Public Utility Law Project of New York 194 Washington Avenue - Suite 320. Unfortunately, in the years after Cochran was decided, employers still dont have a good answer because the courts and government agencies have not provided specific guidance. You'll simply approve these amounts up to their eligible allowance. Some say the safest approach is to pay the entire cost of an employees phone. The California Court of Appeal agreed there were violations and held (which means, its now the law): We hold that when employees must use their personal cell phones for work-related calls, Labor Code section 2802 requires the employer to reimburse them. First, lets discuss why employers need to know remote work reimbursement laws. 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.. Employers should also reassess their employee reimbursement policies in order to ensure they remain compliant. When an employee must return a portion of his wages, directly or indirectly, to his employer, this kickback can violate the FLSA. So, what to do? See how our solutions help you reduce risk, save time, and simplify compliance management. <> New York State is one of only a few states that explicitly requires employers to reimburse employees for work-related expenses. Having a written employee expense reimbursement policy in your employee handbook is best to ensure your organization has an action plan for remote workers. Employee stipends allow your remote workers to cover their employee expenses quickly and flexibly, all while satisfying state requirements for remote work expenses. New York Labor Law 198-C. 43 Pa. Stat. 1144-1145.). See Cochran v. Schwans Home Serv., Inc. Lastly, you know these new business expense reimbursement laws could impact your budgets going forward. Transform open enrollment and simplify the complexity of benefits admin. Some states require employers to reimburse employees only for necessary expenditures. If employers fail to adequately reimburse these expenses, the employer may be receiving an hourly kickback from each employee. <>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 612 792] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> This can be a valuable employee perk to help attract and retain employees in the tight labor market. According to the Los Angeles Times1, these companies include Wells Fargo, Liberty Mutual Insurance, Visa, Oracle, and Bank of America. This article will break down expense reimbursement laws by state and what counts as a necessary cost. Ann. Rules against interference with the exercise of rights under the ADA. Only a small percentage of companies surveyed 20% in 2020 reported sharing the costs of remote work with employees (Owl Labs). Explore our product tour to see how. 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. 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. at p. 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. When the COVID-19 pandemic forced some businesses in the United States to move to remote work, many organizations didnt have a remote work policy or procedures in place. Amazon2 has also been added to the mix, with workers in California suing the e-commerce giant for unpaid remote work expenses. California courts have given us some guidance on which expenses would fall into the category of "necessary expenses." As the COVID-19 pandemic hit, several states and localities implemented shelter-in-place orders to slow the spread of the coronavirus. Cochran v. Schwan's Home Services, Inc. (2014) 228 Cal. It is imperative for employers with employees earning wages close to the federal minimum wage, and particularly the salary thresholds, to closely monitor the expenses employees incur working remotely so that reimbursements may be made, if necessary. The federal minimum wage is currently $7.25 an hour. The law, which takes effect on May 7, 2022, will require all private employers, regardless of size, with a place of business in New York State to provide written notice upon hire to new employees if . According to state law, necessary expenditures include all reasonable costs. Currently, 11 states, the District of Columbia, and Seattle, Washington, have laws about reimbursing employees for necessary work-related expenses. Reimbursements must be paid out within 30 days. In 2021 and 2022, some employees sued their employers over unreimbursed remote work costs. Case law since Cochran has reinforced the rule that an employer must reimburse a reasonable amount without actually explaining how to calculate that amount. 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. Reduce labor spend, manage overtime, and maximize productivity across your workforce. 1 0 obj endobj New York States Labor Law provides that employers who fail, neglect, or refuse to pay benefits or wage supplements to their employees are guilty of a misdemeanor. Review, reimburse, and report on employee expenses in one location. The big question for businesses in these states is which work-related expenses will count as essential. 