As the end of the year approaches, employers should consider dusting off their employee handbooks and taking a close look at their policy on reimbursement of employee's expenses. Effective Jan. 1, 2019, amendments to the Illinois Wage Payment and Collection Act take effect, requiring employers to reimburse employees for “all necessary expenses that are incurred by the employee within the employee’s scope of employment and that are directly related to services performed for the employer.”
With the breadth of this language, employers should consider all types of potential business-related expenses, such as:
- Work-related mileage for employees who drive within the scope of their employment, excluding regular commuting;
- Use of personal cell phones for work-related purposes;
- Home internet or other office expenses for employees who work from home (even occasionally); and
- Costs associated with required work-related travel, training or conferences.
However, pursuant to the upcoming changes in the law, employees are not entitled to reimbursement if the employer has established a written expense reimbursement policy and the employee fails to comply with the policy.
Consequently, it is imperative for employers seeking to limit exposure, and incurring unknown costs, to implement a comprehensive reimbursement policy covering typical expenses that an employee may incur within the scope of employment.
An appropriate expense reimbursement policy can also be a particularly useful tool in limiting exposure for expenses alleged to be owed to independent contractors contending they are employees.
Taft’s Employment group would be happy to review your existing expense reimbursement policy, assist you in preparing a new policy or reviewing the entirety of your employee handbook to provide guidance on compliance and best practices.