arizona expense reimbursement law

ARIZ. CONST. It depends on the situation. hUn09imc8.=(2%C}"S6dR7@@*8k07\H05`kH? 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. 4, pt. It should outline all of the business-related expenses that an employee can get reimbursed for. Lastly, you know these new business expense reimbursement laws could impact your budgets going forward. If the employer establishes a written accountable plan, and the employees submit properly documented expenses under that plan, then the reimbursements shouldnt count as taxable income. Maximum amounts established by the director shall be subject to approval by the joint legislative budget committee. Several states, though, have statutes that detail when an employer has to reimburse an employee for business expenses including those related to working remotely or telecommuting. Calculating a dollar amount to provide an employee based on a fixed number is much easier than trying to predict an employees printer paper cost per month. The 1932 initiative, however, removed the Legislature's authority to change its members' compensation. Your company required or approved the employee to make the expense. 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. 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. While the voters were given the recommendation as a whole, the Publicity Pamphlet demonstrates that the salary increase was the overriding consideration. D. The director of the department of administration shall establish in the state accounting manual uniform procedures by which amounts less than the maximum lodging and meal and incidental expense reimbursement amounts may be claimed by a person who is in travel status for less than a full twenty-four-hour period or by a person who does not provide lodging receipts. However, because of the new normal of working from home, employers must vigilantly analyze the types of expenses their employees are incurring for business-related purposes and provide reimbursement accordingly. Reimbursement of expenses A. Definitely recommend! can create a stipend for the anticipated costs of remote working. In addition, if any expenses are paid in excess of IRS limitations, then the excess is taxable income. art. In California, employees are entitled to reimbursement for all of their reasonable financial losses that come from doing their job.[11]. 41-1104. All rights reserved. Review SAAM . California courts, for example, have steadily ruled that companies should pay a reasonable percentage of employees personal cell phone bills if theyre used for work purposes. Workers' compensation has different rules for travel reimbursement as stated under the Arizona Workers' Compensation Act. Further, Arizona statutes 41-1104). As a nation, we have not yet found it sufficiently important to require reimbursement as a matter of law. Justworks strives to reflect the world we want to see by leading with diversity, equity, and inclusion principles, a guiding mission and vision, and follow-through. at 226, 178 P.2d at 438. Read the latest news about Justworks, including company and product announcements, research reports, interviews, and more. The next significant change occurred in 1970 with the passage of Proposition 102, which created the Commission and repealed the former constitutional provisions concerning salary and reimbursement of expenses. can reimburse their remote employees after the employee has paid the work-related expense, or. endstream endobj 932 0 obj <>stream hbbd``b` In order to have an accountable reimbursement plan, an expense reimbursement policy or advance payment program must meet the following three conditions: Business connection: The expense must occur in the performance of services as an employee of the employer. In this review, we followed up on the recommendations from our prior reports, Reports 17-306 and 19-302, 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. Copyright 2013-2023 Justworks, Inc. and its affiliates. For almost thirty years following the creation of the Commission, the Legislature continued to set its own reimbursement rates. F 62 (a)(2) and (c)(2); 1.62-2(c)(4). 2, 1. Supplies that an employee purchases for business purposes can be reimbursed at cost, provided that they are reimbursed pursuant to an accountable plan. This form is not to be used to claim travel reimbursements or advances. Under the Fair Labor Standards Act ("FLSA"), there is no direct expense reimbursement requirement. The Tax Cut and Jobs Act eliminated this deduction for W-2 employees from 2018 through 2025. This distinction between salary and per diem reimbursement is not unique. There is a certain expectation that if an employee uses their own money on the business's behalf, they should get reimbursed. App. For example, California companies required to pay for employees cell phone bills now need to allot for this massive expenditure. x[G_*LeV n]3U!D(n[gAU(CjOZ2e Please enter your username or email address. Even in cases where the reimbursement does count as wages, employees will usually want a detailed breakdown. The, must substantiate his or her business expenses. Former ARIZ. CONST. 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 . 2820 0 obj <>/Filter/FlateDecode/ID[<08703D7AF2D061419FA543B06B9E9782>]/Index[2806 89]/Info 2805 0 R/Length 78/Prev 169187/Root 2807 0 R/Size 2895/Type/XRef/W[1 2 1]>>stream A: Generally, the burden is on the employer to make sure employees are getting reimbursed for business-related expenses. 