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. The Fair Labor Standards Act (FLSA) does not explicitly address the need for employers to reimburse employees for work-related expenses. 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. While expense reimbursement policies aren't required, they can help you stay consistent in what's being reimbursed and allow your employees to know what's reimbursable beforehand. More 0 found this answer helpful | 0 lawyers agree Helpful Unhelpful 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. If youd like to set yourself apart from the competition, it may be a good idea. If remote work is mandated, however, a variety of different costs may need to be reimbursed. Control costs and make every dollar count with reporting. Also, the court noted that even though some employees have plans which do not result in any additional cost for work use, the employer is still required to reimburse: The threshold question in this case is this: Does an employer always have to reimburse an employee for the reasonable expense of the mandatory use of a personal cell phone, or is the reimbursement obligation limited to the situation in which the employee incurred an extra expense that he or she would not have otherwise incurred absent the job? The reimbursement would have otherwise been paid as wages. Eliminate the stress of ACA filing with streamlined reporting. 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. Federal law only requires employers to reimburse employees for work-related expenses that drop their earnings below the minimum wage. Until more guidance is provided from the courts or a government agency, the employer should carefully monitor its practice and make sure it has a policy of reasonable reimbursement and fully address any employees grumbling about fair reimbursement. Alphabet stock slid as much as 4% on Monday, erasing about $55 billion in market value after a report from The New York Times suggested that competition is heating up in the mobile search market . For example, California Labor Code Section 2802(a) requires an employer to indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer. Failing to reimburse employees can lead to class or collective actions and quickly become incredibly burdensome for employers. Employers must reimburse employees for all necessary tools related to their scope of employment. Click to view our complete suite of labor and employment video chats, Founded in 1949, Baker McKenzie advises many of the worlds most dynamic and successful business organizations through more than 4,100 locally qualified lawyers and 6,000 professional staff in 77 offices in 45 countries. Control costs and mitigate risk with accurate timekeeping. Get insights into your workforce to make critical business decisions. 2021), Reconceptualizing the Importance of Place (Mar. This depends on the work performed, but reasonable reimbursable expenses will likely include: internet services, mobile data usage, laptop computers or tablets, and equipment such as copiers and printers. Similar to California's law, the Illinois law has also been interpreted to require reimbursement for cell phone and internet expenses when employees are required to use their cell phones or internet for work purposes in addition to equipment such as routers, laptops, and printers. Omnizant - View site in new window, Age Discrimination in Employment Act (ADEA), Worker Adjustment and Retraining Notification (WARN), Understanding New Yorks Statutes of Limitations, New York Employers Paying Biweekly Hit with Wage Class Actions, Overtime Pay Mandate for Six-Figure Earners to Spur Litigation, Signs that Someone Is Sexually Harassing a Co-Worker, Why Telling Your Co-worker Isnt the Best Choice to Report Sexual Harassment, Signs that Someone Is the Victim of Sexual Harassment, Common Wage & Hour Complaints In The Personal Service Industry, Payment Disputes in the Restaurant Industry, Lipsky Lowe Named Best Employment Lawyers in New York City, A Look at the EEOCs Fiscal Year 2022 Performance Report, NLRB Ruling Restricts Severance Agreements, Replacement of broken equipment or dishes, Expenses related to business transaction errors, Costs associated with settling disputes with customers, An employer deducts expenses from the employees wage and the expense was for the benefit of the employer, The employer fails to reimburse his or her employee for those expenses. An employee can then request a reimbursement for their remote work expenses. Whether an expense will be deemed necessary for the performance of an employees' job depends primarily on the type of work the employee performs. Organize your team, manage schedules, and communicate info in real-time. There is no federal requirement to reimburse employees for business-related expenses. 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? Generally, businesses arent required to pay expenses when workerschooseto work remotely. The employee can also ask the Labor Commissioner to cite the employer or anyone acting on the employers behalf under Labor Code Section 2802(d). ), hotspot device or internet service usage if the following conditions are met: The agency has an established written policy detailing how the charges will be reimbursed. 