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Can Employer Withhold Expense Reimbursement until certain Paperwork is done? Wisconsin

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  • Can Employer Withhold Expense Reimbursement until certain Paperwork is done? Wisconsin

    I frequently travel out of state for my job. I am provided a credit card, but there are still some expenses that I pay for in cash, that I am out of pocket. When I return from my trip I am required to write a report on the visit. Sometimes I get many weeks behind. Can my employer withhold my expense reimbursement until my paperwork (report) is done?

  • #2
    Not only "can" they withhold the payment until you get the supporting paperwork together, but technically they legally "should". There is an IRS requirement called the "accountable plan" rules associated with expense reimbursement. Absent all of the accountable plan rules being complied with, technically any payments being made to you would be fully taxable wage payments, which are a major pain for all concerned. If you have failed to adequately support the payments under the accountable plan rules, then under IRS rules, any expense reimbursements are taxable wages. It is much easier to just get the paperwork submitted prior to making the payment so that the expense reimursements can be correctly classified ahead of time.

    Worse, there are only two states (CA, MA) which have any labor law requirements that expense reimbursements ever be made. It is perfectly legal under the labor laws in your state for your employer to wait years, decades, centuries for you to submit your paperwork prior to reimbursing expenses. It is also perfectly legal for your employer to fire you for failing to submit your paper work in a timely manner. I have worked for employers who would do exactly that.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)


    • #3
      What's more, in MA (I can't speak for CA) EVEN IF reimbursement was due under the law (it is only required in limited circumstances) nothing in MA law either would prohibit the employer from requiring that you complete the paperwork before they release the check.

      So if you want the check, write the report.
      The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.


      • #4
        I travel a great deal. I am, in fact, typing this from a hotel room.

        Every single company I have ever worked for requires the documentation and receipts to be received and verified by the company prior to payment.

        Every single one. Even in places like California, the company does not have to pay your expenses until you submit them.
        Not everything that makes you mad, sad or uncomfortable is legally actionable.

        I am not now nor ever was an attorney.

        Any statements I make are based purely upon my personal experiences and research which may or may not be accurate in a court of law.