New Illinois Law Requires Employers to Reimburse Employee Expenses

New Illinois Law Requires Employers to Reimburse Employee Expenses

Illinois employers should prepare for California-style expense reimbursement class claims when a new law takes effect next year, which potentially includes demands to reimburse personal cell phones and home internet use.

The Illinois Wage Payment and Collection Act was recently amended to require 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.” That language is nearly identical to California’s expense reimbursement statute. In California, plaintiff’s lawyers have gained traction on arguments that the law applies to remote worker expenses, such as:

  • personal cell phone data plans when supervisors call those phones with work-related inquiries
  • home internet bills when employees are required to get online to handle work issues, including checking work schedules and delivery routes
  • remote equipment, like routers and other computing necessities

Plaintiffs have argued these requirements apply regardless the marginal cost to the employee – in other words, even if the employee would have purchased the exact same data plan with or without her job requirements, reimbursement may be necessary.

Thankfully, and unlike California, Illinois employers are not obligated to reimburse expenses if there is written policy and the employee failed to comply with that policy. Thus, Illinois employers should review their expense reimbursement policies and practices this fall (or create those policies and practices, if necessary) before the law takes effect in January 2019.

To speak with Joel O’Malley about the amended Illinois Wage Payment and Collection Act, contact him at jomalley@nilanjohnson.com or 612.305.7747.

Associated Practice Areas

Associated Professionals