By: Brad McCann
The Illinois Wage Payment and Collection Act (“Act”) was recently amended to take effect on January 1, 2019 and continue for years thereafter. 820 ILCS 260/10.
The amendment to the Act requires 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.”
Employers may draft written reimbursement policies and require employees to comply with the policies prior to being reimbursed. Even with the requirements provided under the amendment, Illinois employers are not obligated to reimburse expenses if there is a written policy and the employee fails to comply with that policy.
One of the main objectives of the amendment is related to compensating employees who use personal cell phones for work purposes and employers’ failure to reimburse employees for the work-related costs incurred for such personal devices, home internet access and related equipment.
The amendment also provides for a damage remedy equal to two percent (2%) of the underpayment per month of the non-payment, which would be in addition to the reimbursement amount.
The amendment does set up to provide Illinois employers the ability to set clear guidelines for expense reimbursement. Employees are not entitled to reimbursement for work-related expenditures if the employer has a policy and the employee fails to comply with the written policy, so setting out a clear procedure for such reimbursement is a necessity for employers. In addition, employers are still not responsible for expense reimbursement unless the employer authorized or required the employee to incur the necessary work-related expenditure, which may be clearly stated in the written policy.
Based on this new amendment, Illinois employers should adopt written expense reimbursement policies, or review existing policies to be sure that there are clear procedures and guidelines for employees to be reimbursed.