Effective January 1, 2019, the Illinois Wage Payment and Collection Act (IWPCA), 820 ILCS 115/1 et seq., requires employers to reimburse employees for all “necessary expenditures” or losses that an employee incurs in the scope of their employment. Prior to the amendment, Illinois law generally did not require employers to reimburse employees for business expenses. Illinois is now the ninth state to impose such a reimbursement requirement on employers—joining states such as California, Iowa, and New Hampshire which have similar laws.
The IWPCA 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.” In addition to the necessary expenditure requirement, for an expense to be reimbursable: (1) the employer must have “authorized or required” the expense; and (2) the employee must request reimbursement of the expense incurred along with all appropriate documentation validating the expense within 30 days of incurring the expense—unless the employer’s reimbursement policy provides for a longer period. The law specifically excludes the following types of losses from those that an employer is obligated to reimburse: (1) losses due to an employee’s own negligence; (2) losses due to normal wear; and (3) losses due to theft unless the theft was a result of the employer’s negligence. Continue reading