Illinois recently passed a law that will soon require businesses to reimburse their employees for any business-related expenses paid for out of pocket. As of now, only seven other states (California, New Hampshire, North Dakota, South Dakota, Montana, Massachusetts and Iowa) and the District of Columbia have similar laws in place. The law is an amendment to the Illinois Wage Payment and Collection Act (IWPCA) and goes into effect January 1, 2019.

Amendment Closes Loophole in Act

Prior to this amendment, there was nothing in the IWPCA that specified expense reimbursement. Because of this, some employers would not reimburse workers since it was not covered under the act, and employees would then sue the employer for violation of contract. The employee would often end up incurring more expenses like attorneys fees, which would not be reimbursed.

Employers Must Reimburse “Necessary Expenditures”

The new law states employers are required to reimburse “necessary expenditures or losses” which the employee incurs during any business activity directly related to the work they do for the employer. The law states necessary expenditures are all reasonable expenses the employee racks up while performing the duties of his or her job. It also states employers are not responsible for losses that are the employee’s own fault, due to normal wear or theft, unless the theft occurred because of employer negligence.

Employees Must Comply With Employer Policies

Even though the new law states employers must reimburse their workers, employees must comply with any written reimbursement policies the employer has in place. The law specifically states employees are not entitled to reimbursement if there are official policies the employee did not follow. The law also says employers are not liable unless they authorized the expenditure the employee seeks reimbursement for, or if they violate their own reimbursement policy.

Contact a Schaumburg, IL Employment Law Attorney

This new law can have a significant impact on company expenditures. If you have employees who use their own vehicle, computer, cell phone or other equipment, an Illinois employment law lawyer can examine your company policies and help protect you against employee expenditure lawsuits. At the Miller Law Firm, P.C., we can determine if your existing employee reimbursement policies are sufficient, and if they are not, assist in drafting new procedures in accordance with the new law. Contact our office at 847-995-1205 to schedule a free consultation.

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It can be easy to misclassify a worker, especially when it comes to small businesses. There are a few different classifications that employees can fall under, such as employee or independent contractor, salaried or hourly and overtime exempt or non-exempt. Assigning the wrong status to a worker can bring costly consequences like liability for employment taxes, required payment of back wages, and other penalties. In order to avoid such trouble that will bring nothing but headaches, you should know exactly what constitutes certain designations and how to determine how you should classify a worker.

Independent Contractor vs. Employee

The first determination you should make is whether or not you technically have an independent contractor or an employee. The Internal Revenue Service (IRS) has developed a set of criteria to help employers make this designation. The IRS states that there are three areas where you should look to figure out if your worker is an employee or an independent contractor.

Behavior

Typically, workers are considered to be employees if the employer has the right to control and direct the work performed by the worker. Your worker may be an employee if:

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Health Insurance Coverage

Employers pay hefty costs to offer health insurance, but is it necessary? Deductibles and premiums are higher than workers’ compensation insurance, but health insurance does cover a wide variety of injuries and illnesses, including those that did not occur at work.

Health insurance benefits are not required but can be an added perk to your employees. If you have a small business of fewer than ten employees, discuss the options with your employees. Some people would instead choose their own insurance rather than have the “cookie cutter” plan offered by group benefits, and they may be able to find a better price than is being provided by the group policy.

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July 24, 2018 marked the ninth anniversary since the last time the federal minimum wage rate was increased, to $7.25 per hour. Federal laws explain that no state may set minimum wages at less than this amount, but they are welcome to offer more, which Illinois does. In 2010, Illinois raised the state minimum wage to $8.25 per hour. Although there is strong support for another increase, to date, the amount has remained the same. While it seems like it should be easy to pay an employee for the amount they work, there are many complexities to this process that can result in disputes between employers and employees. Common errors include the miscalculation of overtime pay, wage shortages, and violations of minimum wage requirements.

A Complex Math

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The primary goal for most small business owners is to have a thriving business. Expanding a customer base is a crucial component of growing your business. Many companies accomplish this goal by gathering data about their patrons for future use. For instance, many companies collect email information to provide their customers with notices about upcoming events and sales. This method is useful in creating repeat customers and increases the probability of additional traffic. However, businesses must use caution with their clients’ information to avoid breaking federal laws surrounding data privacy and limit the possibility of commercial litigation.

Online Interaction

The majority of companies today use a website to serve the needs of their clients better. However, these websites often track every move each customer makes, storing this information in a database. Small businesses should be sure to follow the proper procedures to protect this customer data. Creating a valid privacy policy is an excellent way to begin. When creating one for your business, keep the verbiage simple and adhere to your promises. Once your plan is ready, make it visible for all customers to read before proceeding with your website.

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