So would cell-phone and Internet use, although employer and employee would likely have to come to agreement on percentages. My plan is a flat $150 and comes with three free lines. If an employer requires its employees to use a cell phone, computer, or tablet away from its premises, there should be a clear policy in place regarding reimbursement of any related expenses. ... many states have laws on the books requiring employers to compensate employees for any mandatory work tools. Otherwise, the employer would receive a windfall because it would be passing its operating expenses onto the employee. The appellate court ruled that “reimbursement is always required,” and the employer must pay “some reasonable percentage” of the employee’s cell phone bill to comply with the Labor Code. cell phones to complete government-related calls, instead of a government-issued telephone or pager, and receive a tiered flat rate reimbursement. Am I eligible to seek reimbursement for the entire $150? Check your state law to ensure compliance. Of course, the employer may require the employee to repay the company for those charges. Option 5: Require employees to submit expense reports to justify phone usage. 1. Written policies should make clear that listing a cellphone number as a point of contact is optional and that employees who incur additional cellphone costs for work use may submit such additional costs for reimbursement. For more information on the new law, check with Epstein Becker Green. In states that require reimbursement for business expenses, most require the reimbursement within 30 days. For years I have been, but it just recently changed. Under these policies, many employers are paying anywhere from $30 to $50 per month toward employee cell phone bills. © 2020 Ares Law Group. Most probably don’t realize that when they do, part of their cell phone costs may become reimbursable—even if they have plans with unlimited minutes. If you believe you have incurred any business expenses that have not been reimbursed, contact one of our attorneys to discuss your situation. A: Under the FLSA, if the cost would reduce the employee’s pay below the minimum wage or cut into overtime, the reimbursement must be made no later than the next regular payday. The cellular phone equipment allowance includes all related accessories such as batteries, cases, covers, chargers, etc. The following memo was just released by the IRS and is addressed to IRS auditors on cell phone usage and reimbursement by employers of employee personal cell phone for business usage and the employer paid cell phone used for some personal usage by the employee. Absolutely criminal that any employer can require an employee to use their own personal phone without any reimbursement. Call center features are withheld from your employees under a BYOD cell phone policy. and then tell you they won’t pay you for it. While these standards don't apply in every state or country, employers should be aware of the standards currently being enforced in California, because history tells us that most U.S. states that favor the employee will be following suit. However, many employees possess unlimited phone data and plans, making it difficult to separate the costs for personal and work use. I am eligible for reimbursement from my employer for my cell phone. Your company required or approved the employee to make the expense. 1. In those instances, California courts have required employers to reimburse a reasonable percentage of the employees’ phone bills. Presumably, items like paper, pens, and printer cartridges would be included. The policy will state the following: Question: Is there a salary cap on this guidance => “However, some states have their own laws surrounding expense reimbursement. In an effort to prevent the spread of Covid-19, many employers are permitting, and in some cases requiring, employees to work from home. That way, you’ll be able to see the total bill amount and avoid reimbursing more than that. Phones are no different. Illinois was the newest addition this year. Your nonprofit's employees or volunteers are likely to have business-related expenses that they pay out-of-pocket. There are two primary patterns for allowing government employees to utilize cellular phones. Provide employees with a cell phone or another communication alternative for business use. Ne… Arguably, such expenses are also reimbursable under Section 2802. Therefore, regardless of whether an employee has a limited or unlimited cell phone plan, the employer’s obligation is the same: “The reimbursement owed is a reasonable percentage of [the employees’] cell phone bills.” Employers have a duty to determine what that reasonable percentage is, and to reimburse their employees accordingly. I. It is well known that employers must reimburse California employees for cell phone use when employees are required to use their personal cell phones for business purposes. An employee may not decide on their own to use a personal cell phone without informing their employer and then demand reimbursement. In the United States, expense reimbursement is only required in a couple of cases. If employees do not comply with the employer’s policies, the employee need not be reimbursed. Employee benefit plans may also define reimbursable expenses such as adoption assistance, or tuition reimbursement. Recently, Illinois modified its Wage Payment and Collection Actto include expense reimbursement rules. We have no objection to WAPA reimbursing employees for government use of personal cell phones; however, without specific statutory authority, WAPA may not reimburse employees at a flat rate instead of reimbursing for actual expenses. Potential Damages. The employee submitted the expense for reimbursement with proper supporting documentation* (i.e., a receipt) within 30 calendar days of when it was incurred. The court agreed and determined employers must reimburse employees “some reasonable percentage of the employee’s cell phone bill.” Taxable reimbursements and payments The State of California has led the way in defining what employers are required to do when asking officers to bring their personal phones to work. The method used to submit expenses for reimbursement. 