§ 2-411. Clothing allowance policy.

I.

Purpose. To provide for an equitable clothing allowance standard for employees within the City of Effingham that have clothing allowances, to align with IRS tax guidelines for taxation of clothing allowances, and to define how the City treats clothing allowances for income, social security, and Medicare purposes.

II.

Definitions.

A.

Uniform(s) or Clothing: for the purposes of this policy, uniform(s) or clothing refers to a specific implementation of identifying clothing and personal equipment for an employee, which is required for employment, and may not be worn or adaptable for general usage as ordinary clothing. This policy applies to uniforms worn by sworn personnel and civilians required to wear specific identifying clothing. It does not refer to dress codes or standardization of employee appearance.

B.

Allowance: payments made under this policy for uniforms or clothing, whether:

1.

paid directly to employees through payroll, or

2.

reimbursed to employees, or

3.

paid directly to vendor by the City on the behalf of the employee.

III.

IRS Guidelines. IRS Guidelines require amounts paid to employees for uniforms or clothing to be taxed as fringe benefits unless certain conditions are met. These conditions relate to how the items are used by the employee, and whether the City requires substantiating the allowance paid to him or her. The IRS refers to this substantiation requirement as an "Accountable Plan", which requires the employee to verify within a reasonable time the date, time, place, amount, and business purpose of the expense. Verification is generally done through documentary evidence, such as bills, receipts, invoices, cancelled checks, or similar items.

Based on IRS guidelines in the Taxable Fringe Benefits Guide, a clothing allowance or payment is not considered taxable if wearing the item is a condition of employment, it is not worn for general use, it is not adaptable to general use, and the City requires the employee to substantiate the allowance under an "Accountable Plan".

IV.

Procedures. Each Department, as defined herein that provides or pays for a uniform or clothing for employees may choose to:

A.

Annual Allowance —Grant an annual allowance (one-time payment) for the purchase, wear, and/or maintenance of the uniform or clothing. Said allowance will be paid for in a lump sum equivalent to the respective contractually obligated monetary denomination on the second pay period of the new Fiscal Year (paid through payroll subject to tax withholding and considered taxable). Employees desiring this allowance shall submit a written request to the Accounting Administrator at least two (2) weeks prior to the second pay period of the new fiscal year. Said one-time payment shall be made on a separate clothing allowance check and all required payroll deductions shall be made; or

B.

Reimbursement Method —Provide funds to reimburse the employee for the purchase, wear, and maintenance of the uniform or clothing under a method that meets the rules of an IRS Accountable Plan, as defined above (the reimbursement is non-taxable).

Items that do not meet the rules of an IRS Accountable Plan, as defined above, are considered a taxable fringe benefit. Allowances that are includable in the taxable wages of an employee will be reimbursed through payroll as miscellaneous pay and will be subject to applicable tax withholding; or

C.

Direct Pay —The City may purchase uniforms, clothing, and/or equipment directly from the vendor. Items that do not meet the rules of an IRS Accountable Plan, as defined above, are considered a taxable fringe benefit. These allowances shall be included in the taxable income of an employee and will be subject to applicable tax withholding.

Examples:

Uniforms bearing the City's name, applied badges, etc., that are required to be worn while at work and would not be worn or adaptable for use as ordinary clothing are considered clothing that is excludable from the taxable income of the employee. For example, sworn Law Enforcement Uniform; Fire Fighter Uniform; etc.

Clothing that is adaptable to everyday use would be considered taxable income of the employee. For example: Detective's clothing; jeans; t-shirts (non-safety related); work clothes that any citizen would be expected to wear; tennis shoes; boots.

D.

Chart —The following chart describes the situation in the City under this policy, how payment will be made, and the flexibility of payments for clothing allowances:

Payment Method	City Practice	City Tax Treatment
City pays the employee directly for uniforms or clothing.	Pay employee through an annual lump sum payment with no requirement that employee provides documentation substantiating the purchase.	Taxed for federal, state, social security, and Medicare purposes. Taxes are withheld from the employee's check, and reported on the employee's W-2 form.
City reimburses employee for uniform or clothing purchases.	a. Pay employee directly through line item for clothing allowances, after substantiating the purchase as a qualified purchase that is not taxable pursuant to the IRS fringe benefit guide.   b. Pay employee directly through payroll for all clothing and uniform purchases that do not qualify as non-taxable clothing purchases.	a. Not taxed for federal, state, social security, and Medicare purposes, as long as all requirements are met including substantiation.   b. Taxed for federal, state, social security, and Medicare purposes. Taxes withheld from the employee's payroll check, and reported on the employee's W-2 form.
City purchases the clothing directly from the vendor on the behalf of the employee.	a. City pays vendor directly through the line item for clothing allowances, after substantiating the purchase as a qualified purchase that is not taxable pursuant to the IRS fringe benefit guide.   b. City pays vendor directly through the line item for clothing allowances for all clothing and uniform purchases that do not qualify as non-taxable clothing purchases.	a. Not taxed for federal, state, social security, and Medicare purposes, as long as all requirements are met including substantiation.   b. Taxed for federal, state, social security, and Medicare purposes. Taxable fringe benefit captured on the employee's W-2 at the end of the calendar year.