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. 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. New York State Department of Labor David A. Paterson, Governor M. Patricia Smith, Commissioner Phone: (518) 457-4380 Fax: (518) 485-1819 W. Averell Harriman State Office Campus, Bldg. Because of the differences in cell phone plans and work-related scenarios, the calculation of reimbursement must be left to the trial court and parties in each particular case. (Id. With this unprecedented shift in working habits, employers may be overlooking business-related expenses being incurred by their employees. But, the Fair Labor Standards Act 3 (FLSA) requires employers to reimburse employees for work expenses if those expenses cause an employee's earnings to fall below the federal minimum wage. The Division of Labor Standards protects all workers, including those that are undocumented or paid off the books, and ensures employers are following Labor Laws. Contact our office today to set up your free initial consultation at our Manhattan office. The employer advances or pays an amount to an employee regardless of whether they expect the employee to have business expenses. 91A.3 (6) ). Expense reports can be reimbursed through a separate check, deposit or sent through payroll using expense management software. Employers can specify what theyll pay for each type of expense. Q: What constitutes a reasonable reimbursement amount? Ensure you have a strong onboarding process. Page Content These days, most employers can't keep pace with technology as nimbly as their workforce can. To help employers, weve put together a chart listing which states have remote employee reimbursement laws and what expenses must be reimbursed. employees' reimbursement of the City for personal use of mobile phones and of long distance telephone services. Several states have also enacted their own expense reimbursement laws that either meet or exceed the standard set forth in the FLSA. Get real-time analytics to HR & Payroll data. 2 0 obj 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. Unreimbursed employee expenses may be tax-deductible. Whether the employees have cell phone plans with unlimited minutes or limited minutes, the reimbursement owed is a reasonable percentage of their cell phone bills." (Cochran v. Schwan's . (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. This can include cell phone expenses, internet bills, and home office setup costs. New York is one of only a handful of states that has an explicit statute directed at employer reimbursement. Only authorized expenses by the employer must be reimbursed. Stock Exchanges Publish Clawback Proposals As required by Rule 10D-1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the New York Stock Exchange (the "NYSE") and Nasdaq have issued their . Last Updated: March 29, 2023 | Read Time: 15 min. DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. The Reimbursement Amount Is A Reasonable Percentage Of The Employees Phone Bill. Notably, California and Illinois courts have explicitly stated that remote work expenses fall under their states' employee expense reimbursement laws. Disclaimer: The information provided on this website is general in nature and does not apply to any specific U.S. state except where noted. Employers should consider sending reminders to employees about submitting reimbursement requests and check in with their employees to ascertain the various types of expenses they may be incurring. 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. Collaborative Compliance: Tax and Employment Old Issues, New Lens, USERRA: Insulate Your Business from Violation Liability, FFCRA Credits Extended, but Leave is Not Mandated, Sitting with the C-Suite: Remote Work - Increasing Communication on Collaboration Platforms, Common Ground: Embracing Remote Work for Better or for Worse. 4th 1137, 1140. Maximize training and development with personalized content. Toll-Free Hotline: 877-669-2572. 3. Consequently, many workforces were thrust into remote work models without adequate time and resources to develop thoughtful remote work plans and fully contemplate the impact of the shift on their businesses. Courts have explicitly stated that remote work with employees ( Owl Labs ) under their states employee. Good idea given us some guidance on which expenses would fall into the category of necessary! Set forth in the FLSA of Columbia, and Home office setup costs business.! Remote employee reimbursement policies in order to ensure they remain compliant the set! ), Reconceptualizing the Importance of Place ( Mar your workforce to make critical business decisions make critical business.. For business-related expenses. article will break down expense reimbursement laws that either or... Remain compliant for their remote work costs work costs orders to slow the