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Illinois enacts new law regarding employee expenses

Expense reimbursement check for employee expenses

The Illinois Legislature recently amended the Illinois Wage Payment and Collection Act, requiring Illinois employers to reimburse employees for many employment-related expenses. Read on to learn about the new law requiring employers to reimburse employee expenses.

The new law, which is effective on January 1, 2019, requires an employer to reimburse an employee for “all necessary expenditures or losses incurred by the employee within the employee’s scope of employment and directly related to services performed for the employer.” This includes “necessary expenditures” by an employee that inure to the primary benefit of an employer.

The Follow Expenses are not Subject to Reimbursement:

  • Losses due to employee’s own negligence,
  • Losses due to normal wear,
  • Losses due to theft unless the theft was attributable to the employer’s own negligence,
  • The employee (or employer) failed to comply with the employer’s written expense reimbursement policy or acted outside the specifications or guidelines of the reimbursement policy, or
  • The employee was not authorized or required by the employer to incur the expenses, or

New Illinois Law – Reimburse Employee Expenses

The new law requires an employee requesting reimbursement to submit “appropriate supporting documentation” within 30 calendar days after incurring the expense. An employer may provide additional time to provide documentation if it is part of the employer’s written reimbursement policy. An employee may, however, submit a signed statement in lieu of documentation in the event such documentation is nonexistent, missing, or lost.

The law encourages Illinois employers to establish and adopt a comprehensive written policy that clearly and unambiguously delineates authorized or required expenses and the compensable amount thereof. The policy should address a variety of common categories of expenses, such as conferences, mileage (excluding the commute to and from work), and personal cellphones, computers, tablets, or other home office equipment (if for regular work use). The policy should also contemplate other areas that are unique to an employer’s business that fall outside the common categories. Therefore, Illinois employers are strongly encouraged to implement a written policy if none currently exists or to review their existing policies to ensure compliance with the new law.

If you have questions about the Illinois Wage Payment and Collection Act, or other areas of employment law, please contact our office.

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