Starting in 2019, Illinois will join California, New York, Washington D.C. Montana, Massachusetts, Iowa and Pennsylvania in enacting legal provisions requiring employers to reimburse business-related expenses. The change results from an amendment to the Illinois Wage Payment and Collection Act, under which employers will be responsible for paying back all “necessary expenditures … incurred by the employee within the employee’s scope of employment and directly related to services performed by the employer.”

Such requirements mirror those enacted in California, in that both mandate that employers pay “necessary expenses” incurred in direct relation to business services rendered by employees, and both give employers the option of enacting company-specific protocols and policies regarding reimbursement. However, California Labor Code Section 2802 restricts the amount of control employers have over terms of reimbursement in certain critical respects. For instance, California rulings have held that that work-related expenses must be repaid to employees regardless of whether an expense report is submitted; in fact, California employers are on the hook for reimbursement of “necessary expenses” even if employees don’t make a request, or are unaware that certain expenses are reimbursable.

A few common reimbursable costs in California include travel expenses incurred during the use of personal or company vehicles, uniforms with a company logo deemed unsuitable for wearing as everyday clothing, costs associated with company-mandated uniform care and maintenance, the cost of job-related tools and equipment that companies require employees to own, and cash-register shortages as a result of customer misconduct. Generally, companies must pay back the cost of any products that they require their employees to purchase. Even personal cell phone bills can fall into the category of reimbursable expenses if phones are used for business purposes, according to the decision rendered in Cochran v. Schwan’s Home Serv., Inc., a 2014 California Court of Appeal case.

Like California’s law, the Illinois amendment mandates reimbursement for “authorized” or “required” expenses (though the exact meaning of those terms in their Illinois context remains nebulous). In most cases, however, employers in California and other states with reimbursement statutes and regulations allow employers to apply common-sense judgement in drawing the line between “necessary” and superfluous expenses; for example, an employee would be hard pressed to convince a court that they are anything other than personally responsible for their independent decision to pass up less expensive lodgings for a five-star hotel, even if they did happen to be on a business trip.  Even so, employers are always advised to consult with legal experts when laying out such policies, as doing so will avoid any guesswork involved in protecting against extraneous reimbursements.