Jan 10, 2019

New Wage Act amendment requires Illinois employers to reimburse expenses

On January 1, 2019, Illinois joined a number of other states in adding expense reimbursements as a statutory requirement for employers under the Illinois Wage Payment and Collection Act (Wage Act). Under the new provision of the Wage Act, Illinois employers must reimburse employees for all “necessary expenditures” that incurred within the scope of employment. The amendment defines “necessary expenditures” as “all reasonable expenditures … required of the employee in the discharge of employment duties and that inure to the primary benefit of the employer.” 1

An employee will not be entitled to reimbursement of expenses if the employee has failed to comply with an employer’s written expense reimbursement policy. The written expense reimbursement policy may provide for reasonable dollar limits that are more than de minimis to certain expenses and may require supporting documentation to be submitted within a particular timeframe. However, a policy may not require employees to submit expenses less than 30 days after incurring them and may not deny a reimbursement merely because a receipt is not provided.  If an employee loses a receipt or is unable to provide a receipt, the employee may submit a “signed statement” in lieu of a receipt to support the expense.

Thus, if an employer’s written policy requires an expense reimbursement request to be submitted within 30 days after the expense was incurred, and the employee fails to submit the request within this timeframe, the employee will not be entitled to the expense reimbursement and the employer will not be in violation of the Wage Act.

In addition, the amendment to the Wage Act allows for reimbursement of only those expenses “authorized” or “required” by the employer. There is no definition of when an expense is “authorized” or not.   

Given the statutory penalties and potential recovery of attorneys’ fees available under the Wage Act, Illinois employers should carefully review their existing policies or should ensure that they adopt written policies to address the types of expenses that will be reimbursed and any dollar limits on such expenses in compliance with the Wage Act.

Feel free to contact a Chuhak & Tecson Employment Law attorney for employment policy recommendations that adhere to the revisions of the Wage Act.  

This Chuhak & Tecson, P.C. communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.

Client Alert authored by: 
Ryan A. Haas, Principal

This alert originally appeared in the January 2019 Employment Focus newsletter.

1 820 ILCS 115/9.5(a)