Therefore, consult with an employment attorney regarding requests for reimbursement for home office equipment and services from telecommuting employees before rejecting them; … The Legislature’s intent is that employees should not bear losses or expenses incurred in the service of their employers. 5G Advantages: How is 5G Impacting the Technology Landscape? If you are using a screen reader and are having problems using this website, please call 855-266-3064 for assistance. (CalHR is not responsible for substantiating a teleworker's claim of tax deductions for operation of a home office used to perform State work. There are a number of easy-to-use timekeeping smartphone applications. Some are even free. This has raised all kinds of new needs and questions for employers of all sectors. Remind non-exempt employees that time spent reading and/or responding to emails constitutes “work.”. ; but now that more employees than ever are working from home, there are still a lot of questions. 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. Mileage reimbursement in California is required. In an actual emergency situation, however, an exempt employee does not lose exempt status by performing work of a normally non-exempt nature for a relatively limited period of time. This important statute reads as follows: An employer shall 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 … We hope the information in this post helps you and your workforce adapt and thrive. As Chief Legal Officer, Danielle is responsible for all Motus legal affairs and works with strategic business units to drive initiatives that bolster IRS and legal compliance for Motus clients. How can we help our employees feel connected and healthy from home? 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. Now armed with the legal framework above, the next step in choosing how to fairly recompense your employees is learning about your reimbursement options. Employers must also be mindful of state-specific expense reimbursement laws, which may impose additional requirements. Emergencies include those that threaten the safety of employees or a cessation of operations or serious damage to the employer’s property. Whatever the form, employers enacting WFH policies need to make sure they are appropriately compensating their workers and are otherwise complying with all applicable federal, state, and local wage and hour laws. Follow the firm on Twitter, Facebook, Instagram, YouTube, and LinkedIn. If, however, it is mandatory (e.g., the employee The world is a different place today than it was a month ago – or even a week ago. An Employer’s Duty to Reimburse. It is therefore important that employers ensure that the nature of the tasks being performed remotely by their exempt personnel are largely exempt-qualifying. On a personal note, I am incredibly grateful for the sharing of information, care and unity we are all witnessing during this crisis. If they earn at-or-close-to the minimum wage. 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? When employees pay for work related expenses, the employer has no obligation to pay them back. If exempt employees perform no work in any given workweek, they need not be paid for that week of work; however, if any absences are at the employer’s direction or the operating requirements of the business, exempt employees must be paid their full weekly salaries. Additionally, any California business with one or more employees must carry worker’s compensation insurance. In response to the COVID-19 pandemic and state and local quarantines, many employers directed employees to work from home. Recently, a California court of appeal applied Section 2802 to work-related cell phone use. Company cars: If an employer provides employees with vehicles, the employer must reimburse the employees for any expenses they incur while using the vehicles in carrying out their job duties. In California, that can include home internet bills. 2. That is unless the business adds the complication of collecting receipts from all employees or otherwise substantiating the reimbursement. California law requires employers to provide "a healthful and safe" work environment even when employees are working from home. Employers sometimes slip a “choice-of-law” provision in their contracts that says the labor laws of the employer’s home state will govern the employment … We use cookies on this website to enhance your browser experience. Under California Labor Code Section 2802 and court decisions in Gattuso v. Harte-Hanks Shoppers, Inc ., 42 Cal.4th 554 (2007) and Cochran v. Schwan’s Home Service, Inc., 228 Cal.App.4th 1137 (2014), employers are required to reimburse employees for all “necessary” and … Some employers are requiring employees who have travelled to or received visitors from mainland China (or other areas with high infection rates) and those with fever or other flu-like symptoms to remain at home for 14 days, while others are instructing half or more, up to their entire workforce, to work remotely until further notice. during the coronavirus outbreak, be aware that certain state laws require extra pay. Adopt or reiterate, as applicable, a written policy prohibiting unauthorized overtime, strictly monitor for compliance with that policy, and impose discipline for any violations. When you look at the laws applicable to your jurisdiction, check specifics on when your employees must be reimbursed. 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. 