UNREIMBURSED EMPLOYEE EXPENSES CODE

The new Illinois law mirrors key language in California Labor Code Section 2802, California's expense reimbursement law. Similarity to California's Employee Expense Reimbursement Law The employer (i) failed to comply with its own expense reimbursement policy (ii) authorized or required the employee to incur the necessary expenditure or, (iii) if the employer has no such policy, the employer failed to reimburse the necessary expenditure or loss.Within 30 calendar days after incurring the necessary expenditure or loss (unless more time is permitted under the employer's written policy), the employee submitted appropriate supporting documentation for the necessary expenditure or loss, or submitted a signed statement regarding any such receipts if documentation is nonexistent, missing, or lost and.The necessary expenditure or loss incurred was (i) within the employee's scope of employment and (ii) directly related to services performed for the employer.The necessary expenditure or loss inures to the primary benefit of the employer.

The necessary expenditure or loss was required of the employee in the discharge of his/her employment duties.The employee incurred a necessary expenditure or loss.The Illinois law provides that employees are not entitled to reimbursement if '(i) the employer has an established written expense reimbursement policy and (ii) the employee failed to comply with the written expense reimbursement policy.' Moreover, 'if the written expense reimbursement policy … establishes specifications or guidelines for necessary expenditures, the employer is not liable … for the portion of the expenditure amount that exceeds the specifications or guidelines of the policy so long as the employer does not institute a policy that provides for no reimbursement or de minimis reimbursement.'īased upon the statutory language, we anticipate plaintiffs will need to satisfy the following requirements to prove a violation of the law: Though a number of other jurisdictions require employers to reimburse employee expenses (e.g., California, Washington D.C., Iowa, Massachusetts, Montana, New Hampshire, North Dakota, and South Dakota), the new Illinois expense reimbursement law is unique in its treatment of employers' expense reimbursement policies. The new Illinois expense reimbursement law, an amendment to the IWPCA (820 ILCS 115/9.5), provides that employers 'shall reimburse an employee for all necessary expenditures or losses incurred by the employee within the employee's scope of employment and directly related to services performed for the employer.' As defined by the amended statute, the phrase 'necessary expenditures' covers '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.' The new law specifically excludes 'losses due to an employee's own negligence, losses due to normal wear, or losses due to theft unless the theft was a result of the employer's negligence' from the scope of reimbursement. Reimbursement of Employee Expenses in Illinois The new law also provides that such reimbursement shall be subject to the requirements of the employer's expense reimbursement policy as long as the policy complies with the law. The IWPCA was amended, effective January 1, 2019, to require Illinois employers to reimburse their employees for all 'necessary expenditures or losses' incurred in the employees' 'scope of employment,' subject to limited exceptions. Looking Ahead: We recommend that all employers have an expense reimbursement policy in place that aligns with the amended law as soon as possible. The Results: The amendment to the IWPCA provides that employers must reimburse their employees for all necessary expenditures and losses they incur within the scope of their employment, subject to the terms of the employer's expense reimbursement policy. The Situation: An amendment to the Illinois Wage Payment and Collection Act ('IWPCA') was signed into law by Illinois Governor Bruce Rauner and took effect on January 1, 2019.

Unreimbursed employee expenses