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REIMBURSING EMPLOYEE EXPENSES IN ILLINOIS UNDER THE NEW LAW

By Gardi, Haught, Fischer & Bhosale LTD

Does your boss require that you use your personal phone for work purposes? Do you answer calls and email from clients, on your personal phone at night and on weekends? If so, who pays the bills? Well, an amendment to the Illinois Wage Payment Collection Act (“IWPCA”) took effect January 1, 2019 addresses reimbursing employee expenses in Illinois. It states that employers must “reimburse their employees for all necessary expenditures and losses incurred within the scope of employment.”

But that doesn’t mean that you should forward your next phone bill to your boss! To qualify for reimbursing employee expenses in Illinois, your employer must either authorize or require the expense. Once authorized, the employee must make sure to request reimbursement within 30 days of incurring the expense, along with a copy of the actual bill from your carrier. If you don’t follow the proper procedure for reimbursement, as well as your employer’s reimbursement policy (if they have one) you may not be entitled to the compensation.

However, exactly what’s included and what’s not included under this definition is not entirely clear. While employers would certainly want a narrow definition, the employee can take the position that if an expense is incurred during the discharge of the employee’s duties to the benefit of the employer, that expense is reimbursable.

The law applies only to part and full-time employees, not 1099 contractors. Also, it applies to all registered companies in Illinois, regardless of size.

Also, while a cell phone is an easily understandable example of how this new law might affect both employers and employees, the law is not limited to phones. It applies to all necessary expenditures and losses incurred within the scope of employment.

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Can your employer deny a request for reimbursing employee expenses? Yes, under certain circumstances. If the expenditure or loss incurred is caused by employee negligence, normal wear and tear and/or theft, the employer is within his rights to deny. Employers are also not required to reimburse unauthorized expenses, requests that fail to comply with the employer’s written reimbursement policies (although by law employees must be allowed not less than 30 days to submit requests), and/or costs exceeding employer-established expense caps.

Tips for Employers on Reimbursing Employee Expenses in Illinois 

If you are an employer and want to control your reimbursements, putting a written statement in place is advisable. Here are some tips on what to include:

–Be clear with your employees on what is and what is NOT reimbursable.

–If the amount to be reimbursed is not evident (such as cell phone calls when the employee has unlimited minutes) consider reimbursing a fair percentage of the cost every month. Be clear about how this will be determined before the first expense is reimbursed.

–Be clear about the procedure for submitting reimbursement requests and what would cause them to be delayed or denied

–Be clear about the method of distribution and time period in which employees can expect to see reimbursement

–Be clear about the expense cap on any type of reimbursement

The attorneys at Gardi, Haught, Fischer & Bhosale LTD are experienced in all forms of corporate law and can review or address any questions you may have on reimbursing employee expenses and   your employee reimbursement policies. If we can help, request a free case evaluation by clicking on the button below.

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