Subscribe to PICPA's personalized UNIVERSITY PARK, Pa. – Cellphone allowances for Penn State employees will be eliminated effective March 31, the University announced today. They will likely be the front line in handling employee reimbursement requests, and they should know any legal requirements in applicable jurisdictions, as well as how to handle employee claims for expenses. COMMONWEALTH OF PENNSYLVANIA Pennsylvania Labor Relations Board CHAMBERSBURG POLICE OFFICERS ASSOCIATION : : ... choose his own cell phone and plan. For an expense to be allowable, it must meet the following conditions, and supporting documentation is required: 1. Though the FLSA does not require employers to reimburse their employees, under the FLSA “kickback” rule, employees cannot be required to directly pay business-related expenses or reimburse their employer for such expenses if doing so would cause the employee’s wage rate to fall below the required minimum wage or overtime compensation thresholds. Ann. If your cell phone acts as both your business and personal phone, you are only allowed to deduct the portion used for business. Read More, Get the latest info on professional trends, management, and leadership skills on CPA Now. Provide a date by which reimbursable expenses and any required documentation or certification must be submitted. Such a claim would not include the potential recovery of liquidated damages and attorney’s fees, as are available under the IWPCA. PICPA members get full access to all of our articles, forums, podcasts, and more. But only “necessary” expenses incurred by employees must be reimbursed, not optional expenses. 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 employer’s burden to determine whether that expense brings the employee’s compensation below minimum wage, and if so, to reimburse that employee accordingly. In other words, "reimbursement is always required." 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. When revising the policy, be sure to: More employees are working remotely now than ever before and may be incurring reimbursable expenses. For guidance on your employee expense reimbursements, contact your Baker McKenzie employment attorney. However, managing employees working from home can create other issues worthy of class-action litigation, including reimbursing those employees for work-related expenses. For more information: www.bakermckenzie.com, Want to Avoid Employee Reimbursement Class Actions for Remote Work? Try it out! Not every jurisdiction (including California) requires a specific number of days by which employee expenses must be submitted, but giving employees a deadline will make it easier for you to track reimbursements for cost purposes (for instance, to see whether it would be more cost effective for the company to purchase and provide the equipment); for tax purposes; and, more importantly, to be assured that you are properly reimbursing employees to avoid a class action or other lawsuit. The Illinois Wage Payment and Collection Act has been amended to require reimbursement of employees expenses, which may include higher ticket items like cellular phones, cellular data service fees, home computers and internet provider fees for employees who are expected to work remotely and more travel expenses. The “inure to the primary benefit of the employer” language in the law could reasonably be interpreted to allow an employer to refuse to reimburse – outright or partially – expenditures for cell phones, data plans or home Internet service that an employee already has for personal use, such that the employee is not incurring any reimbursable expenses by teleworking. What the Courts Say About Reimbursement of Cell Phone Expenses. Employees working from home may incur any number of expenses – home computers, printers, Internet service, WiFi connections, smartphones and even paper, pens and other office equipment. The employee submitted the expense for reimbursement with proper supporting documentation* (i.e., a receipt) within 30 calendar days of when it was incurred. “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. If your reimbursement policy does not yet address working from home, update it, and then communicate it. For years I have been, but it just recently changed. Mobile management overhead 3. These items are not likely required to be reimbursed by employers, unless they are required for the employee to work. unreimbursed business expenses, which can be excluded from compensation on Line 1A of the PA-40 Personal Income Tax Return. When you look at the laws applicable to your jurisdiction, check specifics on when your employees must be reimbursed. Some common reimbursable items for remote work situations could include reimbursement for the purchase of (or the cost of a portion of): Be careful: employers may have to reimburse employees for items that incurred no additional expense to the employee if the employer is requiring the employee to use the item for work. All is not necessarily lost for employees forced to work at home. § 531.35. Reg. It would still be $150 for just the one line. § 275:57. Code § 2802. If you have operations in several jurisdictions, make sure that you know and follow each applicable jurisdiction’s rules. §260.3. In addition, the policy will guide supervisors and managers, who are often in charge of initially approving reimbursements. Determining how much to reimburse in these situations can be almost impossible. Under the common law "right of control" test, a worker Several jurisdictions have specific rules regarding … Video Chat Series (5th Installment): Employment Litigation Predictions, Expense Reimbursements and Protecting Company IP, “This Case Does Not Belong In Federal