Employee Reimbursement Policy

What is an Employee Reimbursement Policy?

An Employee Reimbursement Policy is a document established by the employer that sets forth the rules, practices, and procedures for reimbursing employees for expenses incurred during the course of their work.

In an Employee Reimbursement Policy, the employer informs employees about the types of expenses that can be reimbursed, the documentation required, and the procedure for claiming reimbursement. This may cover various expense categories such as travel, meals, office supplies, training, and professional memberships, amongst others.

Is is mandatory to have an Employee Reimbursement Policy?

In Australia, it is not mandatory to have a written Employee Reimbursement Policy. However, employers need to comply with the Fair Work Act 2009 (Commonwealth) as well as any applicable modern awards or enterprise agreements, which create various obligations for employers regarding reimbursement of employee expenses. Therefore, using a written Employee Reimbursement Policy can help employers to comply with these obligations, can help standardise their handling of expense claims, and can help employees to understand the employer's approach to these matters.

What other employment policies does an employer need?

In addition to an Employee Reimbursement Policy, there are various other employment policies that employers should consider, such as:

• Employee Handbook: which provides an overview of the employer's general rules, standards and expectations of employees.
• Social Media Policy: which outlines the employer's approach to use of social media by employees.
• Drug and Alcohol Policy: which outlines the employer's approach to drug and alcohol issues.
• Workplace Health and Safety Policy: which outlines the employer's approach to health and safety issues at the workplace.
• Discrimination Policy: which explains how bullying, harassment, victimisation and discrimination are treated by the employer.
• Remote Work Policy: which explains how the employer deals with employees that are working remotely.
• Cyber Security Policy: which outlines the employer's protocols, standards, and procedures for employees, contractors, consultants and other workers to follow in relation to cyber security, both during work hours and in their personal time.
• Conflict of Interest Policy: which is used by employers to help employees avoid conflicts of interest at work and to act with integrity and transparency.
• Nonprofit Conflict of Interest Policy: which is similar to a standard Conflict of Interest Policy but is tailored to address some specific rules that organisations need to comply with in order to maintain their charitable status.

Who is involved in an Employee Reimbursement Policy?

Usually senior members of staff will prepare the Employee Reimbursement Policy. This could involve senior managers or directors, payroll officer, or a human resources officer.

What can be the duration of this Policy?

There is no expiry date for an Employee Reimbursement Policy so it can remain in place indefinitely. However, it should be reviewed regularly to ensure that it is up to date with current laws and with the organisation's current practices.

What has to be done once the Policy is ready?

Once an Employee Reimbursement Policy is ready, it should be printed and/or saved electronically and kept on file with the employer, and employees should be made aware of it. For example, any existing employees should be notified of it and given a copy of it. Many employers use a Letter to Employees about New or Updated Workplace Policies to do this. In addition, each time a new employee starts work with the employer, the new employee should be given a copy of the policy.

It is also a good idea to keep the policy in a place where it is easy for employees to refer to it - for example, physical copies could be kept in communal areas such as staff rooms. It could also be made available online, for example on the employer's shared drive.

If the employer is getting employees to sign this policy, the employer should get each employee to return a signed signature page, and should keep those signed pages on file.

From time to time, if the employer implements new rules or procedures, it may be necessary to update the policy. When this occurs, the employer may notify employees of the updates, and release a new version of the policy. The employer may ask employees to sign a new signature page at that time, to acknowledge the updated policy.

What must an Employee Reimbursement Policy contain?

An Employee Reimbursement Policy should contain adequate information to allow employees to understand the employer's approach to reimbursement of expenses. The can include information about:

• Which employees the policy applies to.
• The types of expenses that will be reimbursed by the employer.
• Any applicable limits on the amount that employees may be reimbursed for each type of expense.
• What employees must do to seek approval for expenses.
• What documentation employees should keep regarding the expenses.
• The procedure employees should follow to seek a reimbursement.
• When reimbursements will be paid.
• Who to contact if employees have a complaint or need further assistance with expense claims.

Which laws are applicable to an Employee Reimbursement Policy?

Employee Reimbursement Policies may be affected by various Australian laws.

For example, tax implications of certain reimbursements may be affected by the Australian Taxation Office guidelines and Income Tax Assessment Act 1997 (Commonwealth).

Additionally, the Fair Work Act 2009 (Commonwealth) provides general protections for employees, which could be relevant in the event of disputes arising from the reimbursement process.

Ordinary principles of contract law, as provided by the common law, may also apply to the general terms of the employee's employment. If in doubt, seek legal advice.

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