Your company needs an employees claims policy

Why you need an employees claims policy

Left unchecked, employee claims may run wild and cause financial loss to the company. While it is true that employers should compensate employees for their time and effort, some employees take advantage of their employers by abusing their claims. They make unsubstantiated claims, when they are not entitled to those claims. Or maybe they make multiple claims, when they are supposed to only make one claim. That means an unsuspecting employer is losing money and an unscrupulous employee is drawing a profit at his employer’s cost.

With an employees claims policy, you outline the circumstances in which an employee can make claims, and the qualifications to those claims. This helps prevent dispute with employees, which could cause serious loss of employee morale and loss of productivity. Further, it helps discourage an employee from trying to “game the system” and enrich himself at his employer’s expense.

At the same time, it also makes clear why an employee’s claims may be rejected, thus avoiding a claim of constructive dismissal.

What should go into an employees claims policy?

Perhaps an employees’ claims policy should have the following:

1. Require the employee to make his claims in a timely manner;
2. Require the employee to include receipts and other evidence to substantiate the claim;
3. Require the employee to state that the claim is true;
4. Give the employer discretion and time to consider each claim;
5. Give the employer a procedure to accept or reject each claim;
6. Require the employee to be responsible if the claim is found to be false;
7. Allow the employer to adjust the claims in case multiple claims are made for essentially the same job (which should be claimable once).

An example of an employees claims policy.

1. Expense claims will be paid only if they are approved by the board of directors.
2. All expense claims will be submitted in writing, accompanied by a receipt, and accompanied by a signed duplicate copy of the expense claim form.
3. The board of directors will pay (if approved) only those expenses which are reasonable and necessary, and related to the employee’s job.
4. The board of directors will reimburse an employee for only those expenses that are related to the employee’s job and are incurred in the performance of duties related to the employee’s job.
5. For purposes of this policy, expenses are deemed to be “reasonably and necessarily incurred” only if they meet the following conditions:
   1. The expense was incurred by an employee at the direction or recommendation of the board of directors or its officers; and,
   2. The expense was incurred during time off from work to conduct board business; or,
   3. The expense was incurred during time off from work as a result of being called on behalf of the company, such as to attend a board meeting or other board business; or,
   4. The expense was incurred as a result of conducting board business during normal hours for work; or,
   5. There was no reason for the employee to incur the expense (i.e., its expenditure was not reasonable or necessary), or,
   6. The expense was not approved by the board of directors prior to incurring it or as soon thereafter as practicable.
6. Expenses approved by the board of directors will be paid by check drawn on the company’s account; however, there will be no reimbursement for expenses that are not reasonably and necessarily incurred under this policy.
7. An employee may submit a request for reimbursement for any expenses that are reasonably and necessarily incurred under this policy; provided that such request is accompanied by a signed duplicate copy of the employee’s expense claim form (and all receipts associated with such request).
8. An employee who has been reimbursed under this policy may submit a request for reimbursement for any small purchase (such as lunch, coffee, etc.) which does not meet the above-cited definition of “reasonably and necessarily incurred” expenses; provided that such request is accompanied by a signed duplicate copy of the employee’s expense claim form (and all receipts associated with such request).
9. Any request for reimbursement must be submitted by the employee to the claims department within fourteen (14) days.
10. For purpose of reimbursement of employees under this policy, the employee should declare that his/her claims are true and if found to be untrue, the employee shall be responsible for reimbursing the company, together with any penalties allowed by law.
11. The company reserves its discretion on the amount allowed under the claim and the company the right to consolidate several of an employee’s claims which based on events occurring at or around the same time.

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This article has been prepared for general information purposes only and should not be treated as legal advice. Please consult with a lawyer before making any decision. In the meantime, if you need help crafting an employees claims policy for your company, feel free to reach out…