Parshas Korach

Parshas Korach:
Employee Expense Accounts in Halacha


By: Rabbi Tzvi Price






Integrity in the workplace is a constant challenge and temptations abound, but nowhere is the temptation greater than when an employee is given an expense account. The ease at which one can pad the account with a perk here or an unnecessary expense there can be quite alluring. Even the best of men can find themselves having difficulty defending their business-related expenditures. Take George Washington, for instance. According to a book written by Marvin Kitman entitled George Washington’s Expense Account (2001, Grove Press), when Congress appointed Washington as commander-in-chief of the Continental Army, they offered to pay him $500 per month. However, he declined and instead asked only that his expenses be paid. Washington used his expense account to indulge lavishly in food, drink, and other amenities. In the end, the bill he presented to Congress was $449,261.51 (far greater than the $48,000 he would have received in pay for his eight years of service).

Sponsor an Issue of the PARSHA PERSPECTIVES

In this week’s Parshah (Bamidbar 16:15), we find a decidedly different attitude than Washington’s with regard to expense accounts. When Dasan and Aviram accused Moshe Rebbeinu of abusing his position of power, Moshe defended himself with the words, “… I have not taken even a single donkey of theirs, nor have I wronged even one of them.” The medrash (Bamidbar Rabbah 18:10) explains that the ‘single donkey’ mentioned by Moshe was a reference to a specific donkey – the donkey that Moshe used when Hashem commanded him to travel from Midian to Mitzrayim in order to save Klal Yisroel.


The medrash states: [What did Moshe claim? He said,] “Even that which I was allowed to take, I did not take from them! The custom in the world is that when a person does something (i.e. makes an expenditure) for the good of the community he is entitled to be reimbursed by the community. When I went from Midian to Mitzrayim, I should have been reimbursed for the donkey since I had incurred the expense for the sake of Klal Yisroel, and even so, I did not ask to be paid back.”
This medrash teaches an important attitude a person should have towards his expense account. Having an expense account is not a simple thing. It invites suspicion. Why did Moshe refrain from charging Klal Yisroel for a legitimate travel expense? It would seem that at least part of the reason was that Moshe understood that charging for one’s expenses can easily spur mistrust. So, if you are going to charge your employer for your legitimate expenses, make sure that you do something to show just how scrupulous you really are. Have your receipts on hand, and when possible, discuss your expenses with your employer before you incur them. While you may not need to go so far as to swallow your expenses the way Moshe did, you do need to make an effort to remain above suspicion.
There is however a level which goes beyond ordinary suspicion. What happens when an employer doesn’t believe that his employee actually incurred a particular expense and refuses to pay unless the employee brings proof? Of course, if some kind of agreement or policy regarding reimbursement issues was in force at the time that the expense was incurred, then that agreement will have to be followed by both parties. Often, however, there is no prior agreement. According to Halacha, what happens then?
The Rema in Choshen Mishpat 91:3 quotes the Shu”t Mahari”k (shoresh 10): [In a case where] a person is demanding reimbursement for expenses incurred for the sake of another’s property and the expenses had been incurred with that person’s permission, [if] the person [refuses to pay because] he does not know if the amount for the claim is valid, the person who is seeking reimbursement is required to swear to the veracity of his claim and then he is reimbursed….


