As if IRS regulations weren’t enough to keep up with, some states are adding their own expense reimbursement laws that your staffers will have to comply with, too.. Once you understand your obligations, set clear guidelines for your employees. Labor Code section 2082 is extremely powerful. Make sure that you understand and follow the applicable laws in the states … In addition, 16 states allow fewer than nine provider types to receive reimbursement for telehealth, while 19 states and the District of Columbia do not specify the type of provider. Effective January 1, 2019, the Illinois Wage Payment and Collection Act requires employers to reimburse employees for all necessary expenditures or losses incurred within the employee’s scope of employment and directly related to services performed for the employer. The health care workforce is stretched to its limits in most states. The Employer Report provides legal updates and practical insights about the latest labor and employment issues affecting US multinationals, at both the domestic and global level. Montana 5. The purpose of this statute is "to prevent employers from passing their operating expenses on to their employees." Working from home (or telecommuting) is not a new concept. Cal. As COVID-19 continues to spread across the United States, it is anticipated that a large portion of the workforce will be asked to work from home for their own protection and for the protection of others. Below are summaries of state laws governing refunds of retail sales items: Alabama: There's no right to cancel contracts or purchase agreements. The map and search options below cover current laws and regulations for all fifty states and the District of Columbia. While expense reimbursement is only required if it is stipulated in an employment contract or if the business expenses bring the employee’s wages below minimum wage, most businesses reimburse work-related expenses incurred by employees as a job perk. Norton Rose Fulbright Verein helps coordinate the activities of the members but does not itself provide legal services to clients. The United States (“U.S.”) accounts for the largest share of drug spending and innovation in the world, and its drug pricing regime is the most complex given its multi-payer model and unique overlay of market access requirements that collectively impact drug pricing and reimbursement decisions in the U.S. 4th 554, 562 (2007) (internal citation omitted). Illinois was the newest addition this year. The potential obligation to reimburse employees for remote work expenses is not limited to California, however. 19, 2020). We use cookies to deliver our online services. Other states, including Illinois, Iowa, Montana, New Hampshire and South Dakota, have enacted laws which may require reimbursement of employee expenses, although case law in these states is not as well-developed as in California. That’s where expense reimbursement comes in. At least one California federal court has held that phone and Internet expenses incurred by employees who choose to telecommute are not “necessarily incurred” and thus need not be reimbursed. December 17, 2020. This means an employer could be required to reasonably compensate employees for, say, a portion of their personal cell phone bill, even if the employee was already planning to pay for these services for their personal use. 2020 has been a tumultuous year for the aviation industry. Due to the coronavirus (COVID-19) pandemic, millions of employees who ordinarily work at an office or other workplace provided by their employers are now working at home.While you can no longer get a tax deduction for work at home expenses, here are some other ways you can get reimbursed for these costs, including as qualified disaster relief payments. For example, in Novak, Defendant Boeing offered its employees the option of voluntarily participating in a virtual worker program. The information provided is only for research and informational purposes and should not be construed as legal counsel. Reimbursement may also be necessary under California law even when an employee does not incur additional out of pocket costs. The employer may then consider whether to offer additional reimbursement or to decline the employee's claim. If they live in California, Illinois, Iowa, Montana, or D.C., yes. Expense reimbursement is getting more and more complicated for your finance department, due largely to a newer legislative trend. New York City Employee Expense Reimbursement Attorney. Given these requirements, reimbursement of expenses is yet another factor that employers must consider when determining whether to allow, strongly encourage, or require their employees to work from home as the country seeks to curtail the spread of COVID-19. Other states, including Illinois, Iowa, Montana, New Hampshire and South Dakota, have enacted laws which may require reimbursement of employee expenses, although case law in these states is not as well-developed as in California. The new year brings new employee reimbursement obligations for Illinois employers. Other states, including Illinois, Iowa, Montana, New Hampshire and South Dakota, have enacted laws which may require reimbursement of employee expenses, although case law in these states is not as well-developed as in California. In the event of a large expense, such as the purchase of a printer or the repair of an internet connection, the expense should be reimbursed upon demand. There is no federal requirement to reimburse employees for business-related expenses. You must take specific legal advice on any particular matter which concerns you. When creating or revising reimbursement policies, you must be mindful of the “de minimis” threshold and ensure that reimbursements reasonably compensate the employee for the expenditure. Some