Reimbursing employee cell phone use …

Robin Noah

Robin Noah

Under California law, employers must now reimburse employees cell phone usage for certain job-related expenses.

As noted in a recent California Chamber newsletter: “In an unprecedented decision, a California court of appeal recently ruled that an employer must reimburse an employee if the employee is required to use a personal cell phone to make work-related calls; this is true even when the employee did not incur an extra expense by making the work calls because he/she had an unlimited data plan. The court ruled that the employer must pay some reasonable percentage of the employee’s cell phone bill. “

The case for the decision is identified as Cochran v. Schwan’s Home Service, Inc., 2014 WL 3965240 B247160 (2014).

This case could ultimately be appealed to the California Supreme Court. In the interim, employers may want to review their cell phone policies.

A key component of the decision was the existing Labor Code Reimbursement Requirements: Section 2802 requires an employer to reimburse employees for all monies that they necessarily spend or lose directly related to performing their job duties or following the employer’s directions. For example employers need to reimburse common expenses as work-related travel and dining expenses and mileage when an employee uses a personal car for work-related business.

The key question was “Does an employer always have to reimburse an employee for the reasonable expense of the mandatory use of a personal cell phone, or is the reimbursement obligation limited to the situation in which the employee incurred an extra expense that he or she would not have otherwise incurred absent the job?”

The answer from the court was “reimbursement is always required.” To comply with the Labor Code, an employer must pay “some reasonable percentage of the employee’s cell phone bill.”

Issues of employees with special plans or where a third party is actually paying the bill were not considered for the ruling. Instead to prove liability all the employee needs to show is that “he or she was required to use a personal cell phone to make work-related calls, and he or she was not reimbursed.”

According to the court, the ruling prevents the employer from passing its operating expenses onto the employee and avoids an employer windfall.

 

The appellate court did not provide guidance on how much an employer will have to pay when the employee subscribes to an unlimited data plan or when someone else pays for the employee’s plan – the court noted only that the reimbursement needs to be “some reasonable percentage.”

If this is a current situation for your company I suggest you contact an attorney that specializes in labor law to help you unwind this ruling and that you update your policy manuals. You can search the internet for additional information.

Author:  Robin Noah, Executive Coaches of Orange County, www.ECofOC.org