, Authorization for certain out-of-state travel by state employees, 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. 41-1104). 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. 1= ( 708 0 obj <>stream General Instructions. k6$ LPXDyA D.C. Municipal Regulation Title 7, Section 910.1, Massachusetts General Law Chapter 149, 148A, Fraelick v. PerkettPR, Inc., 83 Mass. How do you qualify? Many employers who are not obligated to cover business expenses choose to do so, anyway. Our robust time tracking tool and user-friendly HR platform integrate seamlessly so timekeeping is effortless for you and your team. See1968 Ariz. Sess. Youll want to proactively account for these business expenses in your T&E budget to stay on track financially and prevent issues. Legislative reimbursement continued to be governed by then A.R.S. Reimbursement of expenses A. To comply with state law (Arizona Revised Statutes (A.R.S. Ann. 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 Commission's recommendations became ballot Proposition 302, which the voters passed in November 1998. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor. They shall also receive mileage one way, by the shortest practicable route, at the rate of twenty cents per mile." C. The director of the department of administration shall establish maximum amounts for reimbursement for lodging and meal and incidental expenses or long-term subsistence incurred pursuant to subsections A and B of this section, based on federal guidelines for these types of expenses or other reasonable rates as determined by the department. This is a recent change in tax law. A.R.S. 0 It should be noted that what constitutes reasonable is a fact specific exercise and that employers should approach each employee reimbursement request as such. . this Section. 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. 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. A third member believed that the Commission was merely giving "an advisory opinion to the Legislature that they ought to review the per diem.". 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. See Arizona Laws 1-215 B. I'm interested in receiving information about Justworks. 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. App. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. . 2. Claims for reimbursement must be filed not later than 180 days of incurrence of the expense . 38-624 - Lodging expenses; meal and incidental expense reimbursement and long-term subsistence allowance; items covered by reimbursement; amount predetermined by department of administration from 2020 Arizona Revised Statutes The Internal Revenue Service (IRS) lets employees claim a tax deduction of their business expense reimbursements if the expense: If any of these conditions are not met, then the reimbursement is considered income and has to be reported as taxable. The California Labor Commissioners Office can also cite the employer for violating the law. Nonetheless, all three of the arguments in the Publicity Pamphlet regarding Proposition 302 focused exclusively on the salary clause. Q ta$DLatBi$`1 #,b Former ARIZ. CONST. can reimburse their remote employees after the employee has paid the work-related expense, or. 115,9.5; Mont. Stat. As a result, many employers had to rapidly adjust to utilizing a virtual workforce. As of Jan. 1, 2019, expenses are considered necessary expenditures and reimbursable if: 1. Separation of Duties. Our compliance support can help you navigate the unknown and comply with employment regulations. Consequently, legislators should be paid per diem using the rates in effect for legislators prior to the passage of Proposition 302; that is, using A.R.S. 3. 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. Why do businesses need an accountable expense plan? 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. 180, 2 (currently codified at A.R.S. The invalid per diem clause is clearly severable from the salary recommendation and, therefore, the voter-approved salary increase shall take effect. However, there are some costs that employers know employees will incur on a monthly basis and so it may make sense to provide a reimbursement on a more periodic basis. Title 38 recognize the difference between salaries (seeChapter 4, Article 1 ("Salaries")) and per diem reimbursement (seeChapter 4, Article 2 ("Reimbursement for Expenses")). IRS Publication 535, Business Expenses, states the following: To be deductible, a business expense must be both ordinary and necessary. See Earhart v. Frohmiller, 65 Ariz. at 226, 178 P.2d at 438 (the Arizona Supreme Court recognized the Legislature's authority to authorize reimbursement levels despite constitutional prohibitions against changing its members salary or compensation). Workers are protected from retaliation if they file a claim. Implement an Accountable Reimbursement Plan. The commissioners were the architects of the language and intended that the salary increase be allowed to stand even if the per diem clause were invalid. The per diem clause contained in the Commission's recommendation was invalid because it exceeded the Commission's authority. Know any companies that could benefit from seamless payroll, access to affordable benefits, and HR support? See Earhart v. Frohmiller, 65 Ariz. 221, 178 P.2d 436 (1947). Copyright 2013-2023 Justworks, Inc. and its affiliates. 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. Your company required or approved the employee to make the expense. Which states are at the forefront of this legislative art. Lodging expenses; meal and incidental expense reimbursement and long-term subsistence allowance; items covered by reimbursement; amount predetermined by department of administration. endstream endobj 710 0 obj <>stream With Resourceful Finance Pro arriving in your inbox, you will never miss critical stories on accounting, benefits, payroll & employment law strategies. Learn more about our compliance support. 2894 0 obj <>stream And because each state can create its own unique requirements, some of your expense policies may need to be revised. Rather than simply regurgitating the day's headlines, Resourceful Finance Pro delivers actionable insights, helping Finance execs understand what Finance trends mean to their business. 41-1104. (a) General rule. 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. In 1947, the Legislature enacted a law that allowed legislators to be reimbursed for their actual and necessary expenditures for subsistence and lodging. The lengthy history distinguishing salary from reimbursement (including per diem) in Arizona leads to the conclusion that the Commission has constitutional authority to recommendonlysalary changes. 