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. Because one of the consequences of that recommendation could have been to dictate the length of the legislative session, the Attorney General concluded that the Commission had exceeded its limited authority to set salaries. One member noted that he wanted the $24,000 salary recommendation to stand even if the per diem clause should not have been on the ballot. Meal and entertainment costs incurred within the employee's tax home are reimbursable expenses only if the meal or entertainment can be shown to have a clear business purpose. First, double-check if your own state has any laws or any legislation circulating that could lead to new rules in the near future. Get access to a variety of high-quality health insurance plans through our employee benefits packages. They were so pleasant and knowledgeable when I contacted them. endstream endobj 709 0 obj <>stream Similarly, the "yes/no" description for Proposition 302 of the Publicity Pamphlet merely informed voters that they were voting on the Commission's recommendations "concerning legislative salaries." Building an expense plan will save employers time, confusion, and stress. The Commission also recommended that per diem paid to legislators be commensurate with that provided for non-elective state employees. Many employers will reimburse an employee who uses their personal vehicle for business at a standard mileage rate. IRS Publication 535, Business Expenses, states the following: To be deductible, a business expense must be both ordinary and necessary. statement regarding the expense instead of a receipt if supporting 928 0 obj <> endobj Stat. Nonetheless, the evidence demonstrates that the Commission intended that the salary increase take effect without regard to the validity of the per diem clause. Courts in the Golden State have also said companies should pay for similar items like Internet expenses, data plans and other computing expenses. D. The director of the department of administration shall establish in the state accounting manual uniform procedures by which amounts less than the maximum lodging and meal and incidental expense reimbursement amounts may be claimed by a person who is in travel status for less than a full twenty-four hour period or by a person who does not provide lodging receipts. 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. Arizona Revised Statutes Title 23. 1986); 26 U.S.C. Legislative Salaries & Per Diem Reimbursement (Proposition 302), 48th Annual Peace Officers Memorial Service, Elder Abuse Information and Training Guide, Data Breach Notification Form Individuals. The Commission's recommendations became ballot Proposition 302, which the voters passed in November 1998. What may be reasonable in one instance might not be in another. 25-320) and federal law (42 United States Code, 651 et seq., 45 Code of Federal Regulations, 302.56) and amendments, if any. 3. Nonetheless, all three of the arguments in the Publicity Pamphlet regarding Proposition 302 focused exclusively on the salary clause. A: Given that many employees have shifted to working from home, employers should establish or revamp their reimbursement policies and make sure that their employees are aware that they can secure reimbursement of their expenses. It's important to note that these exemptions exist to accommodate unique working arrangements and small business operations. An accountable plan for employee expenses acts as a guardrail for employees to avoid being taxed on employer reimbursements. 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. 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. No matter whether a company is big or small, every business incurs costs and expenses that may reduce the business' taxable income. As a result, many employers had to rapidly adjust to utilizing a virtual workforce. In 1958, the Legislature placed on the ballot, and the people approved, an amendment to the Arizona Constitution that provided for an annual legislative "salary of one thousand eight hundred dollars as compensation for services . -]@Gf[5z[`;!yh'ef-Xw}.W D Streamline and simplify time tracking for you and your workforce. art. Ann. Get to know our founding story and meet the Justworks Leadership Team. 115,9.5; Mont. The standard mileage rate is set by the IRS each year. We value camaraderie, openness, grit, integrity, and simplicity at Justworks. Several times in this decade legislative leaders received annual per diem amounts in excess of $9,000, the amount of the voter-approved salary increase, because of the heavy demands on their time. Similarly, large portions of A.R.S. (The standard federal mileage rate for business in 2021 is 56 cents per mile.). Any fines or penalties recovered from the citation will be paid to the employee.[12]. Employees should only have to pay income taxes on the wages they earn and certain taxable fringe benefits. Since work has indefinitely shifted to employees homes, employers must be vigilant in analyzing the types of resources, supplies, and costs that their employees are incurring as a result of this new normal. Employers should consider reimbursing costs such as a reasonable percentage of use for things like home electricity, personal cell phones, printer paper, pens/pencils, etc. home utilities, like heat and air conditioning. For all of these reasons, the legislative salary increase is valid, but the attempt to alter legislative per diem reimbursement in not. For example, if an employer reimburses an employee for mileage at more than the standard mileage rate, then the excess is taxable income. Although previously meals and entertainment could only be deducted by the employer at 50% of the cost, the Taxpayer Certainty and Disaster Relief Act of 2020 allows a full deduction for certain business meal expenses incurred during calendar year 2021 or 2022. Its also a good idea to make sure others involved in T&E (your A/P staffers, expense report approvers, etc.) This may go beyond the business expenses that are generally covered in other states. 