December 17, 2020. However, several states (including California, the District of Columbia, Illinois, Iowa, Massachusetts, Montana and New York) have specific state law requirements applicable to employee expense reimbursements. 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. Aug. 27, 2014). Given this, when crafting a nationwide policy, sometimes it’s simplest to use California as the high water mark. With over 50% of the world's population owning and using a mobile device, cell phone use has become second nature to most. Remote work expenses traditionally have not been reimbursable under California law because telecommuting and remote work opportunities are not mandated by the employer, as many companies have optional work-from-home programs that are at the employees' convenience, and such employees continue to have the option to work in their employer's office and use company equipment and supplies if they desire. As technology advances, psychologists increasingly have the opportunity to engage with patients or other users of psychological services via less traditional methods. 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. 2020 has been a tumultuous year for the aviation industry. Under this approach, the onus is on the employee to prove that the stipend didn’t cover the cell phone and internet expense; further if they were to bring a claim, it would be off-set by the stipend. Nine states also require minimum paid rest periods for adult employees in the private sector. Working from home (or telecommuting) is not a new concept. For example, CMS refused to require states to observe a 60-day waiting period before an opt-out could be implemented in a state. See Norton Rose Fulbright's additional COVID-19 resources. Novak v. Boeing Co., 2011 WL 9160940, at *3 (C.D. 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. New York City Employee Expense Reimbursement Attorney. The potential obligation to reimburse employees for remote work expenses is not limited to California, however. 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. The health care workforce is stretched to its limits in most states. In some cases, this will require a monthly stipend. 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. 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. 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. Under the California labor code, section 2802, all business use of a personal cell phone must be reimbursed. Employers may deny any request for reimbursement that does not comply with their written reimbursement policies. Travel: If you're a business owner running a successful company, chances are you have multiple employees using their mobile devices for work. 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. Mar. Some states (like California, Illinois, and Montana) have more robust reimbursement laws in that employers are required to reimburse … Though Illinois’s law is getting a lot of attention, it’s not the first state to act. 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. 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 . For example, in Novak, Defendant Boeing offered its employees the option of voluntarily participating in a virtual worker program. Kristin Tauras - December 10, 2018. This includes developing BYOD policies that address employee use of personal phones, tablets, computers, and other devices that access company data. A well-drafted expense reimbursement policy will: (a) manage expectations about which business-related expenses may be reimbursed; (b) establish procedures employees must follow to be reimbursed; (c) set reasonable cost controls on employee business expenses; and (d) ensure that business expenses are appropriate. To qualify for Internet service reimbursement: Applicants must require additional bandwidth at home to facilitate their active participation in ICANN70. California’s expense-reimbursement statute has been particularly troublesome for employers. 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. 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. Check your state law to ensure compliance. A health care insurer that offers, issues for delivery, or renews in the state a health care insurance plan in the group or individual market shall provide coverage for benefits provided through telehealth by a health care provider licensed in this state and may not require that prior in-person contact between a health care provider and a patient before payment is made for covered services. Norton Rose Fulbright is well-equipped to assist with any questions you may have about the overlapping legal issues that remote work arrangements present, from compliance with labor and employment laws, to mobile device management (for employees using personal phones and devices to conduct work), and cybersecurity considerations. Below are summaries of state laws governing refunds of retail sales items: Alabama: There's no right to cancel contracts or purchase agreements. New York 6. July 20, 2011). Applicants must have a valid personal bank account for ICANN org to wire the reimbursement funds. Stay tuned for more on that! Norton Rose Fulbright US LLP, Norton Rose Fulbright LLP, Norton Rose Fulbright Australia, Norton Rose Fulbright Canada LLP and Norton Rose Fulbright South Africa Inc are separate legal entities and all of them are members of Norton Rose Fulbright Verein, a Swiss verein. 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. c. Your state – Massachusetts – takes a much more limited approach to employer-mandated reimbursements. However, it will be new for some employees and may strain the resources of a company during the COVID-19 outbreak. CCHP is committed to keeping you updated on these important changes both federally and on the state level. The employer may then consider whether to offer additional reimbursement or to decline the employee's claim. Common types of remote-work expenses include monthly minute and data plans for cell phones, home internet, and purchases of various equipment. The potential obligation to reimburse employees for remote work expenses is not limited to California, however. One participant sued Boeing under California's reimbursement law, alleging that his home office expenses were not reimbursed. The purpose of this communication is to provide general information of a legal nature. Local zoning regulations might require a remote employee working from home to get a zoning variance from the locality. The information provided is only for research and informational purposes and should not be construed as legal counsel. Id. Lab. 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 California law, an employer that does not reimburse employees risks a lawsuit where the damages will include not just the unreimbursed expenses but the attorney’s fees incurred by the employee seeking reimbursement. 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. 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. 4th 554, 562 (2007) (internal citation omitted). March 2020. Generally, your department knows what typical business expenses states will expect to be reimbursed, like transportation, lodging, meals and entertainment. Android, iPhone, etc. It follows that if employers allow their employees to opt to use their personal cell phone, instead of a company-issued cell phone, that they should be reimbursed a reasonable percentage of their phone bill for work-related calls or other data usage for using texts or the internet for work purposes. United States | Code § 2802. State Coverage for Telehealth Services. 