states (e.g., Illinois) also require employers to reimburse employees for necessary expenses they incur to perform their work. However, little guidance exists to prepare psychologists to navigate the legal, regulatory, reimbursement, and ethical issues that can arise when providing psychological services via technology. This includes developing BYOD policies that address employee use of personal phones, tablets, computers, and other devices that access company data. Reimburse for the actual voice and/or data fees incurred for business purposes, which requires employees to submit expense reports itemizing the costs of calls made for work purposes and the costs of data used for work supported with cell phone bills or other evidence of the costs (this is a time intensive process for employees); Reimburse for a percentage of voice and/or data fees that accurately reflects the amount of mandatory business usage, and if a percentage or flat monthly amount is used, then allow employees to seek reimbursement for any additional costs incurred over the percentage or flat amount if the actual costs of business use exceed those amounts (this can be hard to determine given the number of different plans available); or. For help crafting your expense reimbursement policy, please contact your Baker McKenzie employment lawyer. 2011). Illinois Expense Reimbursement Law For instance, where it is mandatory for employees to use their personal cell phones for work, generally they must be compensated for a reasonable percentage of their phone plans. Click this map of DSMES coverage by state external icon to learn which states have laws that require such coverage for both private insurance plans and Medicaid, and to find information on legal requirements for when DSMES coverage is triggered, what specific activities are covered, and the standards that DSMES must meet. Aguilar v. Zep Inc., 2014 WL 4245988, at *17 (N.D. Cal. Effective January 1, 2019, Illinois will join the handful of jurisdictions around the country that require employers to reimburse employees for expenses incurred in connection with employment. Mar. This serves several purposes. The Firm is known for its global perspective, deep understanding of the local language and culture of business, uncompromising commitment to excellence, and world-class fluency in its client service. Therefore, employers may wish to review their expense reimbursement policies in advance of the law’s January 1, 2019, effective date. Lawson v. PPG Architectural Finishes, Inc., 2019 WL 3308827, at *7 (C.D. A "necessary” expense is defined in section 9.5 as all reasonable expenses that: (a) are required by the employer in the discharge of the employees’ duties; and (b) are primarily for the benefit … Whether you can receive a refund is dependent on the retailer's return and refund policies. Cochran v. Schwan's Home Serv., Inc., 228 Cal. Illinois has joined a number of other states … 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 purpose of this communication is to provide general information of a legal nature. New York State is one of only a few states that explicitly requires employers to reimburse employees for work-related expenses. A number of other states have enacted statutes that require reimbursement of employees’ necessary business expenses: In California, an employer must reimburse an employee for all “necessary expenditures or losses incurred by the employee in direct consequence or discharge of his or her duties.” Cal. Section 2802 liberally applies to many expenses that employees may be required to incur to perform their jobs, including vehicle expenses, travel expenses, and cell phone and internet plans. Novak v. Boeing Co., 2011 WL 9160940, at *3 (C.D. Some states (like California, Illinois, and Montana) have more robust reimbursement laws in that employers are required to reimburse … California’s law has been interpreted to require reimbursement of a “reasonable percentage” of an employee’s monthly bill for Internet or mobile device data plan, even if the employee does not incur any additional cost for using the Internet or mobile device for work (e.g., unlimited data plan). The court found an employer was required to reimburse its employees for personal cell phone and internet expenses because they "were a foreseeable and clearly anticipated cost of doing business." Some, particularly in tech, may be working from home through the end of the year, or even permanently! While expense reimbursement is only required if it is stipulated in an employment contract or if the business expenses bring the employee’s wages below minimum wage, most businesses reimburse work-related expenses incurred by employees as a job perk. Android, iPhone, etc. Using the average MPG of 22 for most vehicles in the United States, that means that you’ll probably spend between $2,000 – $3,000+ per year on gasoline. Telehealth policy changes occurring within the COVID-19 environment have been rapidly developing on almost a daily basis. Local zoning regulations might require a remote employee working from home to get a zoning variance from the locality. Maintenance: According to AAA, the average annual maintenance cost for a car is about $1,200. Be aware, however, that some states have their own laws surrounding expense reimbursement. The law allows employees to sue their employer for reimbursement of the business use of their personal cell phone, internet, or even vehicle. Companies may be ill-prepared with the legal implications of switching to an all-remote model. Id. California’s expense-reimbursement statute has been particularly troublesome for employers. The program only would reimburse for the basic rate of ISP connection services, and would not reimburse charges or costs associated with service initiation, activation, installation, etc. In