Thus, an employer must believe his employee’s claim regarding normal and legitimate expenses, but only if the employee is willing to swear to the truth of his claim. (See Parsha Perspectives, Parshas Naso for a discussion about the role that an obligation to take an oath has in the present-day Beis Din.) This holds true not only when the employer believes his employee that an expense had been incurred and just questions the amount of the expense, but even when the employer questions the validity of the entire expense (see the Sm”a and Sha”ch there).
In Choshen Mishpat 375:8, we find that Halacha goes even further to reimburse someone who has made an expenditure on another’s behalf. There it states that even in a case where the person who made the expenditure did not first receive permission, if the owner of the property agrees that an expense had been incurred but challenges the amount of the claim, he is required to believe an oath made by the person who incurred the expense and reimburse that amount to him.
Take the following scenario for instance. An employee is sent by his employer to China to inspect a certain order of merchandise. While there, the employee happens to meet a very important prospective client. The employee tries to contact his boss to ask if he could take the man out to a very expensive restaurant (kosher, of course) in Beijing, but his boss is not answering his cell phone. The employee decides that the opportunity is too good to pass up and he takes the man out to the restaurant without prior permission from his boss. The restaurant bill ends up being $350, but the prospective client contacts the company when he gets back to the States and places a significant order.
When the employee returns home, he tells his boss about the unexpected expense and how great an opportunity it was. The boss believes the employee’s basic story but doesn’t want to pay for the expense for two reasons. Firstly, he claims that even though he would have done the same thing had he been there, the employee should not have spent any money on behalf of the company without prior authorization, and secondly, he does not believe the employee as to the amount that was spent at the restaurant. Unfortunately for the employee, he forgot to get a receipt from the restaurant for his cash payment and has no way of proving his claim. According to the halacha stated in 375:8, quoted previously, the employer would be obligated to pay his employee’s restaurant bill if the employee took an oath stating that the bill came to $350.
Another important point must be made about employee expense accounts. There remains the question as to the kinds of business-related expenses that are considered by Halachah to be the employer’s responsibility, and the kinds that are the responsibility of the employee. For instance, while expenses incurred on an overseas business trip are usually paid by the employer, bus fare for the employee’s ten minute ride to work is more often than not considered to be an expense that is the employee’s responsibility.
In Choshen Mishpat 331:2 we find a very important rule regarding these issues: Everything [goes] like the custom (minhag) of the land. In other words, unless there had been a clear agreement otherwise, the understanding between the employer and employee is to abide by the customs of the marketplace. If, for example, the majority of employers in a certain industry or geographic area reimburse their employees for personal phone calls made while away on an overseas business trip, then unless otherwise indicated that is considered to be the unspoken agreement between any employer and employee in that industry. If most employers do not reimburse for that, then that becomes the unspoken agreement. Everything [goes] like the custom of the land.
There is an interesting discussion among the authorities regarding the role of minhag with regard to this halacha. Let’s say that in a certain industry the minhag is that the employer is responsible to reimburse his employees for a specific kind of expense; for example, a percentage of the employee’s expenses for gas for his car. A particular employer who is in that industry hires an employee and offers him significantly more money than the normal salary. When the employee submits his gas station receipts at the end of the first month on the job, the employer refuses to pay his percentage of the bill.
The employer explains that since he hired the employee for much more money than normal it should have been clear to the employee that paying for gas would be entirely the employee’s responsibility. “What do you think? I would pay you so much and also pay your gas bills?” the employer asks. The Trumas Hadeshen (siman 323) rules in this sort of case that the employer’s claim is correct and he does not need to pay. The Katzos Hachoshen in 331, s.k. 1, argues against the Trumas Hadeshen’s reasoning. He understands that the existence of a minhag overrides any counter-indication that the extra money might give. In practice, the actual ruling by Beis Din in a case of this type will depend on the strength and nature of the minhag, the amount overpaid, and any other pertinent facts surrounding the case (see Mishpatei HaTorah, Bava Kama, siman 66).
With a growing number of people working for their employers from home, and with more employees travelling around the globe, employee expense accounts have become an even more necessary aspect of modern-day business. The issues regarding them have become more complex too. There are many questions that we did not even begin to discuss in this article. Are there ribis (usury) concerns when an employee is given a company credit card and he uses it for personal use? What happens when an employee is working for two different companies and he has an expense which both companies will reimburse? Can an employee claim an expense which he did not really have when the reason why he did not have the expense was due to his own ingenuity or inconvenience? Complex questions with complex answers. But one thing about employee expense accounts will always remain simple. Our attitude toward them should be one which upholds our honesty and integrity the way Moshe Rebbeinu taught us – plain and simple.

* * *

To dedicate an issue of the Perspectives, CLICK HERE
or contact the Bais HaVaad at

Join Our Mailing List

Leave a Reply

You must be logged in to post a comment.