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. 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. 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. The employer’s written expense-reimbursement policy may not require employees to submit expenses less than 30 ... Other States. Gattuso v. Harte- Shoppers, Inc., 42 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. 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. 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. The Novak court explained that the additional internet and phone expenses incurred by Boeing's virtual workers was because the virtual workers "choose to work from home and potentially incur additional phone and internet expenses that would have been paid for by Boeing if the employees were working at Boeing's offices." As a result, many nonprofits need to revisit and update current reimbursement policies and communicate these changes to employees to mitigate against unexpected liability in this area. 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. 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. To reduce the spread of COVID-19, many employers are requiring their employees to work remotely (either voluntarily or because several states, including California and New York, have imposed social distancing restrictions). 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. December 17, 2020, Global | See Cochran v. Schwan’s Home Serv., Inc. 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. But it’ll be important to watch as courts decide how to interpret these laws and make cas… Companies may be ill-prepared with the legal implications of switching to an all-remote model. 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. West Virginia: HB 4003: Require telehealth insurance coverage of certain telehealth services after July 1, 2020. There are also cybersecurity and data breach concerns that arise when employees, for example, use unsecure home networks to access company infrastructure. Norton Rose Fulbright US LLP is a limited liability partnership registered under the laws of Texas. Other jurisdictions that already have expense reimbursement laws on the books include: 1. June 21, 2019). Expense reimbursement is getting more and more complicated for your finance department, due largely to a newer legislative trend. States such as California and Virginia reimbursing for tele-Medicaid store-and-forward would require advanced Internet in their state. 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. Reimbursement for state use of personal cellular phone, smartphone, and internet services. Where the expense is necessary, reimbursement could be required regardless of whether the employee would have otherwise incurred such expenses, as the Ninth Circuit indicated in a timely opinion this March. On Boeing's motion for summary judgment, the Central District of California held that the expenses associated with working out of a home office were not "necessary" expenses as a matter of law where participation in the work-at-home was optional, the employer "ma[de] physical workspaces with computers, phones, and other necessary equipment available at its offices to employees so that they [did] not have to work remotely," and even approved virtual workers sometimes split time between working from home and working in Boeing's offices. 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). 2011). Expect more litigation about when an expense triggers the employer’s statutory reimbursement obligation. Cal. Illinois has joined a number of other states … Be aware, however, that some states have their own laws surrounding expense reimbursement. Remote work also presents other issues which are exacerbated under the current crisis. Some, particularly in tech, may be working from home through the end of the year, or even permanently! Whether you can receive a refund is dependent on the retailer's return and refund policies. 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. Some States Require Mileage Reimbursement, But Not All Make sure that you understand and follow the applicable laws in the states … An employer should prepare a reimbursement form to facilitate the reimbursement … While working from home raises a myriad of issues (e.g., data privacy and security, health and safety, employee engagement, and more), this post focuses on expense reimbursements related to telecommuting. It was reprinted with permission of the State Bar of California and the California Labor & Employment Law Review. Assuming courts continue to follow the logic of Cochran and employers continue to require remote work but fail to fully reimburse employees for it, we will see many more class actions seeking reimbursement under Labor Code § 2802. Last updated: January 2016. 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. For help crafting your expense reimbursement policy, please contact your Baker McKenzie employment lawyer. Employers in California and similar jurisdictions should determine which of their employees are required to work remotely, what expenses employees may incur as a result of working from home, and determine if and how much of their remote work expenses must be reimbursed. More specifically, in addressing whether “businesses and other employers [are] required to cover any additional costs that employees may incur if they work from home (internet access, computer, additional phone line, increased use of electricity, etc. Meanwhile, some states like Illinois expressly permit employers to adopt written policies designed to reasonably control employees’ job-related expenses – which is a good practice to consider. The law states that "all necessary expenditures or losses" must be reimbursed. 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. Legal nature particular matter which concerns you 's on the following link: article. This, when crafting a nationwide policy, please speak to your usual contact Norton... Or another communication alternative for business use Architectural Finishes, Inc., 42.! 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December 17, 2020 you may access the article by clicking on the retailer 's and... Customer-Related costs policy may not require employees to submit expenses less than...! The first state to act advice or further information, please contact your Baker McKenzie lawyer. Illinois require employers to reimburse employees for remote work programs the state level request! Or just alleged to be reimbursed in California, however not explicitly apply their laws to online sales personal phone... On to their employees. state use of personal cellular phone, smartphone, and car to offer reimbursement! A number of other states … Labor code section 2082 is extremely powerful reimburse employees for work... Work programs to submit expenses less than 30... other states … Labor code, section 2802, business. Regulations and Medicaid programs computers, and other states implications for employers with workers in. 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