Cochran v. Schwan's Home Serv., Inc., 228 Cal. Some States Require Mileage Reimbursement, But Not All The employee can also ask the Labor Commissioner to cite the employer or anyone acting on the employer’s behalf under Labor Code Section 2802(d). West Virginia: HB 4003: Require telehealth insurance coverage of certain telehealth services after July 1, 2020. 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. Applicants must have a valid personal bank account for ICANN org to wire the reimbursement funds. Some, particularly in tech, may be working from home through the end of the year, or even permanently! 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. Remote work also presents other issues which are exacerbated under the current crisis. 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. 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). 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. 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. For more information: www.bakermckenzie.com, Reimbursement Refresher: Cell Phone and Internet Expenses Related to Telecommuting in the US, Annual Equity Award Filing Chart: Filing & Reporting Requirements for Global Employee Share Plans, California Employers With 100 Or More Employees Must Report Pay Data By March 31, 2021, ERISA Claim Takeaways From 7th Circ. Despite programs operated by state, federal and local governments aimed at recruiting and retaining primary care professionals to rural and underserved areas, the need outpaces the supply in many communities. Novak v. Boeing, 2011 WL 9160940 (C.D. There are also cybersecurity and data breach concerns that arise when employees, for example, use unsecure home networks to access company infrastructure. The new work-from-home reality has implications for employers with workers employed in California and other states as described in this article. 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. 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. These states require employers to reimburse their employees for all necessary business-related expenses, regardless of the employee’s wage . The Cochran case provides guidance on how to calculate a reasonable reimbursement for the mandatory use of personal devices such as cell phones: employers must compensate their employees for a "reasonable percentage" of the employee's cell phone bill under Section 2802. 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. Additionally, states may or may not explicitly apply their laws to online sales. Mandatory remote work expenses must be reimbursed in California 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. Therefore, employers may wish to review their expense reimbursement policies in advance of the law’s January 1, 2019, effective date. The purpose of this statute is "to prevent employers from passing their operating expenses on to their employees." At least one California federal court has held that phone and Internet expenses incurred by employees who choose to telecommute are not “necessarily incurred” and thus need not be reimbursed. 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. 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. Alaska, California, Illinois, Indiana, Iowa, Kentucky, Massachusetts, Michigan, Minnesota, Montana, New Hampshire, New York, North Dakota, Pennsylvania, South Dakota, and Washington, DC all have enacted statutes which bear on expense reimbursement. 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. 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. The information provided is only for research and informational purposes and should not be construed as legal counsel. 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. That’s where expense reimbursement comes in. 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. 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. Pennsylvania, and 7. Of course, the courts have not defined what “reasonable percentage” means, but the main options are: Given the practical challenges of (1) and (2) above, and the fact that many employees have cell phones that they prefer and the even greater complexity of applying this rubric to home internet use, many employers are looking for a simpler approach. "For obvious reasons, this concept would also apply to require reimbursement at the state level if failure to do so would reduce the employee's pay below the applicable state minimum wage," she added. 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. The employer’s written expense-reimbursement policy may not require employees to submit expenses less than 30 ... Other States. With over 50% of the world's population owning and using a mobile device, cell phone use has become second nature to most. 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. The potential obligation to reimburse employees for remote work expenses is not limited to California, however. See Norton Rose Fulbright's additional COVID-19 resources. 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 … 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. 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. Employers therefore could be required to reimburse employees who are forced to work from home during the COVID-19 epidemic for their reasonable and necessary home office expenses, which may include a portion of the expenses associated with: However, this may not include other home office expenses which are merely at the convenience of the employee, such as higher-speed internet, computer monitors, ergonomic chairs, or printers. New York 6. A bill, HF 2160, would require Medicaid to reimburse telemedicine services at the same rate as in-person services, and not require a face-to-face consultation prior to telemedicine services. Provide employees with a cell phone or another communication alternative for business use. Illinois requires reimbursement of all “necessary expenditures or losses” an employee incurs within the scope of employment that are “directly related to … 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. Global | The trickiest areas are cell phones and internet given that employees are now working from home because they cannot go into the office, as opposed to perhaps at their convenience. Given this, when crafting a nationwide policy, sometimes it’s simplest to use California as the high water mark. 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. Aguilar v. Zep Inc., 2014 WL 4245988, at *17 (N.D. Cal. Court decisions from California (interpreting language very similar to the new Illinois law) have consistently ruled that employers must reimburse employees for a pro-rated portion of their cell phone data plans, internet service, landline plans, and the like-even if the employee would have incurred these expenses regardless of employment with the employer. 