Reimbursement of Employee Expenses

Effective January 1, 2019, the Illinois Wage Payment and Collections Act requires that an employer shall reimburse an employee for all necessary expenditures or losses incurred by the employee, provided that said expenditures are within the employee's scope of employment and directly relate to services performed by the employer. Below are three basic principles regarding the Illinois Wage Payment and Collection Act amendment, and although collective bargaining rules apply to many changes employers may consider, the facts of each required expenditure may change the outcome of any discussion considerably for an employer.

 

First, the Act states that an employer shall reimburse all "necessary expenditures" incurred by the employee. The Act defines "necessary expenditures" as "all reasonable expenditures or losses required of the employee in the discharge of employment duties and that inure to the primary benefit of the employer." In other words, the requested reimbursement must be: 1) reasonable, 2) within the employee's scope of employment, and 3) for the primary benefit of the employer. An employer is not responsible for losses caused by the employee's own negligence, losses due to normal wear, or losses due to theft unless the theft was caused by the employer's negligence.

 

Second, the employee must submit any necessary expenditure with appropriate documentation within thirty (30) calendar days of incurring the expense. If there is no supporting documentation or the documentation has been lost, the employee must submit a signed statement regarding the receipts.

 

Third, an employee is not entitled to reimbursement under the amendment if the employer has an established written expense reimbursement policy and the employee failed to comply with the written expense reimbursement policy. If the established expense reimbursement policy contains guidelines for expenditures, the employer is not required to cover any expenditure that exceeds the guidelines of the policy provided that the policy provides for more than a "de minimis" reimbursement.