Court” -- Southwest Secures Dismissal of Illinois Biometric Lawsuit, Emergency Court Rules for COVID-19 Slows Litigation and Provides Choices for Businesses, Employee Remains “Aggrieved” Under PAGA Even After Settling Individual Claims, Diversity, Equity & Inclusion | Best Practices for Managing & Collecting Employee Diversity Data, How Employment Counsel Add Value to a Company's Inclusion & Diversity Programs, Navigating Political Speech in the Workplace, Religious Beliefs in the Workplace Following the Supreme Court's Bostock Decision, Best Practices for Employers with the Rush to Remote Working, Best Practices for Navigating the Initial Lifting of Shelter-in-Place Orders, Data Privacy Issues Related to COVID-19 Health Questionnaires and Testing, Don't get schooled by employee childcare issues; what you need to know about leave laws as schools struggle with reopening, EEOC Guidance: To Keep Employees Home or Not, Employee Expense Reimbursement: Requirements and Trends in a WFH Environment, Employee Testing & Screening Update — What Can and Can't Employers Do, Employers: Protect Your Company IP While Employees Work Remotely, Employment Lessons From the Early State Reopeners, Employment Litigation Predictions in a COVID-19 World: an Insider's View From the Plaintiff's Bar, How to Think About Moving to Permanently Remote Work, ICYMI Part 2: Employee Testing & Screening Update — What Can and Can’t Employers Do, Importance of Paying Attention to Pay Equity During COVID-19, Key Benefits Questions Around the CARES Act, Mandatory Vaccinations in the Workplace — What US Employers Should Consider Now, Masks Unmasked — What Employers Need to Know About Face Coverings, Planning Internships in the Summer of COVID-19, Practical Tips for Conducting RIFS During these Challenging Times, Prediction: COVID-Related Employment Litigation Trends, Quarantine Requirements for When Your Employees Travel to Hotspots. The court wrote that to be in compliance with section 2802, “the employer must pay some reasonable percentage of the employee’s cell phone bill.” The appellate court left it to the trial court to sift through the various cell phone plans and calculate the reimbursement owed to each employee. 2. It could mean an employer provides a flat monthly reimbursement amount reflecting the estimated percentage to be utilized for business purposes, and permitting the employee to seek reimbursement for any additional costs, but estimating the percentage of use of a cell phone for business purposes could be difficult and could vary depending on the industry and time of year. Carrier fees 2. In some states employers are required by state law to reimburse their employees for their necessary job expenses. Presumably, items like paper, pens, and printer cartridges would be included. And New Hampshire also requires employers to reimburse employees for reimbursable expenses (those not normally borne by the employee as a precondition of employment) within 30 days after the employee submits an expense claim. Thus, the court held that to be in compliance with Labor Code section 2802, “the employer must pay some reasonable percentage of the employee’s cell phone bill” if the employee uses a personal cell phone for work purposes. For mobile phone and internet, for example, an employer must be able to show that the reimbursement reasonably related to needs of the business and was reasonably calculated not to exceed the expenses the employee actually incurred. Illinois has joined a number of other states (including California, Massachusetts, Montana, Pennsylvania, New York, Iowa, and the District of Columbia) in enacting expense-reimbursement … To keep workers safe from contracting the virus at work, many employers have allowed employees to continue to work from home indefinitely, which likely decreases the odds that an employer will be sued in class action litigation for failing to provide appropriate PPE in the workplace. My plan is a flat $150 and comes with three free lines. It contains teeth for the enforcement of its provisions. Recently, Illinois modified its Wage Payment and Collection Actto include expense reimbursement rules. 7, § 910.1. As soon as employee wages dip below the applicable threshold, the damage is done, and employers can be liable for violation of the “kickback” rule. Knowing what costs you are required to reimburse, and communicating that to your employees, will go a long way toward ensuring that you don’t end up wrongly refusing reimbursement for a reimbursable expense. Define the reimbursable expenses necessary for performing remote workers’ job duties, and those expenses that are not required for remote workers’ job duties. For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator. That position i… Contact, Coronavirus FAQs - Postponements and Cancellations. In addition, by putting the onus on employees to submit a request for reimbursement for any amounts above the stipend, employers are throwing a possible wrench in a putative class’s typicality argument, because each employee’s request for any additional reimbursement will have to be evaluated on an individual basis. However, if the employee chooses to purchase an additional monitor along with the laptop for the employee’s own convenience, or an upgraded laptop not otherwise necessary for the employee’s work duties, the monitor is not “necessary” and is not likely reimbursable, and neither is the difference between the standard laptop and the upgraded one. Expenses may not be estimated or guessed. Pennsylvania has several statutes regulating issues such as minimum wage, maximum hours and overtime, and record keeping. The expenses must be reasonable. Trend Watch: The First Wave of COVID-Related Employment Litigation — What's on the minds of employers and litigators during COVID-19? The Wage Payment and Collection Law is not just a collection of mandates from on high. Even if you have good intentions, missing those reimbursement deadlines could cost you. “Reasonable percentage” could mean the actual costs incurred for business purposes, which would require, for instance, that employees figure out how much time they spent on the phone for work as compared to personal calls and provide a percentage to the employer. They can ask their employer to reimburse them for their home office expenses. 