Employment Law Blog

News, trends and analysis in employment law and HR

Oct 06, 2014

CALIFORNIA: Reimbursement for Business Use of Personal Phones is a Must

Wage and Hour 

Although many employees have “unlimited” minutes on their cell phone plans, employers must reimburse for the cost of a personal phone if it’s required to be used for work, as emphasized by a recent case in California. Employees of a food delivery company were required to use their personal cell phones for business, but were not reimbursed for their expenses.

Under California Labor Code 2802, employers must reimburse employees for all necessary  expenses incurred in their work duties. When the employees filed a class action lawsuit to enforce this labor code, the employer argued that many employees didn’t incur extra expenses to use their personal phones for work because they have unlimited-use phone plans. Essentially, the employer  claimed that the employee would be paying the same amount for the phone bill, regardless of whether or not the phone was used for work. The court, however, was unconvinced. Not only did the employer’s policy not account for employees who may have paid extra for the business use of their phone, it also violated the law regardless of the employee’s individual phone plans. The court’s interpretation was clear: “Whether the employees have cell phone plans with unlimited minutes or limited minutes, the reimbursement owed is a reasonable percentage of their cell phone bills.” (Cochran v. Schwan’s Home Service, Inc., Cal App, Aug. 2014).  

Tips: Under California law, employees should not bear the cost burden of conducting their employer’s business. If employees are using personal devices for work, including cell phones, tablets, or home computers,  employers should review whether  they are reimbursing their employees for the business use. Keep in mind the same rule applies for all business expenses, such as mileage, meals, lodging, and other costs of doing business. If you need help evaluating your reimbursement obligations, reach out to your Vigilant staff representative.

For more examples of wage law issues, reference our related topics which discuss compensation issues by state.

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