Employers in California must, by law, reimburse their employees for business use of personal mobile phones. Under the Labor Code’s section 2802, employers are required to “indemnify [their employees] for all necessary expenditures or losses incurred… in direct consequence of the discharge of [their] duties, or of [their] obedience to the directions of the employer.” This legal principle applies with equal force to the mandated use of personal cell phones as it does to any other normal expense that the employee must bear in the course of doing business.
There is still a lot of confusion around the issue of employee compensation for mobile phone usage. Unfortunately, that means that many California workers are not being reimbursed for personal phone usage as they should be. This article will provide an overview of when an employer should reimburse, and also discuss a couple of factors that do not apply to this issue.
When Must an Employer Reimburse?
According to the 2014 ruling in Cochran v. Schwan’s Home Services, Inc., employers must reimburse employees for their usage of personal mobile phones when such usage is considered a “necessary” business expense. Of course, what is considered “necessary” may vary widely from one situation to another.
In the case mentioned above, Schwan’s Home Services evidently mandated, via clear phrasing in a policy, that employees had to use their personal cell phones on the job. Thus, there was really no place for a debate as to whether cell phone usage constituted a “necessary” expense for their employees.
Additionally, California’s appellate court ruled that when personal mobile phone usage is considered to be a necessary expense, the employer is required to reimburse a “reasonable percentage” of an employee’s phone-related costs. However, the court issued no specific guidance on what would constitute a “reasonable percentage,” or how to calculate such a figure, which leaves the phrasing open to a wide range of interpretations.
Factors that Don’t Apply to the Reimbursement Issue
Interestingly, there are a couple of factors that are not relevant to this issue, per the above mentioned ruling. These 2 factors are:
- Whether extra expenses were actually incurred. The court ruled that employers must reimburse employees a reasonable percentage of necessary cell phone use, regardless of whether the employee incurred an extra expense as a result. Thus, it logically follows that employees are entitled to reasonable compensation for a portion of their phone bill, whether their business use of the phone cost them anything extra or not.
- Which phone plan the employee uses. In our world of phone plans that offer unlimited calling, messaging, and data as an all-inclusive package, any California company that requires employees to use their personal phone for business purposes is still on the hook to reimburse them a reasonable percentage of costs.
Even though this ruling has been on the books for several years now, many California workers remain unaware that their employer may owe them money for the business use of their personal mobile phone. If you feel that your rights are being violated in this regard, then you should take action.
At Aiman-Smith & Marcy, we are dedicated to championing the cause of California workers, and upholding their rights in all aspects of employment. We have years of experience in recovering losses for employees that have been defrauded by their company. We are here to offer our expert services in your behalf.
If you’d like to learn more about how we can help, reach out to us today for a consultation. We will do everything in our power to ensure that your rights as a worker in California are respected.
