3,921 Employee Educational Expense Reimbursment
Posted on 10/21/2021 at 12:49 PM by Kansas Department of Administration
POLICY AND PROCEDURE MANUAL
|Revision Date:10/29/98 |
Revisions marked #
[sample agency policy]
Authorized Payments to Employees for Tuition and Other Educational Expenses Under K.S.A. 75-5519.
To set policy, manner of payment and procedures for payment of authorized tuition and other educational expenses of employees as provided by K.S.A. 75-5519.
CITATION OF GOVERNING STATUTES
K.S.A. 75-5519 provides that "Any state agency may pay tuition and other educational expenses for the education or training of employees when it is determined by the head of the agency that such education or training is of value to the state and such state agency. All payments under this act shall be made from appropriations to the state agency in accordance with policies and procedures developed by the Secretary of Administration for the state agency and shall be approved by the head of the state agency."
Internal Revenue Code Sections 61, 3401 and 162
Under IRS code section 61, the amount of employer payments for "personal" expenses, i.e. tuition and books of an employee, is usually includable in the employee's gross income, and under IRS code Section 3401, is normally subject to withholding. However, such payments under IRS Code section 162 may be included in the employee's itemized deductions, if undertaken for the purpose of: 1) maintaining or improving skills required in employment; or 2) meeting applicable law or regulations imposed as a condition to the retention of an established employment relationship, status or rate of compensation. Conversely, expenditures for education which are "personal or capital expenditures or have the elements of both" such as those which a) are required to meet the minimum educational requirements for qualifications in present employment, or b) qualify for a new trade or business, are not payable.
Fair Labor Standards Act (FLSA) - Hours Worked
The Fair Labor Standards Act requires that each employee, not specifically exempted, receive a specified minimum wage. The act provides that persons may not be employed for more that a stated number of hours a week without receiving at least one and one-half times their regular rate of pay for the overtime hours. The following general statements apply to non-exempt state employees only.
Time attending training is not counted as working hours if the time is outside of regular working hours and the training is voluntary and the training is not directly related to the employee's job and the employee performs no productive work during attendance.
Involuntary attendance is defined as training that is required by the employer or the employee is given to understand, or is led to believe, non-attendance would adversely affect their employment.
Training directly related to the job is defined as training designed to make the employee handle his/her job more efficiently and is not designed to train the employee for another job, or a new or additional skill. Examples provided in FLSA regulations are: 1) A steno taking a course in stenography - (counted as hours worked) and 2) A steno taking a course in bookkeeping (not counted as hours worked-if voluntary). FSLA further provided that if a course is intended to prepare an employee for advancement to a higher skill (not intended to improve efficiency in present job) it is not considered directly related, even though it may incidentally improve current job skills.
Independent training, where an employee attends on own initiative, is not counted as hours worked.
FLSA included the following example as a special situation: If an employer established, for the benefit of employees, a program of instruction which corresponds to courses offered by independent bona fide institutions of learning, voluntary attendance outside of working hours are not hours worked, even if directly related to the employee's job, or paid for by the employer.
Travel time: Hours worked related to travel time is dependent upon the determination of the classification of training. In cases where it is determined that time in attendance at training is considered hours worked, travel time related to such training would also be considered hours worked.
Classifications of Training and Programs Established
To harmonize these various statutory provisions, it is necessary to adopt classifications of education and training so that proper treatment of each situation can be afforded under the appropriate statutes. The categories under which proposed payments are made should be stated on all vouchers submitted for payment. The basic categories are: 1) Regular in-service training, in-house training program; 2) Regular in-service training, outside training program; 3) Voluntary in-service training, in-house training programs and outside training programs; 4) Upgrade training, in-house training program; and 5) Upgrade training, outside training program.
|Category||Comments on Method of Payment|
|Regular in-service training, |
in-house training program
|Exempt from employment taxes. Payments for costs involved in training should be paid by regular voucher procedure to the vendor supplying training services or commodities. Payment to non-exempt employee for time in attendance at lectures, meetings, training programs and similar activities is required under FLSA.|
|Regular in-service training, |
outside training program
|Exempt from employment taxes, but covered by wage and hour law provisions. Payments for costs involved in training programs shall be paid by regular voucher procedure to the vendor(s) supplying training services or commodities. Payments to non-exempt employees for time in attendance at lectures, meetings, training programs and similar activities may be required under FLSA.|
|Voluntary in-service training, |
in-house training programs
|Exempt from employment taxes. Payments for costs involved in training program should be paid by regular voucher procedure to the vendor supplying training services or commodities. Payment to non-exempt employees for time in attendance at lectures, meeting, training programs and similar activities may be required under FLSA.|
|Upgrade training, |
in-house training program
|Upgrade training, |
out-side training program
As used herein, the following words and phrases shall have the meanings respectively ascribed to each of them, unless a different meaning is plainly required by the context:
|Words and Phrases||Definitions|
|Eligible "personnel" or "employee"||Any appointed or elective officer or employee of a participating agency whose employment is not seasonal or temporary and whose employment requires at least one thousand (1,000) hours of work per year.|
|Types of training|
|In-service training||Training directly related to the employee's job and is distinguished by its design to prepare the employee to handle his/her job more effectively.|
|Voluntary in-service training||Training which relates to the employee's job but which may add new or additional skills.|
|Upgrade training||Training (which is not authorized) instituted for the purpose of preparing an employee for advancement through upgrading the eligible employee to a higher skill, and is not intended to make the employee more efficient in his/her present job, even though the course incidentally improves his/her skill in doing his/her regular work.|
|Types of programs|
|In-house training programs||Programs established and supported by the Kansas Certified Public Managers (CPM) Degree Program and by agency officers and employees.|
|Outside training programs||Includes the authorized courses of study normally provided by professional associations, colleges and universities and by training agencies, such as the U.S. Civil Service Commission, and approved for financial participation by the State agency by reimbursement of authorized tuition and other educational expenses.|
Criteria and Conditions
Each state agency will establish the criteria and conditions to be used in selecting, assigning or allowing employees to participate in training programs and in awarding training payments. The criteria will be filed with the Office of the Chief Financial Officer. Sample criteria are provided beginning on page 7 of this filing.
Non-applicability to Programs Authorized by Other Statutes
These guidelines apply only to expenditures authorized by K.S.A. 75-5519.
Discrimination against any person in making training awards because of political or religious opinion or affiliation, or because of race, national origin or ancestry or because of sex, age, or physical handicap, is prohibited.
Duplication of Benefits Prohibited
Payment by any agency for tuition, material, per diem, lodging, or other form of remuneration or reimbursement in connection with any training referred to above is prohibited if it duplicates such payments from any other source. This does not prohibit the planned sharing of costs or expenses by more than one source but the agency(s) must explain fully on the voucher(s) when such sharing is contemplated.
|Office of the Chief Financial Officer|| |
Questions regarding an agency's tuition policy or FLSA matters should be directed to the agency's human resources staff or business office.
Questions regarding payment vouchers should be directed to:
Office of the Chief Financial Officer
Audit Services Team