News

Work-related use of personal cellphones now reimbursable

September 4, 2014

In a troubling ruling for employers, the California Court of Appeal has required employers to reimburse employees for all work-related calls on a personal cell phone, even when the employer does not require the use of cell phones. When the exact cost of work-related calls cannot be determined (for example, when an employee has a cell phone plan with unlimited minutes), the employer must reimburse “a reasonable percentage” of the employee’s monthly cell phone bill.  In Cochran v. Schwan’s Home Services, Inc., 2014 WL 3965240 (Aug. 12, 2014), the court concluded that California Labor Code section 2802 requires reimbursement whenever an employee’s use of his or her personal cell phone for work-related purposes is “reasonably necessary” to the employee’s work.  An employer who fails to do so could face liability for cell phone expenses as well as statutory penalties and attorneys’ fees, both on an individual and class-wide basis. 

The court’s ruling creates a potential logistical nightmare for employers. Employers should either immediately prepare and implement a clear policy on employee cell phone use or review and revise their existing policy.  If the use of a personal cell phone is not required for employees to do their job, the policy must explicitly so state and must direct employees not to do so.  But if an employee still uses a personal cell phone for work purposes despite this policy, and the use was “reasonably necessary,” employers still must reimburse the employee. If cell phone use is necessary for employees to perform their work, employers should consider providing employees with cell phones and paying for appropriate voice and data plans (along with providing guidelines for proper usage).  Alternatively, employers should implement an expense report system to ensure timely payment for the actual cost of calls, or a “reasonable percentage” of employees’ unlimited cell phone plans, that accounts for the volume of work-related calls made by employees on their personal cell phones. 

Please contact Puneet Sandhu (psandhu(at)yzblaw.com) or Harry Zinn (hzinn(at)yzblaw.com) at 213-362-1860 for further assistance on this new and evolving legal development.

 

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