WELL-DRAFTED EXPENSE REIMBURSEMENT POLICY NECESSARY TO STOP ABUSES BY EMPLOYEES
Beginning on January 1, 2019, all Illinois employers are required to reimburse employees for all expenses incurred that are “directly related to the services performed for the employer.” Reimbursable expenses are considered those for which employers have authorized the employees’ expenditure, and do not include expenses incurred due to an employee’s own negligence, normal wear and tear, or theft (unless the result of the employer’s own negligence). Employers may require employees to submit any expenditure with supporting documentation within 30 calendar days in order for the employee to receive reimbursement.
Having a detailed written expense reimbursement policy is the best way to ensure compliance with the new statute and to make sure that an employee cannot abuse the policy by seeking reimbursement for expenses that were not properly approved.
Eight (8) other jurisdictions including California, the District of Columbia, Iowa, Massachusetts, Montana, New Hampshire, North Dakota, and South Dakota have previously enacted similar legislation. While the Illinois Act does not specify exactly what types of expenditures an employer must reimburse, looking at the other jurisdictions for guidance, Illinois employers may be required to reimburse employees for mileage, personal cell phone data plans, home internet bills, and remote equipment (such as routers and other computing necessities). GCT will be closely monitoring any developments.
We recommend that Illinois employers review their expense reimbursement policies and practices as soon as possible.
If you have questions or need additional information, please contact an employment attorney at Golan Christie Taglia, LLP.