44 SEPTEMBER / OCTOBER 2021 HUMAN RESOURCES Debra A. Mastrian Partner SmithAmundsen LLC dmastrian@salawus.com SmithAmundsen LLC is a Diamond Associate Member of the Indiana Bankers Association. Remote Work and Travel Expenses Are employers required to reimburse employees? Questions regarding remote work arrangements continue to be at the forefront. One frequently asked question is whether employers must reimburse remote employees for out of-pocket expenses, including travel expenses, incurred by employees in connection with their jobs. Under federal law, in general, absent a policy or an agreement with an employee that states otherwise, an employer is not required to reimburse direct expenses, except when the payment of the unreimbursed expenses would take the employee below minimum wage. If an employer has a remote employee who is making close to minimum wage, then the employer should closely monitor the situation and promptly reimburse the employee if the employee’s pay falls below minimum wage. There are some states, such as California and Illinois, that require reimbursement of certain business expenses. Under Illinois’ statute 820 ILCS 115/9.5, an employer must reimburse an employee for “all necessary expenditure or losses incurred by the employee within the employee’s scope of employment and directly related to services performed for the employer.” Necessary expenses are defined as “all reasonable expenditures or losses required of the employee in the discharge of employment duties and that inure to the primary benefit of the employer.” For example, if an employer requires a remote worker to travel (e.g., attend in-person training or a business meeting), the employer must reimburse the employee for travel expenses incurred. Necessary expenses would also include reimbursing a remote employee for a reasonable portion of the employee’s internet and cell phone bills, even if the employee had an unlimited data plan and home internet for personal use. To comply with those laws, some employers will set a fixed monthly amount to cover estimated reimbursable expenses, including a portion of the employee’s personal cell phone and home internet bill, as well as expenses for miscellaneous office supplies (e.g., pens, paper, printer ink, etc.), if those are not provided by the employer. The amount must be reasonable and should include a reimbursement process by which the employee can submit additional expenses that were incurred in excess of the fixed monthly amount. In cases where the expenses may vary from month to month, an employer may have the employee sign a statement (or include the statement in a remote work agreement) that the agreed-upon amount accurately represents the estimated expenses, and that the employee must inform the employer and submit a written request for prior approval if the employee believes that expenditures in excess of that amount are necessary. Under Illinois’ statute, an employee is not entitled to reimbursement if the employer has a written reimbursement policy and the employee fails to comply with that policy, or if the employer did not authorize or require the employee to incur the expenses. Thus, an employer should have reimbursement guidelines setting
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