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. The California Supreme Court held that the reimbursement rate can be negotiated by parties as long as it fully reimburses the employee, and the amount does not have to be set at the IRS mileage rate. Imagine that after weeks of working remotely due to COVID-19, you return to your office only to discover a stack of papers on your desk in a folder titled “requests for reimbursement.” You peer through the contents and find cell phone bills, a receipt for a $750 printer, a bank statement with the account fees … Reimbursement of Work-Related Expenses. A one-size-fits-all WFH stipend for all employees – even if intended to reimburse for business expenses – is likely taxable. Employers requiring employees to work from home during COVID-19 quarantines should promptly review and update their expense reimbursement policies. 4th 1137 (2014), employee Colin Cochran filed a putative class action lawsuit on behalf of customer service managers who were not reimbursed for expenses relating to the work … California labor laws require employers to reimburse employees for all losses and expenditures that are a direct consequence of an employee’s work duties. 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. work-from-home due to COVID-19), the employer likely does not have an obligation to reimburse the employee for costs associated with such an arrangement — even in states that have laws requiring reimbursement of certain expenses (see below). To support a tax-free reimbursement program, employers should leverage data that accounts for each individual’s regionally-specific costs. 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 … This list would include phones, phone service, internet service, computers and/or tablets, and any communications or home office expenses that are required. She earned her J.D. California employers must reimburse employees for business expenses that are "the direct consequence" of discharging work duties. Even if you have good intentions, missing those reimbursement deadlines could cost you. 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 … Prior to joining Motus, Danielle co-founded and served as CEO of Cadence Counsel, a company that helps law firms and companies thrive in an environment where work, as we know it, is rapidly changing. 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. Employees who don't typically work from home may not have a home office. When non-exempt employees work from home, it can be difficult for an employer to monitor their hours, thereby increasing the risk of off-the-clock and overtime claims. As more employees become remote, this inefficiency only multiplies. For employers considering extending their non-exempt employees’ regularly scheduled hours due to increased demand, reduced staff, etc. 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. With a few exceptions, an employer can set any work requirements. If they live in California, Illinois, Iowa, Montana, or D.C.. Operating in locations throughout the United States and supporting domestic and multinational clients, the firm’s attorneys are committed to uncompromising client service and legal excellence. 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. Do we have the technology to support them? Please note, use of this product requires a Motus app subscription. 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. For more information, visit www.ebglaw.com and subscribe to our email lists. The Court also warned that employee cannot waive the right to be fully reimbursed for their actual expenses: As businesses and individuals try to ascertain what the new normal will look like, one thing is clear: the workplace as we’ve known it is transforming. 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. 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 addition, it is important for employers to track the type of telework performed by their exempt workforce. amount of time away from home, and; employer’s travel expense policy. 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. 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. While the basic distinction is that reimbursements are un-taxed and compensation is taxed, in practice things are more complicated. In New York, for example, certain non-exempt workers are entitled to “call-in” pay equal to the lesser of a specified hours of pay (four or three hours), or the hours of pay in the employee’s regularly scheduled shift, at the state minimum wage rate. To that end, employers should instruct non-exempt workers not to work during any unpaid meal breaks and to record accurately all such periods. (There are exceptions like when expenses cause employees to fall below minimum wage.) Employees’ Personal Vehicles: If an employee is required to use her personal vehicle for work (other than for a normal c… Insight and Commentary on Wage and Hour Law Developments Affecting Employers. With Motus, accurately capturing business mileage has never been faster or easier. Keep in mind that any state laws requiring paid/unpaid mandatory meal and/or rest breaks (e.g., California) will apply equally to non-exempt employees working remotely in … In order to maintain exempt status, an employee must perform exempt work as his or her “primary duty.”  While federal regulations do not strictly quantify the term “primary duty,”  federal law views time spent as a significant factor, and California law views time as integral to that state’s exemption standard. 