The Court also warned that employee cannot waive the right to be fully reimbursed for their actual expenses: Follow the firm on Twitter, Facebook, Instagram, YouTube, and LinkedIn. Before founding Cadence Counsel, Danielle practiced as a litigator at Latham & Watkins, representing major corporations and senior executives in complex civil and criminal matters. Gone are the days of hand-written paper mileage logs and time-consuming expense reports. In my role leading the legal function at Motus, I have turned to several of the nationwide General Counsel listservs to share and learn from others as we all navigate this changing landscape in real time. It is therefore important that employers ensure that the nature of the tasks being performed remotely by their exempt personnel are largely exempt-qualifying. If you’re tempted to avoid the substantiation complexity by simply allowing the stipend to be taxed as compensation, you and your employees stand to lose a meaningful amount. One question that has come up many times with these legal leaders is this: While I may not have answers to many of the “new-normal” questions we’re facing, as CLO of a business that calculates business reimbursements for mixed-use assets, I can shed some light on factors businesses should consider for WFH. California law protects employees who use their own money or equipment at work. An Employer’s Duty to Reimburse. b. California is in the forefront of states mandating that employers reimburse employees for work-related expenses. As more employees become remote, this inefficiency only multiplies. Under the California Labor Code, an employer is required to reimburse an employee for all necessary expenditures or losses incurred directly related to the job. Even if employees have “unlimited” phone or internet plans, It’s also worth noting that a Work From Home reimbursement is especially meaningful after the recent Tax Cuts and Jobs Act tax reform, which, A fair and accurate reimbursement should account for a number of factors, which can vary, Phones: device costs, carrier costs, taxes, insurance. In California, that can include home internet bills. Insight and Commentary on Wage and Hour Law Developments Affecting Employers. Reimbursement of Work-Related Expenses. If, however, it is mandatory (e.g., the employee COVID-19, Work-from-Home Policies, and Maintaining Wage and Hour Compliance, 2021 Minimum Wage Increases Set to Take Effect, California Court of Appeals Concludes That California Wage and Hour Laws Extend to Offshore Workers, Time Is Money: A Quick Wage-Hour Tip on … Predictive Scheduling Laws, California Court of Appeal Rules That the FAAAA Does Not Preempt State’s Controversial Independent Contractor Test, Proposition 22 Passes in California, Further Narrowing AB5 –, employment, labor, and workforce management. When employees pay for work related expenses, the employer has no obligation to pay them back. The world is a different place today than it was a month ago – or even a week ago. As the number of U.S. states reporting cases of COVID-19 coronavirus increases, many employers are imposing mandatory work from home (“WFH”) policies to mitigate risk of contamination and ensure business continuity. To ensure that non-exempt employees are paid for all time they are working outside the office, consider taking the following steps: Epstein Becker & Green, P.C., is a national law firm with a primary focus on health care and life sciences; employment, labor, and workforce management; and litigation and business disputes. Mandatory remote work expenses must be reimbursed in California. To learn more about cookies and how we use them, please review our privacy policy. Therefore, consult with an employment attorney regarding requests for reimbursement for home office equipment and services from telecommuting employees before rejecting them; … How to Optimize Your Investment and Cut Costs, Creating Tax Solutions Through Business Vehicle Technology: A Medical Device Company Reduced Its Fica Tax by Almost $500,000, If it doesn't load, you can fill out the form here. A one-size-fits-all WFH stipend for all employees – even if intended to reimburse for business expenses – is likely taxable. For example, in New York, employers other than those in the building service and farming industries must pay hourly, nonexempt employees whose workday begins and ends more than 10 hours (including any time off-duty) apart an extra hour of pay at a minimum wage for that day, known as a spread of hour payment. For more information, visit www.ebglaw.com and subscribe to our email lists. Employers must also be mindful of state-specific expense reimbursement laws, which may impose additional requirements. 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 … What tasks can employees do from home? Regardless of what you decide to pay, it is advisable to have a mechanism for employees to submit substantiated expenditures that exceed the reimbursement amount. That includes expenses you might incur while working from home. By continuing to use this site or by clicking the button below, you are providing us with your consent to our use of cookies on the site. But only some states require employers to do so. with Distinction from Stanford Law School and is a graduate of Brown University (Phi Beta Kappa, Magna Cum Laude). And while OSHA generally doesn’t inspect home offices as it does with traditional workplaces, employers must still track work-related injuries that occur with remote workers. On a personal note, I am incredibly grateful for the sharing of information, care and unity we are all witnessing during this crisis. Did you know that California Labor Code Section 2802 requires employers to reimburse employees for any necessary expenses the employees incur while doing their jobs? during the coronavirus outbreak, be aware that certain state laws require extra pay. Employees’ Personal Vehicles: If an employee is required to use her personal vehicle for work (other than for a normal c… Work From Home Laws in California. App. Employers are free to reduce their non-exempt employees’ regularly scheduled hours due to temporary closures or reduced demand. A recent amendment to the California labor code says that an employment agreement cannot force a California worker to accept the labor laws of a different state. There are a number of easy-to-use timekeeping smartphone applications. That is unless the business adds the complication of collecting receipts from all employees or otherwise substantiating the reimbursement. Please note, use of this product requires a Motus app subscription. When you look at the laws applicable to your jurisdiction, check specifics on when your employees must be reimbursed. This includes expenses as a “direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer.” 1. In response to the COVID-19 pandemic and state and local quarantines, many employers directed employees to work from home. An employee can refuse to work from home, but unless the employee has an agreement in writing or a contract that provides he or she is not obliged to work from home, the employer may add this as a new requirement. With more people working remotely from home, it’s important to know the laws in your state and how they pertain to you as an employee. For employers considering extending their non-exempt employees’ regularly scheduled hours due to increased demand, reduced staff, etc. As employees continue working from home during the Coronavirus/COVID-19 pandemic, California Labor Code section 2802, which requires employee reimbursement for all necessary expenses incurred while completing work duties, operates to ensure employers who fail to provide … Direct non-exempt employees to use software that allows them to accurately record and submit their hours remotely (and confirm in advance that the software can be accessed remotely). Other than teachers, doctors, lawyers, or employees paid on a “fee basis,” employees who are exempt from overtime must be paid for the entire workweek during which they perform any amount of work, unless the regulations authorize a deduction, such as where an exempt employee is absent from work for one or more full days for personal reasons, or for absences of one or more full days on account of sickness or disability if in accordance with a bona fide plan, policy, or practice of providing compensation for loss of salary occasioned by such sickness or disability. In California, for example, employers are obligated to reimburse employees for all “necessary expenditures or losses” the employees incur in carrying out their job duties. Motus Releases 2021 Predictions on Remote Work, Vehicles, Drivers and Business DevicesÂ, BYOD, CYOD and COPE: Differences, Drawbacks and Benefits, Arriver Services: The Rise of Services Delivered to Your Doorstep, The Importance of a Cost of Living Comparison, Vehicle Depreciation in 2020: How the Pandemic Has Affected the Auto Industry. Founded in 1973 as an industry-focused firm, Epstein Becker Green has decades of experience serving clients in health care, financial services, retail, hospitality, and technology, among other industries, representing entities from startups to Fortune 100 companies. Since many states have no employee business expense reimbursement laws, this baseline protection under the FLSA will apply. California employers must reimburse employees for business expenses that are "the direct consequence" of discharging work duties. While the basic distinction is that reimbursements are un-taxed and compensation is taxed, in practice things are more complicated. 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