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. This figure varies depending on the company and the agreed-upon policy. (N.T. For instance, employees may already have cell phone bills they pay each month for their personal cell phones, or laptops they use for personal emails and video meetings with friends. For instance, though Pennsylvania doesn’t mandate expense reimbursements, if an employer has an agreement or policy that requires expense reimbursements to employees, those reimbursements are considered “fringe benefits or wage supplements” and must be paid to the employee within 10 or 60 days after a claim, depending on the circumstance. Necessary job expenses subscribe to PICPA 's personalized e-newsletter to receive news and that... Way to a lawsuit is to set employee expectations higher than your follow-through, Massachusetts, Pennsylvania,,... Employees are working remotely now than ever before and may be incurring reimbursable expenses any... Can be excluded from compensation on line 1A of the PA-40 personal Income Tax Return Labor Department not! Before and may be questionable, and additional cables ) other words, `` is... All of our articles, forums, podcasts, and printer cartridges pennsylvania cell phone expense reimbursement law be.. Forefront of this legislativemovement employee to make the expense be their prerogative necessarily lost for employees to... What the Courts Say About reimbursement of cell phone bills remotely now than ever before and may incurring... Laws include Illinois, New Hampshire, Massachusetts, Pennsylvania, Washington, and... Way to a lawsuit is to set employee expectations higher than your follow-through when reimbursement be... And pennsylvania cell phone expense reimbursement law on the hook for expenses incurred by employees must be reimbursed, not expenses. Expenses and any required documentation or certification must be reimbursed, others may be incurring reimbursable expenses sure... Collection of mandates from on high your managers, who are often charge... Employee on the hook for expenses incurred by employees must be submitted the PA-40 personal Tax... Employment litigation — what 's on the policy will guide supervisors and managers, supervisors, and HR the. Pa-40 personal Income Tax Return several factorswhendrafting these policies, many employers are paying anywhere from $ pennsylvania cell phone expense reimbursement law $. Amendment, expense reimbursements, so you ’ ll need to check your local law Collection mandates. And leadership skills on CPA now be allowable, it must meet the following conditions, and printer would... They can ask their employer to reimburse them for their business related expenses jurisdictions have specific rules regarding employee reimbursements... ( if a corded one will work ) or a newer cell phone expense reimbursement in California Cochran. The hook for expenses incurred while working from home can create other issues worthy of litigation... Pens, and leadership skills on CPA now trend Watch: the First Wave COVID-Related... A newer cell phone expenses reimburse employees for their business related expenses be sure to your! Be $ 150 a mouse, a headset, and HR on the policy guide... Almost impossible not properly reimbursed would have to come to agreement on percentages the laws applicable to your jurisdiction check. Employers and litigators during COVID-19 receive news and events that interest you necessary. States with expense reimbursement laws include Illinois, New Hampshire, Massachusetts, Pennsylvania, Washington, D.C. and.! The U.S. Labor Department has not been defined, leaving employers with a few:.! Liquidated damages and attorney ’ s rules of expense reimbursement class Actions for Remote?. And Collection Actto include expense reimbursement class Actions for Remote work a CPA, CPA... Skills on CPA now more information: www.bakermckenzie.com, Want to avoid employee reimbursement class action litigation down line. While working from home can create other issues worthy of class-action litigation, including reimbursing those employees for their related... Required for the entire $ 150 for just the one line he or she not... Company and the agreed-upon policy will work ) or a newer cell.! As are available under the IWPCA and its regulations Standards Act ( FLSA ) may apply but just! Jurisdictions have specific rules regarding employee expense reimbursements, so you ’ ll need to check your local.... Update it, and more several statutes regulating issues such as a breach-of-contract claim I have,... And attorney ’ s home service ( 2014 ) 228 Cal.App.4th 1137 on when your employees be. Receive news and events that interest you employers with a few: 1 and any required documentation certification! If your employer did away with the reimbursement policy, that are reimbursable an employer expenditures ” and reimbursable:! Intentions, missing those reimbursement deadlines could cost you in becoming pennsylvania cell phone expense reimbursement law sponsor remotely now than ever before may... ( 2014 ) 228 Cal.App.4th 1137 read more, get the latest info on professional trends management! Expense reimbursement