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. To learn more about cookies and how we use them, please review our privacy policy. These include California, Illinois, Iowa, Massachusetts, Montana, New Hampshire, New York, Pennsylvania, and the … Remote workers have the same rights as those who work in traditional offices, though some … Establish, operate and maintain the home office, equipment, devices, and services associated with the telework arrangement; Comply with tax laws. In addition, have non-exempt workers agree in writing that they will use the firm-recommended software to document time spent working. (E.g., for every $100 of taxable stipend, $38 is lost to taxes employee and employer.) California law protects employees who use their own money or equipment at work. 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 … Second, California employers must pay their remote employees for all time worked. Mandatory remote work expenses must be reimbursed in California. Since many states have no employee business expense reimbursement laws, this baseline protection under the FLSA will apply. Employers are free to reduce their non-exempt employees’ regularly scheduled hours due to temporary closures or reduced demand. Motus is pleased to provide an offering that can help your company navigate these new workplace needs. An employee who is asked to work from home can always ask their employer to compensate them for any expenses necessary to set up a home office. Gone are the days of hand-written paper mileage logs and time-consuming expense reports. 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. However, federal regulations provide that an “emergency” does not include “events that are not beyond control or for which the employer can reasonably provide in the normal course of business.”  As a general rule, exempt employees performing non-exempt work on a prolonged basis will jeopardize the exemption. Such expenses may include gas, oil, maintenance, repairs, lease payments, and insurance. 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. But only some states require employers to do so. What tasks can employees do from home? Similar to exempt employees, non-exempt employees paid on a “fluctuating-workweek” basis under the Fair Labor Standards Act (“FLSA”) normally must receive their salary for each workweek in which they perform any work. with Distinction from Stanford Law School and is a graduate of Brown University (Phi Beta Kappa, Magna Cum Laude). There is no exception to … This was true before the pandemic. Fixed and Variable Rate Program with Motus Mileage Capture App Saves Time and Money, Leveling the Playing Field: Recruit Top Talent With a Better Mileage Reimbursement Program, What's Your Fleet Really Costing You? However, in certain jurisdictions, if an employer sends staff home after the start of the workday, it may need to pay their workers a minimum amount of pay for that day. 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. 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. Generally, employers must pay non-exempt employees the applicable minimum wage (or promised wage, if higher) for all hours worked and at least and one-half times an employee’s regular rate of pay for all hours over 40 in a work week, as well as daily overtime in certain states. Thus, in New York, if an employer sends home an employee for lack of work after they have already arrived, the employee is entitled to a minimum amount of “call-in” pay for the day. Work From Home Laws in California. Reimbursements should be for business expenses that are “reasonable” and “necessary.” So, by way of analogy, if you reimburse someone who drives their personally-owned Porsche for business, but their job simply requires them to get from point A to point B, the added cost of it being a Porsche need not be attributable to the business. Very few states have laws on this subject, and among those that do have “expense reimbursement laws,” the laws vary widely from state to state in how they address the issue. 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. b. California is in the forefront of states mandating that employers reimburse employees for work-related expenses. California employees have a broad right to reimbursement of work-related expenses. The remote work expenses that must be covered by employers in states with strict reimbursement laws includes mostly communications devices and plans.  We at Motus believe it’s critical to support our employees through this unknown time, and to empower each member of the Motus family to do their part for the health and strength of our broader community. While an employer may still have to pay overtime upon an employee’s first infraction, if the employee continues to work overtime following discipline, the employer can credibly argue that it did not “suffer or permit” the work, so long as the employer does not simply accept the benefit of the employee’s labor without promptly correcting the behavior and ensuring compliance with the timekeeping policy. 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). Mileage reimbursement in California is governed by California Labor Code Section 2802. Though California and Illinois are silent on when reimbursement must be made, other jurisdictions are not. Been faster or easier be made, other jurisdictions are not and are having problems using this website to your! Number of easy-to-use timekeeping smartphone applications – even if intended to reimburse business! Home – once a perk – is likely taxable court of appeal applied 2802. You have good intentions, missing those reimbursement deadlines could cost you expenses... Covered by employers in states with strict reimbursement laws includes mostly communications devices plans... Employees or a cessation of operations or serious damage to the COVID-19 and... 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