 

V.

Requirements. The following requirements are hereby established:

A.

Uniforms that are purchased by the City must be worn while on duty.

B.

Uniforms shall not be worn in public or non-public places, while not on duty. It is permissible to wear Uniforms while commuting between residence and workstation as well as for small personal detours to and from the workplace. For example, stopping by the store after work or stopping by the ball diamond after work.

C.

The City will furnish uniforms and/or equipment directly to eligible employees in accordance with applicable labor agreements.

D.

Employee clothing allowances or reimbursements will follow the provisions of the relevant labor agreement and/or City Code as appropriate.

E.

The Police Chief, Fire Chief, Director of Public Works, and Operations Manager shall receive a clothing and equipment allowance equal to that of the Union contract governing their department.

F.

Engineering and Building personnel within the Department of Public Works that are required to work in the field on a regular basis shall receive a two hundred-dollar clothing allowance per annum.

G.

The Emergency Management Coordinator shall receive a four hundred-dollar clothing allowance per annum.

VI.

Required/Authorized Clothing by Department.

Department	Required Clothing	Authorized/Approved (Taxable)
Emergency Management		Items deemed appropriate for the performance of the Emergency Management Coordinator within his/her profession.
Engineering	a. High Visibility City of Effingham Shirts	Items deemed appropriate for the performance of the Engineering Department.
Fire Department	a. Long sleeve navy blue dress shirts b. Long sleeve white dress shirts c. Short sleeve navy blue dress shirts d. Short sleeve white dress shirts e. Navy blue Polos (must display department logo) f. Navy blue T-shirts (must display department logo) g. Navy blue cotton-blend pants h. Belt i. Tie j. Dress hat k. Year-round jacket l. Work shoes or boots (Taxable) m. Collar Insignias n. Name Plate o. Dress Hat	a. Duty pullover sweatshirt (collared, must display department logo) (Non-Taxable) b. Work out shorts, sweatpants, shoes, gloves which must display the department logo. c. Baseball-style cap, stocking cap, ear band (with department logo) d. Dress uniforms (Non-Taxable) e. Dress Overcoat (Non-Taxable) f. Socks g. Shoes or boots h. Microphone recoil device (Non-Taxable) i. Fire helmet (one-time purchase) (Non-Taxable) j. Other relevant items deemed appropriate for the performance of a Fire Fighter within his/her profession.
Police Department	a. 3 Navy uniform pants b. 3 Navy uniform shirt-long sleeve c. 3 Navy uniform shirt-short sleeve d. Soft Shell jacket e. Holster f. Glock 21 g. First Aid Kit h. CPR mask i. Inner belt j. Outer belt k. Belt keepers l. Magazine pouch m. Handcuff case n. Handcuffs o. Glove holder p. Flashlight q. 3 Undershirts (Taxable) r. Badges s. Name plate t. Name bar holder u. Rank insignia v. E.P.D. insignia w. Break out bag x. Tie y. Taser z. Taser holster aa. Seat organizer bb. Vest cc. Flashlight holder/ring dd. ASP Baton ee. Baton holder ff. Handcuff key gg. Pepper spray hh. Pepper spray holder ii. Reversible raincoat jj. Key holder kk. Radio holder	Other relevant items deemed appropriate by the Chief of Police for the performance of a Law Enforcement Officer within his/her profession.
	ll. Radio mm. Hat straps nn. Hat cord with acorns oo. Hat trap pp. High gloss Oxford shoes (Taxable) qq. Boots (Taxable) rr. Felt hat ss. Straw hat tt. Rain protector for hat uu. Gloves vv. Badge belt clip holder ww. Wallet (badge cut out) xx. Citation holder yy. Warning holder zz. Traffic vest
Public Works	a. High Visibility City of Effingham Shirts	a. Work shirts, T-shirts, sweat shirts b. Work pants, jeans c. Work shoes/boots d. Work rubber boots e. Insulated underwear f. Coveralls g. Work jacket/coat h. Rain gear i. Work gloves j. Work hats, caps, hoods k. Multi-tool l. Safety Glasses m. Prescription/sun safety glasses n. Hand tools o. Heavy-duty insulated socks p. Belts for work pants/jeans

 

(Ord. No. 42-2017 , § II(Exh. B), 7-5-2017)

Editor's note

Ord. No. 42-2017 , § II(Exh. B), adopted July 5, 2017, repealed the former § 2-411 and enacted a new section as set out herein. The former § 2-411 pertained to similar subject matter and derived from Ord. No. 72-2011, § I(Exh. A), adopted Dec. 20, 2011.