Employee Business Expense Reimbursements – 2019

An amendment to the Wage Payment and Collection Act provides that an employer shall reimburse and employee for all necessary expenditures or losses incurred by the employee directly related to services performed for the employer.

Public Act 100-1094 received bi-partisan support as an agreement was reached between proponents for the bill and several opponents, including HBAI.

Added to the bill (SB2999) was language requested by the business lobby stating that the employer is not responsible for 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.

Most importantly, language was also added providing that if there is a written expense reimbursement policy of an employer establishing specifications or guidelines for necessary expenditure, the employer is not liable for the portion of the expenditure amount the exceeds the specifications or guidelines of the policy. However, the policy may not provide for no reimbursement at all.

Employers may not require employees to submit expenses less than 30 days after incurring them, although it may allow employees more than 30 days to submit expenses. The employer must reimburse all “necessary” expenses that are submitted within 30 days after they were incurred.

California and five other states have enacted expense-reimbursement statutes. However, unlike the Illinois law, California law does not enable employers to maintain parameters of expense reimbursements through the implementation of a written reimbursement policy.

HBAI has requested assistance from the NAHB Legal Affairs Staff to produce an expense reimbursement policy template for use by our members. You may wish to consult your attorney on drafting a policy that is best suited for your business.

If you have questions or concerns regarding these matters, feel free to contact me at billward@hbai.org, or at (217) 753-3963.