Gone are the days when every employee received a dedicated phone line to handle business-related calls. Many employers have eliminated landlines for most staff members, but some of those employees may still need to make or receive phone calls from time to time. As a result, personal cell phones have become more common for business usage, leaving employers wondering whether they need to offer compensation for these personal devices.
Recently, a wage and hour class action lawsuit in California settled for more than $5 million. (Marley Castro, et al. v. ABM Industries, Inc.) It reminds all employers of the massive scope of California Labor Code section 2802’s business expense reimbursement requirement. In this specific situation, the plaintiffs alleged that the company failed to reimburse employees for the required use of their personal cell phones for business-related purposes.
The company required all employees to use their personal cell phones to:
- clock in and out from work,
- and (2) to communicate with their supervisors.
California employers are required to reimburse employees for all business-related use of their personal cell phones. Specifically, that California law requires the reimbursement of “some reasonable percentage” of employees’ cell phone bills if it’s required to use a personal device for business purposes, regardless of whether the employee incurs charges over their plan cost.
Examples of business-related uses for which employers may require employees use their personal cell phones include:
- Clocking in and out for work or meal periods
- Checking or updating schedules via a scheduling app or otherwise requiring them to use data
- Texting or calling a manager regarding scheduling or for other work-related purposes
- Using data plans for GPS purposes
- Requiring employees to use cellphones for purposes of responding to emergency calls or for on-call time periods
- Any other required use of a personal cellphone (text, call, or data) for business-related purposes
If you’re an employer in California, it’s worth reviewing your company’s reimbursement policies and determining whether it includes coverage for personal cell phones. If employees are required to use their cell phones for work, employers have the following options available to them:
- Reimburse employees for actual cell phone fees incurred for business purposes
- Reimburse for a percentage of cell phone fees that accurately reflects the amount of mandatory business usage (and inform employees that if their business-related use exceeds that flat rate, a process employees should follow for reimbursement)
- Provide employees with a cell phone or another communication alternative for business use
You may consider paying a flat monthly stipend (e.g., $50). Regardless of what your company decides, make sure the policy is in writing and supplied to all employees who use their personal devices for business purposes.
If your company doesn’t have a current policy in place and/or has failed to reimburse employees in the past, we recommend consulting with a qualified employment law attorney on how to indemnify employees for past cellphone usage.
