Illinois: Expanded Expense Reimbursement Requirements
All Employers with IL Employees
April 14, 2023
Contact HR On-Call
The Illinois Department of Labor (IDOL) recently published amended regulations to the Illinois Wage Payment and Collection Act (IWPCA), which expands employer requirements for employee expense reimbursement.
Generally, employees are entitled to reimbursement of “necessary expenditures and losses incurred by the employee within the employee’s scope of employment and directly related to services performed for the employer.” “Necessary expenditures” include any reasonable expenditure required of the employee in the discharge of their employment and expenditures made to the primary benefit of the employer. However, there is a new test for determining the “primary benefit of the employer,” including the following factors: (1) whether the employee has an expectation of reimbursement; (2) whether the expense is required or necessary to perform the employee’s job duties; (3) whether the employer is receiving a value that it would otherwise need to pay for; (4) how long the employer is receiving the benefit; and (5) whether the expense is required of the job.
Additionally, employers must maintain the following expense reimbursement records for three years: all policies regarding reimbursement; all employee requests for reimbursement; documentation showing approval or denial of reimbursement; and documentation showing actual reimbursement and supporting documents.
If an employer denies a claim that should have been reimbursed, the employee may file a claim against the employer with the Department seeking reimbursement for expenses. Any unpaid reimbursable expenses must also be paid in an employee’s final compensation.
Finally, if an employer’s expense reimbursement practices are more generous than what is in their written expense reimbursement policy, whether through direct authorization or practice, the employer is liable for full reimbursement of those expenses.
- Review the regulations here.
- Have expense reimbursement policies updated for compliance.
- Have appropriate personnel trained on expense reimbursement requirements.
- Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2023 ManagEase