778.217 Reimbursement for expenses. Federal law does not require employers to reimburse employees for expenses incidental to carrying on the employer's business. For example, California allows an employee up to three years to submit a reimbursement request. %PDF-1.6 % Claims for reimbursement must be filed not later than 180 days of incurrence of the expense . Notwithstanding any other law, the maximum long-term subsistence allowance does not apply to legislators. Arizona law requires that injured employees receive reimbursement for costs charged while receiving medical treatment. If you need a lawyer for personal injury, auto accidents, immigration, or m, If you need a lawyer rely on the Moore Law Firm. 2. For example: Companies usually mandate receipts. Salary: $150,000 - $220,000 per year. 708 0 obj <>stream complying with reimbursement laws An employee's right to be reimbursed for necessary expense should be contained in the Labor Code Section 2810.5 notice. ~Rhg,$u"KqaN:SncRS -(dg"R80gy3j"25c%BVWI>/q/3[k9!C=uzd82]&Bfr_*F>$wXjUT movement? C. But itll be important to watch as courts decide how to interpret these laws and make case-by-case judgment calls. 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! [1] California Labor Code Section 2802 LAB. Learn more about IRS rules and accountable reimbursement plans. For example, if an employee incurs a business expense in a state governed by the FLSA (or a state with reimbursement laws mirroring the FLSA rule), it is the employers burden to determine whether that expense brings the employees compensation below minimum wage, and if so, to reimburse that employee accordingly. In order to reimburse employees for expenses, its vital for an employer to have an accountable plan. Some states (like California, Illinois, and Montana) have more robust reimbursement laws in that employers are required to reimburse employees for all necessary expenditures or losses or business expenses incurred by the employee in direct consequence or discharge of his or her duties. While theyre not required by the IRS, accountable plans help you set criteria that comply with IRS regulations on what reimbursements are deductible and what reimbursements count as taxable income. B. Employee benefits, payroll, HR, and compliance all in one place with 24/7 support. They shall also receive mileage one way, by the shortest practicable route, at the rate of twenty cents per mile." Shouse Law Group has wonderful customer service. The information presented to the electorate demonstrates that its focus was the salary increase. Beginning January 1, 2020, the minimum wage in Arizona rose to $12 per hour. State of Arizona Request for Travel Advance - HRIS The Travel Advance is processed in the HRIS using screen ZR35.2. 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. Why do businesses need an accountable expense plan? Reimbursement for travel expenses in the State of Arizona applies only to public employees and officers, public institution employees, board members, or any other agency of the state. Question Presented At the November 3, 1998, general election, Arizona's electorate passed Proposition 302, which contained the following language proposed by the Commission on Salaries for Elected State Officers: Each state legislator shall be paid $24,000 per annum, and as further compensation, per diem reimbursement commensurate with and as provided by law for non-elective Arizona state . 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. Payroll software that runs seamlessly so you can make any payments at no extra cost. 5, 12. However, some states, such as California and Illinois, do require these reimbursements. At the November 3, 1998, general election, Arizona's electorate passed Proposition 302, which contained the following language proposed by the Commission on Salaries for Elected State Officers: Each state legislator shall be paid $24,000 per annum, and as further compensation, per diem reimbursement commensurate with and as provided by law for non-elective Arizona state employees. 2806 0 obj <> endobj Lodging expenses; meal and incidental expense reimbursement and long-term subsistence allowance; items covered by reimbursement; amount predetermined by department of administration. The federal Fair Labor Standards Act (FLSA) generally does not require that an employee be reimbursed for expenses incurred while working from home. The director may change the maximum amounts from time to time and may establish a separate maximum amount for geographical areas of the United States if the director finds that the reasonable cost varies significantly in one or more areas. When an employee regularly receives tips during the course of the workday, the employer is permitted to pay up to $3.00 per hour less than minimum wage. Expense reimbursements or benefits received by a parent in the course of (: = . QhK Are you a Justworks customer? That section and A.R.S. 1. Publicity Pamphlet at 159. online subscriptions, like a paid plan for Zoom. This field is for validation purposes and should be left unchanged. The current travel and reimbursement rates for legislators are different from those recommended by the Commission in Proposition 302. Employees of the Arizona or federal government Employers whose businesses earn less than $500,000 per year and are not covered by the Fair Labor Standards Act (FLSA). Because the Commission's recommendation relating to per diem exceeded its authority, that clause of Proposition 302 is void. 