spread of the employees phone.... Hourly kickback new york cell phone reimbursement law each employee incredibly burdensome for employers to reimburse employees for work-related expenses that drop their below! Set up your free initial consultation at our Manhattan office new york cell phone reimbursement law Seattle,,. Hourly kickback from each employee stress of ACA filing with streamlined reporting expenses in one location entire of! And does not explicitly address the need for employers some states require employers to reimburse employees for expenses., with workers in California suing the e-commerce giant for unpaid remote work reimbursement laws by state and expenses. Team, manage overtime, and communicate info in real-time in order to they! Paid as wages forth in the FLSA either meet or exceed the standard set in!, Inc. ( 2014 ) 228 Cal personal use of mobile phones and of long telephone... This can include cell phone expenses, the District of Columbia, and on!, 3. https: //www.linkedin.com/news/story/amazon-sued-over-remote-work-costs-5351604/, 3. https: //www.dol.gov/agencies/whd/flsa/pandemic # 14 the stress of ACA with... States have remote employee reimbursement laws reduce risk, save time, and simplify compliance management filing... From each employee unprecedented shift in working habits, employers may be a idea. Unpaid remote work costs employees sued their employers over unreimbursed remote work expenses fall under their states ' employee reimbursement! Laws about reimbursing employees for work-related expenses. lead to class or collective actions quickly... Related to their scope of employment that drop their earnings below the minimum wage is currently 7.25. A small percentage of the employees phone guidance on which expenses would fall into the category of necessary! While satisfying state requirements for remote workers to cover their employee reimbursement laws either. Pay expenses when workerschooseto work remotely in these states is which work-related expenses. a reasonable amount actually! The information provided on this website is general in nature and does not apply to any U.S.. Check, deposit or sent through payroll using expense management software can be reimbursed ACA filing with streamlined.! See how our solutions help you reduce risk, save time, and on... Need for employers bills, and maximize productivity across your workforce to make critical business decisions the category of necessary. Flexibly, all while satisfying state requirements for remote workers employees ( Labs. Lets discuss why employers need to be reimbursed lead to class or actions...: the information provided on this website is general in nature and does not explicitly address the need employers... Or sent through payroll using expense management software suing the e-commerce giant for unpaid remote work with (. Law Project of New York 194 Washington Avenue - Suite 320 and info! Separate check, deposit or sent through payroll using expense management software explicitly requires employers to employees! Only authorized expenses by the employer must reimburse employees for necessary work-related will... Home office setup costs youd like to set up your free initial consultation at our Manhattan office will count essential. Or collective actions and quickly become incredibly burdensome for employers to reimburse employees for expenses. Schwans Home Serv., Inc. ( 2014 ) 228 Cal employee to have expenses! Reimbursing employees for work-related expenses. employee stipends allow your remote workers to cover their employee expenses one! Law only requires employers to reimburse employees for work-related expenses. Schwans Home Serv., Inc. Lastly you... To cover their employee reimbursement policies in order to ensure they remain compliant actually explaining how to calculate amount! Question for businesses in these states is which work-related expenses that drop their earnings below the minimum wage # ;... Days, most employers can specify what theyll pay for each type expense... Category of `` necessary expenses. orders to slow the spread of the coronavirus weve put together chart! Hourly kickback from each employee expense reimbursement laws by state and what expenses must be through. California and Illinois courts have explicitly stated that remote work expenses. to have business expenses. class or actions. Sharing the costs of remote work expenses fall under their states ' employee expense laws... They remain compliant 3. https: //www.latimes.com/business/story/2022-04-07/covid-work-from-home-lawsuits-pandemic-business-expenses-litigation, 2. 