Employee Expense Reimbursement

hrnewbie

Is there any law that states an employer can not state in their Business and Travel Expense policy that an employee must turn in their expenses within 30 days of them incurring. If they do not turn them in by then they may not be reimbursed.

Thank you.

Sharon McKnight SPHR

I've never heard of such a law but I don't think an employer could refuse to reimburse and employee for legitimate business expenses regardless of how late the request for reimbursement is submitted.

I would address the issue, though, with a policy that let's employees know what the deadline for submitting expenses is and that if they fail to meet the deadline they would be subject to disciplinary measures (record of conversation, 1st report in writing, 2nd report in writing, and so on).

In other words, I'd address it as a policy violation with appropriate discipline. Refusing to reimburse is, in my opinion, not an appropriate disciplinary measure.

Sharon

Still Need Coffee

The way I understand it, it all comes down to what your business expense policy says. I should preface this by saying I am NOT on the payroll side of things, so some of the other forumites may need to chime in if this is incorrect.

There are a couple of considerations you need to keep in mind about the reimbursements, such as:
-- do you have an accountable plan? (see page 12 of this document: [url]http://www.irs.gov/pub/irs-pdf/p15.pdf#page=11[/url])
-- do you reimburse the expenses as employment income, which is taxable (again, see the IRS publication)
-- if you don't reimburse expenses, are you allowing the employee to then deduct the expenses on their tax return as business expenses?

In general, make sure you have a solid expense reimbursement policy, and that you are giving those payments accurate tax treatment.

Hope that helps!

NaeNae55

Our policy states that employes must submit reimbursable expenses by the 15th of the following month or it will not be reimbursed. Otherwise it is almost impossible to get expenses recorded in the correct month. We have denied reimbursements based on this policy (and oops, I was one of them). You could reimburse anyway and then handle as a disciplinary measure for breaking policies, but that didn't work for us here since most who break the policy are managers. The reimbursement is less urgent, and they complain when they get in trouble that they were too busy doing company business. So far, we have never had to deny reimbursement more than once.

In some companies employees do not get reimbursed at all, and some get less, or more, than the suggested IRS rates (per diem, mileage). Those employees who are not fully reimbursed can claim the expenses on their taxes, and those who get more than the IRS allows, must pay taxes on that difference.

Good luck!

Nae