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 use of the personal cell phone must be directed or approved by the employer. In Illinois, unlike California, employees need to submit the expenses they wish to be reimbursed within 30 days of incurring the expense. a. Employer may regulate use or possession of such devices in the workplace; reasonable limitations are common. Unlike California, Illinois’s new expense reimbursement law allows employers to establish written expense reimbursement policies specifying the amounts and requirements for any such reimbursements. Therefore, employers may wish to review their expense reimbursement policies in advance of the law’s January 1, 2019, effective date. Expense reimbursement: In a typical reimbursement policy, employees purchase a cell phone (from a list of company-approved devices) along with the service plan. 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. Thus, to be in compliance with section 2802, the employer must pay some reasonable percentage of the employee's cell phone … 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 … The appellate court disagreed and held that reimbursement is always required, and that to comply with section 2802 the employer must pay a “reasonable percentage” of the employee’s cell phone bill. Unlike California, Illinois’s new expense reimbursement law allows employers to establish written expense reimbursement policies specifying the amounts and requirements for any such reimbursements. How much should you reimburse each employee? “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. The tax regulations of cell phone reimbursement boil down to three questions the company must answer: 1. Advantages Absolutely criminal that any employer can require an employee to use their own personal phone without any reimbursement. They are now requiring the staff members to use their personal cell phones while they are at work by using whats app (messaging app) as a business communication tool. Here are the best practices for expense reimbursement. The new law in Illinois states that employers must reimburse all “necessary expenditures”. This mean, “all reasonable expenditures … required of the employee in the discharge of employment duties and that inure to the primary benefit of the employer.”. by Jennifer Azara. Travel: Employers don’t require you to go to an office supply store to buy your own pens, paperclips, printer, computer, etc. Conversely, if an employer provides a cell phone as a benefit (specifically intended for … The employee must remain in agreement with the company’s individual reimbursement policy. Travel: Q: Do I have to reimburse employees for transportation and lodging while they travel for work? While courts have not ruled on these specific issues, we will likely see these issues arise especially given the ease and ability of employees to work remotely. The Court held that even where the plan is unlimited and the employee did not incur any additional cost, reimbursement was required under Labor Code Section 2802 because the employer would otherwise receive a windfall as it would be passing its operation expense onto the employee. Which states are at the forefront of this legislativemovement? This list would include phones, phone service, internet service, computers and/or tablets, and any communications or home … As of Jan. 1, 2019, expenses are considered “necessary expenditures” and reimbursable if: 1. California law requires your employer to reimburse you for all “necessary” expenses you incur because of your job. Expense reimbursement: In a typical reimbursement policy, employees purchase a cell phone (from a list of company-approved devices) along with the service plan. Reimbursement Obligations. This figure varies depending on the company and the agreed-upon policy. Most probably don’t realize that when they do, part of their cell phone costs may become reimbursable—even if they have plans with unlimited minutes. Less than 30 days is not acceptable according to the new law but 30 days or more is fine. 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. Employees whose employers’ reimbursement policies are unlawful may be entitled to reimbursement for past expenses and civil penalties. One of the most common job-related costs employees have is the cost of a personal cellular telephone or “smart phone.” In states that require reimbursement for business expenses, most require the reimbursement within 30 days. and then tell you they won’t pay you for it. The time it takes to compute the reimbursement to each employee. 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