Questions about expense reimbursement obligations? Contact us at B&D for guidance.

Beginning January 1, 2019, the Illinois Wage Payment and Collection Act requires employers in Illinois to reimburse employees for work-related expenses. For an expense to be eligible for reimbursement, an employer must authorize or require an employee to incur those expenses. This includes all necessary expenditures or losses incurred by an employee within his or her scope of employment and directly related to services performed for an employer. Although an employer is not responsible for losses due to employee’s own negligence, losses due to normal wear, or losses due to theft, unless the theft was the result of an employer’s negligence.

An employee must submit any expenditure with appropriate documentation within thirty days of incurring the expense. Note that this documentation does not necessarily mean a receipt, if an employee has lost or otherwise cannot produce a receipt or other document, an employer must accept the employee’s own signed statement.

With this amendment, an employee will have up to ten years to sue for reimbursement of work-related expenses after the expenses is incurred. The law further requires employers to cover an employee’s attorneys’ fees if a violation of the statute is found.  While there is no relevant case law in Illinois, yet. California has a nearly identical law, and under the California statute, courts have ordered reimbursement for expenses such as data plans, Internet bills, and other computing expenses regardless of the marginal cost to employees.

Employers can protect themselves by developing reasonable reimbursement policies so long as an employer does not institute a policy that provides for no reimbursement or de minimis reimbursement. A reasonable policy should address the types of expenses which can be reimbursed, any caps, and the process for reimbursement. Employers should review and possibly update their current reimbursement policies to account for change in law.