Make sure your staff expense claims policy is heavy on detail

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Leader with his team

Businesses should ensure detailed policies about how to claim work expenses are communicated to their workers as soon as they start on the job, according to one employment lawyer.

Federal politicians’ expenses have been in the spotlight this week after Liberal Party MP Sussan Ley stepped aside as health minister while an investigation into her use of travel expenses takes place. Foreign Minister Julie Bishop is also faces questions about her travel claims, as are Labor frontbenchers Chris Bowen and Brendan O’Connor.

Acting special minister of state Kelly O’Dwyer has said the government will introduce legislation into Parliament in the first half of this year that will make changes to parliamentary expense policies, including the definition of what constitutes “official business”.

“The Australian people expect that parliamentarians adhere to very high standards when it comes to claiming of work expenses,” O’Dwyer said yesterday.

In 2016 an independent review into parliamentary entitlements made 36 recommendations for changes to the way politicians claim expenses, from changing the wording of claims from “entitlements” or “benefits” to “work expenses”, to adopting a set of principles to help politicians decide what it is an acceptable work claim.

Read more: Penalty rates, late payments and ATO debts: 14 must-watch policy areas for SMEs in 2017

However, expense claims aren’t just a concern for politicians, with McDonald Murholme lawyer Bianca Mazzarella telling SmartCompany businesses should also ensure their policies are clear when it comes to staff claiming reimbursement for expenses to prevent conflicts later.

“In contracts there’s [often] wording such as ‘reasonable travel expenses’, but that’s quite vague,” says Mazzarella.

“I think best practice is that the policies are attached to the contract.”

While it’s common for businesses to be expected to cover the cost of things like travel expenses for staff, some workplace policies remain vague. According to Mazzarella, it’s important for employers to include three key elements: what is acceptable according to the policy; how a staff member pays for or is reimbursed for costs; and the time frame for reimbursement claims to be met.

“Right at the end of the policy there should be something about what would happen if somebody using that expense policy in an inappropriate way,” Mazzarella says.

Make the result of breaches clear

“I think this is an area that can be confusing for employees,” says Mazzarella, saying staff should be told in clear terms that all elements of a policy apply to them.

“If you have someone breaching a policy, it’s essentially stealing, isn’t it?” she says.

Expense policies should detail the steps taken if a staff member is thought to be incorrectly claiming items, which could include a series of warnings for breaches.

The other area of confusion is the scale of claims, says Mazzarella. Businesses can include claim limits in their expenses policies, ideally with some room for higher claims to be reviewed if staff require them.

“You might put a monetary limit and say if “it’s not possible, contact this person”. That would certainly help,” she says.

Senior Associate at TressCox Vanessa James-McPhee says that along with being detailed, the best policies are organic and should be reviewed to ensure they meet the needs of the workplace without creating any unneeded risk.

“Having an organic policy is just one way to minimise grumbles and moans from employees having to deal with out dated policies, and the potential for any exaggerated and fraudulent claims,” she says.

“It important for businesses to regularly update and modify their expense and reimbursement policies over time to reflect changes, including introduction of new government legislation, changes in the business environment, fluctuations in travel and accommodation costs. ailing to adapt to these changes, a business’s expense policy is liable, over time, to becoming increasingly inefficient and ineffective.”

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* This article was updated on January 11 at 12:30pm to include comments from Vanessa James-McPhee at TressCox.

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Emma Koehn is SmartCompany’s senior journalist.

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  • Mike Zeederberg

    That’s the lawyers approach – the alternative is the high performing Silicon Valley approach – Netflix has a 5 word expenses policy – “Act in Netflix’s best interests.” It’s interesting how close this is to the mythical “pub test” for politicians.