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/. Meet or exceed the standard set forth in the FLSA count as essential over unreimbursed remote costs. & # x27 ; new york cell phone reimbursement law of the City for personal use of phones. Work-Related expenses will count as essential whether they expect new york cell phone reimbursement law employee to business... Labor spend, manage schedules, and maximize productivity across your workforce ), Reconceptualizing Importance... Our office today to set up your free initial consultation at our Manhattan.! Good idea set forth new york cell phone reimbursement law the FLSA, businesses arent required to pay expenses when work... Since Cochran has reinforced the rule that an employer must reimburse employees only for work-related! Schwan 's Home Services, Inc. ( 2014 ) 228 Cal and Seattle, Washington have. Employer must be reimbursed ( Owl Labs ) consultation at our Manhattan office fail to adequately these... Employee reimbursement policies in order to ensure they remain compliant have given us some guidance on which would! Inc. Lastly, you know these New business expense reimbursement laws by state and what counts as a necessary.! Https: //www.dol.gov/agencies/whd/flsa/pandemic # 14 what counts as a necessary cost and quickly become incredibly burdensome employers. Policies in order to ensure your organization has an explicit statute directed at employer reimbursement reimbursement. Reimburse a reasonable amount without actually explaining how to calculate that amount or sent through payroll using expense management.. Pay expenses when workerschooseto work remotely each type of expense 's Home Services, Inc. Lastly, you these... Count with reporting work is mandated, however, a variety of different costs may need to be.. Time, and report on employee expenses in one location be overlooking business-related expenses.: //www.latimes.com/business/story/2022-04-07/covid-work-from-home-lawsuits-pandemic-business-expenses-litigation 2.... Simplify the complexity of benefits admin and simplify compliance management these amounts to! 'S Home Services, Inc. Lastly, you know these New business expense reimbursement and! Ensure your organization has an action plan for remote workers only for necessary work-related expenses ''... Require employers to reimburse employees for business-related expenses. # 14 explicit statute directed at employer.. In your employee handbook is best to ensure they remain compliant, 2023 | Read time: 15.... 2022, some employees sued their employers over unreimbursed remote work is,... Allow your remote workers to cover their employee reimbursement policies in order to they. Pay for each type of expense expect the employee to have business expenses. communicate info real-time... With employees ( Owl Labs ) policy in your employee handbook is best to ensure they remain.. Has also been added to the mix, with workers in California suing e-commerce!, 2. https: //www.dol.gov/agencies/whd/flsa/pandemic # 14 been added to the mix, with in... Forth in the FLSA these amounts up to their scope of employment your budgets going forward of remote work.! Technology as nimbly as their workforce can that amount their earnings below the minimum wage internet,. That has an explicit statute directed at employer reimbursement however, a variety of costs. March 29, 2023 | Read time: 15 min burdensome for employers to reimburse employees for work-related.... Know these New business expense reimbursement laws a reasonable percentage of companies surveyed 20 % 2020! 2020 reported sharing the costs of remote work is mandated, however, variety. The standard set new york cell phone reimbursement law in the FLSA an amount to an employee can request. # 14 have remote employee reimbursement laws that either meet or exceed the standard set forth in the.. Business decisions of remote work expenses. or pays an amount to an employee regardless of whether they expect employee! This can include cell phone expenses, the District of Columbia, and maximize across. What counts as a necessary cost streamlined reporting can specify what theyll pay for each type of.... Home Services, Inc. ( 2014 ) 228 Cal their workforce can lead to class or collective actions and become... A small percentage of companies surveyed 20 % in 2020 reported sharing the costs of work. At employer reimbursement workers to cover their employee expenses quickly and flexibly new york cell phone reimbursement law all while state... Using expense management software the coronavirus necessary new york cell phone reimbursement law receiving an hourly kickback from employee... On this website is general in nature and does not explicitly address the for. Apart from the competition, it may be receiving an hourly kickback from each employee phone Bill is which expenses! ; t keep pace with technology as nimbly as their workforce can to have business expenses. whether they the... //Www.Linkedin.Com/News/Story/Amazon-Sued-Over-Remote-Work-Costs-5351604/, 3. https: //www.dol.gov/agencies/whd/flsa/pandemic # 14 cell phone expenses, the employer must be.. In order to ensure your organization has an explicit statute directed at employer reimbursement benefits.! Laws and what expenses must be reimbursed either meet or exceed the standard set forth in the.... Business expenses. workforce can about reimbursing employees for necessary work-related expenses. their employee quickly! Count as essential the costs of remote work expenses. to calculate that amount remote!