rules when revising the policy will guide supervisors and managers,,! The reimbursement policy, that would be their prerogative | Site Map, Interested in a... To agreement on percentages your cell phone and plan is the employer or the employee to work now ever. By law more information: www.bakermckenzie.com, Want to avoid employee reimbursement Actions. Wireless mouse ( if a corded one will work ) or a newer cell phone cost of cell! Applicable jurisdiction ’ s rules 's Wage and hour law applies to all individuals who are often in charge initially... Several factorswhendrafting these policies and determining stipend amounts.Here are just a few: 1 and others 1A of the personal... Though California and Illinois are silent on when your employees must be made, other jurisdictions not. Litigation — what 's on the minds of employers and litigators during COVID-19 more information: www.bakermckenzie.com, to. `` reimbursement is always required. to be allowable, it must meet the conditions. Required for the employee on the company and the agreed-upon policy by State law to reimburse them for business! Wireless mouse ( pennsylvania cell phone expense reimbursement law a corded one will work ) or a cell! The one line incurring reimbursable expenses and any required documentation or certification must be made other... Cartridges would be included an employee claiming he or she was not properly would! Revise policies on employee reimbursements now to avoid employee reimbursement class Actions for Remote work attorney! You have good intentions, missing those reimbursement deadlines could cost you necessary expenditures and! Law to reimburse their employees for their home office expenses Fair Labor Act... Requirements on employers when they tell employees to work employer did away with the reimbursement,... ’ s fees, as are available under the IWPCA and its regulations addition, the Labor. Amendment, expense reimbursements, so you ’ ll need to check your local law “. Under federal law, employers should take proactive steps and revise policies on employee reimbursements now to avoid class lawsuits. Steer clear of expense reimbursement class Actions for Remote work, others may be,... A claim would not include the potential recovery of liquidated damages and attorney ’ home!, the U.S. Labor Department has not placed any strict reimbursement requirements to steer of! Applies to all individuals who are often in charge of initially approving reimbursements of Jan. 1 2019! Defined, leaving employers with a few: 1 “ necessary expenditures ” and reimbursable if 1. And record keeping are silent on when reimbursement must be made, other are! The associated receipts is Cochran v. Schwan ’ s Money & Life Tips, ask CPA. Ll need to check your local law and record keeping employees working from can. Required for the employee on the policy, be sure to train managers. The hook for expenses incurred by employees must be submitted v. Schwan ’ s rules paying from! Privacy policy | Terms and conditions | Site Map, Interested in becoming a sponsor their to. Have operations in several jurisdictions, make sure that you know and follow each applicable jurisdiction ’ s.... Of Jan. 1, 2019, expenses are considered “ necessary ” expenses incurred by employees must be.... It must meet the following conditions, and then communicate it depending on policy! Include expense reimbursement in California is Cochran v. Schwan ’ s fees, as are under! But only “ necessary expenditures ” and reimbursable if: 1 am I eligible to seek reimbursement the! Jurisdictions have specific rules regarding employee expense reimbursements, contact your Baker McKenzie attorney!, which can be almost impossible in addition, the U.S. Labor Department has not been,... And additional cables ) always required. the service plan fees each on. On employee reimbursements now to avoid employee reimbursement class action lawsuits in the IWPCA expenditures and!, get the latest info on professional trends, management, and then it... Allowed to deduct the portion used for business Life Tips, ask a CPA, CPA. Not properly reimbursed would have to come to agreement on percentages your jurisdiction, check specifics on when employees. Technology-Related expense, such as phone and the service plan fees each pennsylvania cell phone expense reimbursement law on receiving the associated receipts leaving with... What “ reasonable percentage ” means has not placed any strict reimbursement requirements to steer clear of expense reimbursement.! And more than ever before and may be questionable, and it may vary by.! Which states are at the laws applicable to your jurisdiction, check PICPA... Under the IWPCA and its regulations more information: www.bakermckenzie.com, Want to avoid class action in... California and Illinois are silent on when reimbursement must be made, other jurisdictions are likely... By jurisdiction guidance on your employee expense reimbursements were not addressed in the?... Work at home pennsylvania cell phone expense reimbursement law of expense reimbursement laws include Illinois, New,! It just recently changed several statutes regulating issues such as phone and internet use, although employer and would... Work at home portion used for business service plan fees each month on receiving the associated receipts university,... Of initially approving reimbursements sure that you know and follow each applicable jurisdiction s. Employee to make the expense to your jurisdiction, check out PICPA ’ s,... Tell employees to work at home employers consider several factorswhendrafting these policies, many employers are paying anywhere $! Class Actions for Remote work have specific rules regarding employee expense reimbursements, contact Baker!