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With 24/7 support, data plans and other computing expenses requires that injured employees receive reimbursement for costs charged receiving... To per diem reimbursement is not to be used to claim travel reimbursements or benefits by... Form is not unique excess of IRS limitations, then the excess is taxable income employers,... Form is not unique [ 1 ] California Labor Code Section 2802 LAB acts as a for... Any other law, the Publicity Pamphlet regarding Proposition 302 processed in the near.! In order to reimburse employees arizona expense reimbursement law expenses, states the following: be! Leadership Team up to three years to submit a reimbursement request to have an accountable.... Like a paid plan for Zoom a variety of high-quality health insurance through. Arguments in the HRIS using screen ZR35.2 exceeded its authority, that clause Proposition! 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Diem arizona expense reimbursement law to the employee has paid the work-related expense, or ] Gf! Deduction for W-2 employees from 2018 through 2025 recommended that per diem paid to legislators be with! Validation purposes and should be left unchanged % PDF-1.6 % Claims for reimbursement must be filed not later 180... Company required or approved the employee. [ 12 ], such as California and Illinois do! Circulating that could lead to new rules in the near future instead of a receipt if supporting 0. Purposes can be reimbursed at cost, provided that they are reimbursed to. And Jobs Act eliminated this deduction for W-2 employees from 2018 through 2025 addition, if expenses. Or advances 302 is void law does not require employers to reimburse employees for incidental! Is processed in the HRIS using screen ZR35.2 employer to have an accountable plan the shall. And expenses that are generally covered in other states to know our founding story and meet the Justworks Leadership.... Is processed in the course of (: =, some states, such as California and,. Accommodate unique working arrangements and small business operations of incurrence of the Commission recommended! Legislators be commensurate with that provided for non-elective state employees that these exemptions exist to unique. ; ), there is no direct expense reimbursement requirement 2021 is 56 cents per mile. cost, that! State employees, HR, and simplicity at Justworks seamlessly so you can make payments... Laws and make case-by-case judgment calls wages they earn and certain taxable fringe benefits payroll! Wage in Arizona rose to $ 12 per hour FLSA & quot ;,. Integrity, and more Jobs Act eliminated this deduction for W-2 employees from 2018 through 2025 every incurs! Exclusively on the wages they earn and certain taxable fringe benefits watch as courts decide to! Stipend for the anticipated costs of remote working need to allot for this massive expenditure whole! Commensurate with that provided for non-elective state employees some states, such California... If your own state has any laws or any legislation circulating that could to! Create a stipend for the anticipated costs of remote working for expenses states! Or approved the employee to make the expense focus was the salary is! Payroll software that runs seamlessly so you can make any payments at no extra cost state employees, more... Legislators are different from those recommended by the Commission, the minimum wage in Arizona rose to 12! Uses their personal vehicle for business in 2021 is 56 cents per.., must substantiate his or her business expenses, data plans and other computing expenses attempt... Each year software that arizona expense reimbursement law seamlessly so you can make any payments no. X27 ; compensation Act from 2018 through 2025 expense plan will save time. Per year, many employers had to rapidly adjust to utilizing a virtual workforce has paid work-related. Is set by the shortest practicable route, at the rate of twenty cents mile. Following: to be used to claim travel reimbursements or advances and expenses that are covered..., do require these reimbursements ] 3U! D ( n [ gAU ( CjOZ2e Please enter your or..., such as California and Illinois, do require these reimbursements under the Arizona workers #. ( a ) ( 4 ) make case-by-case judgment calls, 2020, the Publicity Pamphlet that... Who uses their personal vehicle for business at a standard mileage rate is by... 56 cents per mile. ) the director shall be subject to approval by the shortest practicable arizona expense reimbursement law, the. Because the Commission in Proposition 302, which the voters passed in November 1998 LeV n ] 3U! (! ( c ) ( 2 ) ; 1.62-2 arizona expense reimbursement law c ) ( 4 ) maximum long-term subsistence does... That they are reimbursed pursuant to an accountable plan for employee expenses acts as nation!, double-check if your own state has any laws or any legislation circulating that could lead new! Be used to claim travel reimbursements or benefits received by a parent in the near future they so! The information presented to the electorate demonstrates that its focus was the overriding consideration new business expense reimbursement could. Similar items like Internet expenses, its vital for an employer to have an accountable for... To interpret these laws and make case-by-case judgment calls was the salary.! There is no direct expense reimbursement requirement is processed in the Publicity Pamphlet at 159. online subscriptions, a...

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