Many employees incur business-related expenses as part of their jobs. For example, a worker might travel for their job and pay for a hotel, meals, transportation, and client entertainment. Other workers might purchase office supplies, business cards, or malpractice insurance for themselves. They might also pay for the creation of websites or videos.
These out-of-pocket expenses can really add up. But who is ultimately responsible for them? Unfortunately, New Jersey has no general law that requires an employer to pay out-of-pocket business expenses. But this does not mean that employees are not without rights.
Can NJ Employer Make Me Pay for Business Expenses? First Check Your Employment Contract
Any employment contract should state who is responsible for out-of-pocket business expenses. Unionized workers should also have collective bargaining agreements that mention the same. If your agreement states that the employer will pay, then any refusal constitutes a breach of the agreement. You should qualify for reimbursement and cannot be fired if you refuse to pay for the expenses.
Read Your Employee Handbook or Manual
These documents can also state the employer’s procedures for reimbursement of business-related expenses. When these documents are sufficiently detailed, they can become contractual in nature, which means you cannot be forced to incur the cost.
Talk to Your Employer
Your employer is allowed to deduct these costs as a business expense, which will lower the company’s overall tax burden. This should be enough reason for your employer to reimburse you for these out-of-pocket expenses. Provide requested receipts or other proof of how much you paid so you can be fully reimbursed.
Unfortunately, you can’t claim these deductions yourself, thanks to the recent Tax Cuts and Jobs Act that was passed in 2017. Before its passage, employees could take itemized deductions for miscellaneous expenses if they exceeded 2% of a filer’s adjusted gross income. It was not much of a deduction, but it provided a little financial relief. Now that deduction has disappeared.
What Are Your Legal Options?
Some states, such as California, have passed laws mandating that an employer pay for an employee’s business expenses. That is not the law currently in New Jersey. Nor is there a federal law that requires employers to provide reimbursement of out-of-pocket expenses. New Jersey has not yet passed anything that can force an employer’s hand.
If you are in a dispute with your employer about expenses, you should consider your legal options with a New Jersey employment lawyer. Often, disputes break out when an employee refuses to pay for something out of pocket and is discharged. This could be the beginnings of a wrongful termination lawsuit.
In other situations, an employer might have a reimbursement policy in place but claim you are really an independent contractor who does not qualify. We can take a look at that type of claim, as well.
Please reach out to Sattiraju & Tharney, LLP today to schedule an initial consultation. Disputes with an employer can ultimately cost workers thousands of dollars, and you need to know your rights.