Not Getting Your Expenses Reimbursed? You Might Be Entitled To Triple Damages

Serious failure to reimburse employees for the business expenses they incur in their jobs may be tantamount to unlawful deductions from wages. In Fraelick v. PerkettPR, Inc., Fraelick sought such reimbursement from her employer, after a couple years’ worth of failures. While business expenses had never counted as unpaid wages under the Wage Act, the Supreme Judicial Court took a second look at the problem.

PerkettPR, a public relations firm, hired Fraelick in 2007, and her contract offered her compensation for business costs including telephone fees, laptop, office supplies, travel and other expenses. By 2009, PerkettPR began failing to cover Fraelick’s business expenses, a situation that continued over the next two years. When Fraelick ultimately refused to fly to Georgia for business due to the mounting unpaid expenses, PerkettPR soon delivered a check to Fraelick for the outstanding expenses and promptly retaliated by firing her three days later for her “unwillingness to pay expenses without receiving timely reimbursement.”

The SJC ruled that by forcing Fraelick to pay expenses – especially when PerkettPR was contractually bound to pay those expenses – PerkettPR effectively reduced the employee’s wages. Thus, the SJC ruled business expenses can be covered by the Wage Act, and failure to pay those expenses might entitle an employee to triple damages.

If you believe that you are in a similar situation, call us to learn about your rights.