On August 26, 2018, Illinois amended the Wage Payment and Collection Act (IWPCA) to become the 9th jurisdiction to require employers to reimburse employees for all expenses within the scope of their employment that are "directly related to services performed for [their] employer[s]." The new Illinois law is effective January 1, 2019.
The other 8 jurisdictions are: California, the District of Columbia, Iowa, Massachusetts, Montana, New Hampshire, North Dakota, and South Dakota.
What do these reimbursement laws mean for employers? If an employee is required to purchase or utilize their own cell phone, laptop, desktop, tablet, landline, data plan, internet service, etc., employers must determine when and if the use of such personal devices, plans, lines, and equipment constitutes a reimbursable business expense under the law.
Court decisions from California (interpreting language very similar to the new Illinois law) have consistently ruled that employers must reimburse employees for a pro-rated portion of their cell phone data plans, internet service, landline plans, and the like-even if the employee would have incurred these expenses regardless of employment with the employer.
In addition to evaluating what expenses are reimbursable and how much must be reimbursed, employers in Illinois must establish a written expense reimbursement policy specifying the amounts and requirements for any such reimbursements.
Employers should review their expense reimbursement policies for compliance with applicable state laws.
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