the event of a large expense, such as the purchase of a printer or the repair of an internet connection, the expense should be reimbursed upon demand. Novak v. Boeing, 2011 WL 9160940 (C.D. Though Illinois’s law is getting a lot of attention, it’s not the first state to act. Additionally, states may or may not explicitly apply their laws to online sales. For more information: www.bakermckenzie.com, Reimbursement Refresher: Cell Phone and Internet Expenses Related to Telecommuting in the US, Annual Equity Award Filing Chart: Filing & Reporting Requirements for Global Employee Share Plans, California Employers With 100 Or More Employees Must Report Pay Data By March 31, 2021, ERISA Claim Takeaways From 7th Circ. With approximately 700 lawyers globally, Baker McKenzie’s Employment & Compensation group is the largest in the world and the only one to be ranked Band 1 by Chambers Global in 2020. And now that many employees are using their home internet, the business portion of their internet bill is reimbursable, even if they would have had a home internet plan before. 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. One participant sued Boeing under California's reimbursement law, alleging that his home office expenses were not reimbursed. App. June 21, 2019). Unique COVID-Related Wage & Hour Issues Employers Need to Know, US Immigration Considerations During the Pandemic, Protecting trade secrets in the rapid remote world, The Reopening Playbook: What US Employers Should Be Thinking About Right Now, COVID-19: 3 Key Areas for US Employers to Master Now, Cost-Cutting Strategies in the Wake of COVID-19, The Global Employer: Global Immigration & Mobility Quarterly Update | December 2020, Mandatory Vaccinations in the Workplace | What US Employers Should Consider Now, US Pay Equity and Transparency Developments: What You Need to Know Going Into 2021, EEOC Issues Much-Anticipated Q&A Guidance on COVID-19 Vaccinations, GC Agenda: Customer-Facing Employee Safety | Dec 2020 / Jan 2021. Such considerations may have long-lasting effects beyond the pandemic as companies increasingly implement BYOD programs and encourage remote work arrangements which may trigger reimbursement. In plain terms, Section 2802 requires California employers to reimburse all expenses their employees incur in performing their jobs, or that an employee incurs because he or she carries out the employer’s directions. Under the mitigation plan of COVID-19, many states are relying upon existing state parity laws to recoup reimbursement for eligible expenses, especially considering the Medicare waivers. Stay tuned for more on that! Cal. West Virginia: HB 4003: Require telehealth insurance coverage of certain telehealth services after July 1, 2020. Remote work also presents other issues which are exacerbated under the current crisis. Generally, your department knows what typical business expenses states will expect to be reimbursed, like transportation, lodging, meals and entertainment. The US imposed sanctions on Turkey in response to its acquisition of the S-400 anti-aircraft missile system from Rosoboronexport. The court rejected plaintiff's contention that the superior speed and convenience of his home internet plan created an obligation to reimburse under Section 2802. Due to the pandemic, employees in the US are working from home in unprecedented numbers. Expect more litigation about when an expense triggers the employer’s statutory reimbursement obligation. Nine states also require minimum paid rest periods for adult employees in the private sector. Illinois has joined a number of other states (e.g.,California, Massachusetts, and Montana) in enacting expense-reimbursement statutory or regulatory provisions or addressing expense reimbursement obligations through agency guidance. Additionally, some states require that employees be paid on a specific schedule (weekly, bi-weekly, semi-monthly, or monthly). Reimbursement for a facility fee must be subject to a negotiated agreement between the originating site and the health carrier. The Internet is the technological capacity required to implement for example, the store-and-forward of digital images often used in tele-dermatology, tele-radiology, tele-dentistry, etc. For many companies, this requirement has already impacted how companies implement 'Bring-Your-Own-Device' (BYOD) and remote work programs. Details and instructions on how to disable those cookies are set out at, Head of Data and Information Risk, United States, Bankruptcy, financial restructuring and insolvency, Data protection, privacy and cybersecurity, Environmental, social and governance (ESG), See Norton Rose Fulbright's additional COVID-19 resources, Anti-Facilitation of Tax Evasion Statement, COVID-19: Working from home and employer reimbursement of remote-work expenses in California and beyond, Washington DC *associate office **alliance. These states require employers to reimburse their employees for all necessary business-related expenses, regardless of the employee’s wage . Kristin Tauras - December 10, 2018. Class-action litigation premised on failure to reimburse certain expenses (such as home internet service for telecommuters and smartphone expenses) has been brought based … State Coverage for Telehealth Services. Illinois requires reimbursement of all “necessary expenditures or losses” an employee incurs within the scope of employment that are “directly related to … Using the average MPG of 22 for most vehicles in the United States, that means that you’ll probably spend between $2,000 – $3,000+ per year on gasoline. Aug. 27, 2014). As technology advances, psychologists increasingly have the opportunity to engage with patients or other users of psychological services via less traditional methods. 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