Just last month, a California appellate court issued a ruling that requires an employer to reimburse employees a “reasonable percentage” of their cell phone bills when employees are required to use personal cell phones for work.
In Cochran v. Schwan’s Home Service, Inc., (2014) 228 Cal.App.4th 1137, a customer service manager sued his employer to recover expenses for work-related use of his personal cell phone. The trial court found no “expense” was incurred, therefor no reimbursement owed unless the employee was required to pay something out of pocket, above and beyond the expense to maintain the cell phone for personal use. The appellate court disagreed, finding an employer is required to reimburse the employee’s “expense,” regardless of whether the employee did not incur additional costs associated with the business use of the phone. The appellate court found the trial court erred in ruling the statutory obligation to reimburse depends on 1) whether the employee had an unlimited use plan, and 2) whether the employee or a family member paid the bill. Rather, the appellate court held the employer is required to reimburse and employee when that employee is obligated to use his or her personal cell phone for work-related calls, and the reimbursement owed by the employer is a “reasonable percentage” of the cell phone bills.
California Labor Code section 2802 requires employers reimburse employees for “all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.”
As a result of this ruling, employers should consider implementing written policies to require their employees track and submit expense reports regarding their work-related cell phone usage for reimbursement or consider providing employees with cell phones and calling/texting plans. Or avoid the problem altogether by clarifying personal cell phones should not be used for work.
If you are an employer in need of assistance with any part of your business, including establishing and enforcing employment policies, be sure to contact Kehr Law to consult with an experienced business attorney and ensure you are in compliance with California law.
In Cochran v. Schwan’s Home Service, Inc., (2014) 228 Cal.App.4th 1137, a customer service manager sued his employer to recover expenses for work-related use of his personal cell phone. The trial court found no “expense” was incurred, therefor no reimbursement owed unless the employee was required to pay something out of pocket, above and beyond the expense to maintain the cell phone for personal use. The appellate court disagreed, finding an employer is required to reimburse the employee’s “expense,” regardless of whether the employee did not incur additional costs associated with the business use of the phone. The appellate court found the trial court erred in ruling the statutory obligation to reimburse depends on 1) whether the employee had an unlimited use plan, and 2) whether the employee or a family member paid the bill. Rather, the appellate court held the employer is required to reimburse and employee when that employee is obligated to use his or her personal cell phone for work-related calls, and the reimbursement owed by the employer is a “reasonable percentage” of the cell phone bills.
California Labor Code section 2802 requires employers reimburse employees for “all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.”
As a result of this ruling, employers should consider implementing written policies to require their employees track and submit expense reports regarding their work-related cell phone usage for reimbursement or consider providing employees with cell phones and calling/texting plans. Or avoid the problem altogether by clarifying personal cell phones should not be used for work.
If you are an employer in need of assistance with any part of your business, including establishing and enforcing employment policies, be sure to contact Kehr Law to consult with an experienced business attorney and ensure you are in compliance with California law.
