New Illinois Expense Reimbursement Obligations

Joining employers in California and a growing number of other states, Illinois employers must now reimburse their employees for all expenditures or losses incurred within the scope of their employment which were authorized or required by their employer. A failure in compliance could result in severe penalties and the payment of employees’ attorneys’ fees.

Effective January 1, 2019, Illinois employers must reimburse employees for “all necessary expenditures or losses incurred by the employee within the employee’s scope of employment and directly related to services performed for the employer.” “Necessary expenditures” means all reasonable expenditures or losses required of the employee in the discharge of employment duties that inure to the primary benefit of the employer.

Reimbursement is not required for expenses or losses that arise from the employee’s own negligence; losses attributable to normal wear or due to theft (unless the theft occurred as a result of the employer’s negligence); expenses not authorized or required by the employer; or expenses not submitted in compliance with the employer’s written expense reimbursement policy, unless the employer also fails to follow its policy.

Employees must submit “appropriate” supporting documentation for any necessary expenditure within 30 calendar days after incurring the expense, unless the employer’s written policy provides for more time. However, even if supporting documentation does not exist, is missing, or is lost, an employee may submit “a signed statement regarding any such receipts.” As always, the law has some holes that will likely be filled in by the courts or Illinois Department of Labor (IDOL). For instance, it does not specify what a “statement” regarding a receipt must contain, whether an employer without a written policy must reimburse for a request after 30 days, and whether an employer can impose a shorter period for submitting documentation.

The amendment to the Illinois Wage Payment and Collection Act (IWPCA) puts Illinois on par with California and a few other states, being among the most employee-friendly in the nation. Employees may now file claims before the IDOL or bring suit in court to recover un-reimbursed expenses as wages recoverable under the IWPCA. Successful litigants could also recover liquidated damages and attorney’s fees.

Employers should consider that the courts or IDOL may now require reimbursement for expenses such as personal cell phone data plans, internet service, remote computers, and equipment, even if they impose no additional or only marginal costs to the employees.

Employers in Illinois may establish written expense reimbursement policies that set guidelines for the types of expenses and dollar amounts that will be reimbursed, and the employer may deny reimbursement if the employee fails to comply with the employer’s written policy. A policy may not, however, provide for no reimbursement or a de minimus reimbursement.

All employers with employees located in Illinois should establish or revise expense reimbursement policies and practices to make sure they: (1) are in compliance with the new law; and (2) set forth in a clear manner the type of expenses that are authorized for reimbursement, the amounts that are authorized for reimbursement, and any requirements to receive reimbursement, including required supporting documentation and the time by which employees should submit those required supporting documents.

New Poster/Notice Requirement and Right to Sue Requests

Illinois employers must include in an employee handbook information concerning an employee’s rights under the IHRA, including the right to be free from unlawful discrimination and sexual harassment and the right to certain reasonable accommodations. The notice, which must also be displayed in the workplace where employees can readily see it, can be found here.

A person who files a charge under the IHRA may now opt-out of the IDHR’s administrative investigation process and sue directly to Illinois state court. To exercise this provision, the employee must send notice of his or her intent to opt out of the IDHR investigation within 60 days of receiving notice from the IDHR of the employee’s right to opt-out. The IDHR is obligated to send notice of the employee’s right to opt-out within 10 days of the date the charge was filed. Once the employee’s request is granted, the employee has 90 days to file suit in state court.

Equal Pay for African-American Employees

The Illinois legislature amended the Illinois Equal Pay Act of 2003 (IEPA) to outlaw pay differentials between African-Americans and non-African-Americans. The Amendment prohibits employers from paying African-Americans less than non-African-Americans who are performing “the same or substantially similar work on a job that requires equal skill, effort, and responsibility and is performed under similar working conditions.” Previously, the IEPA, like its federal counterpart, the Equal Pay Act, prohibited wage distinctions between men and women. As in the Equal Pay Act, the IEPA provides for circumstances where pay differentials can be permissible.

Nursing Mothers

Illinois employers must provide reasonable paid break time for nursing for up to one year after the birth of the child. These breaks may run concurrently with break time that was already provided to the employee. Under earlier statutes, employers were only required to provide nursing breaks to nursing mothers if doing so would not “unduly disrupt the employer’s operations.” Now, employers must provide breaks to nursing mothers doing so would create an “undue hardship” for the employer (as defined by the IHRA), a significantly higher standard.

The Illinois Service Member and Reemployment Rights Act

The Illinois Service Member Employment and Reemployment Rights Act (ISERRA) incorporates the provisions of the federal Uniformed Services Employment and Reemployment Rights Act (USERRA). This means service members are entitled to: leaves of absence for military service; the right to reinstatement after military service; and protections against discrimination in employment based on military service.

Under the new law employees on military leave must be granted at least an average performance evaluation rating based on the three years preceding the military leave. Employers must continue to pay service member salaries during annual training service for up to 30 non-consecutive days per calendar year, and when a service member is on active duty, the employer is required to continue contributions to the employee’s group health insurance premium if the employee chooses to continue receiving the benefits while on military leave. Employers must post a notice of employee rights under ISERRA. A copy of the new poster is here.

Expanded Time to File Discrimination Charges

In an effort to expand employee right and to be consistent with federal law, Illinois employees are now permitted 300 days to file a Charge of Discrimination with the Illinois Department of Human Rights (IDHR) for claimed violations of the IHRA. Until now, Illinois employees were given 180 days to file a charge at the IDHR, although they had 300 days to file a charge with the U.S. Equal Employment Opportunity Commission.