Illinois expense reimbursement

Complying With New Illinois Employment Laws – Reimbursing Work Expenses

Reimbursement, Wage & Hour

In this new series, we highlight legal changes that Illinois Employers must know now.

With the inauguration of J.B. Pritzker on January 14, 2019, the Illinois legislature is gearing up to advance its workplace agenda. This legislative is likely to bring new employee rights, and new employer obligations, that could be costly to businesses that don’t comply. We’ll keep you updated on newly introduced laws as they’re debated and enacted. First up, we’ll focus on new state and local employment laws enacted at the end of the Rauner administration that address reimbursing work expenses.

What’s New Right Now In Illinois?

Effective January 1, 2019, Illinois employers are required to reimburse employees for necessary expenditures incurred within the employee’s scope of employment and directly related to services performed by the employee.

The law defines “necessary expenditures” as all reasonable expenditures or losses incurred in the course of the employee’s duties, for the primary benefit of the employer.

These expenditures are expected to cover employees that incur expenses who, for instance, use a personal device such as a smart phone or computer for work or to travel between worksites using their own vehicle, among other expenses.

The law also prohibits employers from firing or otherwise retaliating against workers who complain about not receiving legally-mandated reimbursements.

Why Does It Matter To Illinois Employers?

One word: Telecommuters. Even employees who use their personal phones for routine emailing and texting during their daily commute may demand reimbursement under the new law.

The specific limits on what may or may not qualify as a “necessary expenditure” under the new law are yet to be defined by the courts and the Illinois Department of Labor.

Until they do, employers with loose, inconsistent or non-existent expense reimbursement practices are likely to face a wave of class action claims for all types of out-of-pocket employee expenses loosely connected to work, and for retaliation against those who raise complaints about unreimbursed expenses before they’re fired.

What Should You Do Now?

Review Your Expense Reimbursement Policies.

Employers that anticipate employee claims for expense reimbursements should draft or revise reimbursement policies to ensure they can enforce their rules on reimbursement claims. An expense reimbursement policy must provide more than a minor or trivial reimbursement to be enforceable.

The policy must also be enforced. Requiring employees to actually comply with the policy is necessary to shield an employer from claims for excessive or unauthorized reimbursement requests. It must also meet other criteria defined by law to create a proper defense against claims.

Gary Savine is an Illinois employment lawyer and founder of Savine Employment Law, Ltd. Gary provides a wide range of legal services to employers.

Gary Savine is the Co-Founder of Savine Employment Law, Ltd. in Chicago. We help Illinois employers clear away compliance confusion and conflict and manage their workplace profitably.

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