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. For the duration of the pandemic, many employees will be forced to work from home. Under the California labor code, section 2802, all business use of a personal cell phone must be reimbursed. Whether you can receive a refund is dependent on the retailer's return and refund policies. To curb the rapid spread of COVID-19, over half of U.S. states and numerous local governments have adopted shelter-in-place orders, most of which require residents to … The program only would reimburse for the basic rate of ISP connection services, and would not reimburse charges or costs associated with service initiation, activation, installation, etc. Common types of remote-work expenses include monthly minute and data plans for cell phones, home internet, and purchases of various equipment. For many companies, this requirement has already impacted how companies implement 'Bring-Your-Own-Device' (BYOD) and remote work programs. See Cochran v. Schwan’s Home Serv., Inc. We use cookies to deliver our online services. Gattuso v. Harte- Shoppers, Inc., 42 Cal. Make sure that you understand and follow the applicable laws in the states … Class-action litigation premised on failure to reimburse certain expenses (such as home internet service for telecommuters and smartphone expenses) has been brought based … An employer should prepare a reimbursement form to facilitate the reimbursement … The law allows employees to sue their employer for reimbursement of the business use of their personal cell phone, internet, or even vehicle. Expect more litigation about when an expense triggers the employer’s statutory reimbursement obligation. With approximately 700 lawyers globally, Baker McKenzie’s Employment & Compensation group is the largest in the world and the only one to be ranked Band 1 by Chambers Global in 2020. The potential obligation to reimburse employees for remote work expenses is not limited to California, however. CCHP is committed to keeping you updated on these important changes both federally and on the state level. Local zoning regulations might require a remote employee working from home to get a zoning variance from the locality. The health care workforce is stretched to its limits in most states. Such considerations may have long-lasting effects beyond the pandemic as companies increasingly implement BYOD programs and encourage remote work arrangements which may trigger reimbursement. 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. Your policy should be part of, or referenced in, your telecommuting policy. This serves several purposes. Reimbursement for a facility fee must be subject to a negotiated agreement between the originating site and the health carrier. 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. 4th 554, 562 (2007) (internal citation omitted). You may access the article by clicking on the following link: 2802 Article. The United States (“U.S.”) accounts for the largest share of drug spending and innovation in the world, and its drug pricing regime is the most complex given its multi-payer model and unique overlay of market access requirements that collectively impact drug pricing and reimbursement decisions in the U.S. It was reprinted with permission of the State Bar of California and the California Labor & Employment Law Review. But it’ll be important to watch as courts decide how to interpret these laws and make cas… 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. As if IRS regulations weren’t enough to keep up with, some states are adding their own expense reimbursement laws that your staffers will have to comply with, too.. Novak v. Boeing Co., 2011 WL 9160940, at *3 (C.D. Below are summaries of state laws governing refunds of retail sales items: Alabama: There's no right to cancel contracts or purchase agreements. Norton Rose Fulbright Verein helps coordinate the activities of the members but does not itself provide legal services to clients. Telehealth policy changes occurring within the COVID-19 environment have been rapidly developing on almost a daily basis. December 17, 2020. Cal. For example, in Novak, Defendant Boeing offered its employees the option of voluntarily participating in a virtual worker program. Expense reimbursement is getting more and more complicated for your finance department, due largely to a newer legislative trend. The new year brings new employee reimbursement obligations for Illinois employers. Working from home (or telecommuting) is not a new concept. States such as California and Virginia reimbursing for tele-Medicaid store-and-forward would require advanced Internet in their state. Once you understand your obligations, set clear guidelines for your employees. Reimbursement Obligations There is no federal requirement to reimburse employees for business-related expenses. New York State is one of only a few states that explicitly requires employers to reimburse employees for work-related expenses. From checking emails and sending text messages to hosting video conferences, many professionals rely on cell phones as their mobile office. 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. California’s expense-reimbursement statute has been particularly troublesome for employers. 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. 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. Be aware, however, that some states have their own laws surrounding expense reimbursement. The US imposed sanctions on Turkey in response to its acquisition of the S-400 anti-aircraft missile system from Rosoboronexport. Nine states also require minimum paid rest periods for adult employees in the private sector. 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 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." 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. If they live in California, Illinois, Iowa, Montana, or D.C., yes. 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. Cal. June 21, 2019). 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). California 2. 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. If you're a business owner running a successful company, chances are you have multiple employees using their mobile devices for work. Washington, DC. Reimbursement may also be necessary under California law even when an employee does not incur additional out of pocket costs. 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. 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. If an employer pays a fixed amount in the form of a stipend, the employer's policy should allow employees to submit expenses for reimbursement if the employees believe the stipend was insufficient to cover their work-related expenses. 19, 2020). 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