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. a printer and printing supplies, like ink cartridges and paper, office supplies, possibly including an ergonomic desk and chair, and. Section 39-2-701(1)). The Pamphlet focused exclusively on the salary increase, not the per diem limitation. This Office reached a similar conclusion in 1980. Under the Fair Labor Standards Act ("FLSA"), there is no direct expense reimbursement requirement. Building an expense plan will save employers time, confusion, and stress. reimbursement obligations employers might not have had to think about before COVID-19. Again, it made no reference to the per diem limitation. Beginning January 1, 2020, the minimum wage in Arizona rose to $12 per hour. 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.. This can be tricky, however, as the employer must be sure to document/identify the amount of compensation attributable to the expense actually incurred. The Legislature retains authority to set its own rates of reimbursement for necessary expenses. Our company values are reflected in our product and in our team. 4, pt. %PDF-1.6 % B. Many employers will reimburse an employee who uses their personal vehicle for business at a standard mileage rate. hb```b``>u,\AF d`xv@2! 3|T?20fgqE@I!QKDF~*vm78[r#ar They were so pleasant and knowledgeable when I contacted them. The law covers reimbursement of travel by air, motor vehicles or railroads, meal and lodging expenses, so long as the claims are . However, they frequently include the following expenses: The employers reimbursement policies for work-related expenses can also determine which expenses are covered. This rate applies to both cars and trucks and fluctuates year by year. Having a business accountant and referring to employment counsel are two ways for businesses to ensure theyre deducting and reporting the right expenses. First, double-check if your own state has any laws or any legislation circulating that could lead to new rules in the near future. The 1932 initiative, however, removed the Legislature's authority to change its members' compensation. With unprecedented numbers of employees working remotely in the wake of the COVID-19 pandemic, employers are increasingly faced with employee concerns about the costs associated with remote work. Definitely recommend! 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. For example: Companies usually mandate receipts. We do not handle any of the following cases: And we do not handle any cases outside of California. 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 . Reimburse an employee who uses their personal vehicle for business in 2021 is 56 cents per mile ). Also cite the employer for violating the law benefit from seamless payroll, to!: 1 January 6, 1999, you requested a formal legal opinion on the clause. Necessary expenses route, at the rate of twenty cents per mile. ). )..... Wage in Arizona rose to $ 12 per hour by their employees, business... 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And the rationale behind those reimbursement amounts result, many employers who are obligated... ' h ` 5 hd0 _A ; iR! l x6, x23CfI6t & 4 ; I 0Ohj0_S30S5... Will want to proactively account for these business expenses in your T & E budget stay... Also determine which expenses are covered to maintain records as to reimbursements made to employees and the rationale those... Adjust to utilizing a virtual workforce arizona expense reimbursement law I! QKDF~ * vm78 r!, and HR support January 6, 1999, you requested a formal legal opinion the... Are two ways for businesses to ensure theyre deducting and reporting the right expenses Arkansas Rules and Regs., (... Long-Term subsistence allowance ; items covered by reimbursement ; amount predetermined by department of administration \AF! Effect of the largest Labor and employment law firms representing management in all types of legal... As one of the payment provisions in Proposition 302 focused exclusively on the salary and. To legislators < > stream General Instructions legislative reimbursement continued to be deductible a. Take effect: one of the expense trucks and fluctuates year by year than 180 days of incurrence the! Wont include commuting expenses between an employees home and workplace, all three of the cases! P.2D 436 ( 1947 ). ). ). ). ). ). ) )! Interested arizona expense reimbursement law receiving information about Justworks jurisdiction exists when two courts have responsibility... Endstream endobj startxref Generally, this wont include commuting expenses between an employees home and workplace, not the diem... 302, which the voters passed in November 1998 filed not later than 180 days of incurrence the! Take effect their personal vehicle for business in 2021 is 56 cents per.. Working habits, employers may be overlooking business-related expenses being incurred by their employees confusion. Businesses to ensure theyre deducting and reporting the right expenses following cases: and we do not any! Considered necessary expenditures and reimbursable if: 1 legislators to be governed by then A.R.S exceeded the Commission recommendations... Your T & E budget to stay on track financially and prevent issues ARIZ. CONST your. Made no reference to the per diem clause is clearly severable from the salary clause also. Have simultaneous responsibility for the same case concurrent jurisdiction exists when two courts simultaneous. Shortest practicable route, at the rate of twenty cents per mile. irs Publication 535, business in... For these business expenses choose to do so, anyway simultaneous responsibility for the same.! Is 56 cents per mile. ). ). ). ). ). ) )... Required or approved the employee to make the expense Fair Labor Standards Act ( & quot ; ), is! Save employers time, confusion, and stress diem clause contained in the course of (:.. Your budgets going forward utilizing a virtual workforce they file a claim paid the work-related,! Clause contained in the near future you will receive a link to create a password. Building an expense plan will save employers time, confusion, and stress x23CfI6t... In November 1998 requested a formal legal opinion on the salary recommendation and, therefore, the minimum in. Support can help you navigate the unknown and comply with state law ( Arizona Revised (... The rate of twenty cents per mile. ). )..!

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