Our employees use their personal cell phones at work — hourly employees use an app on their phones to clock in and out and managers use their phones throughout the day to communicate with clients and other managers. Do we have to reimburse employees for that use and if so, in what amount?
California Labor Code section 2802 requires that employers reimburse employees for all necessary expenses incurred in the course and scope of their employment. In other words, if you require employees to do something and they incur an expense in doing so, you must reimburse them for the expense.
Reimbursable expenses can take many forms, such as: mileage when an employee is using their own car for work purposes; the cost of meals and lodging when an employee travels for work; and, as is the case in this question, cell phone expenses when employees use their personal cell phone for work purposes.
Required Expense?
Whether an employer must reimburse an employee for an expense depends on whether the employer required the employee to incur the expense. In this situation, that means determining whether you are requiring employees to use their personal cell phones for work purposes.
If you tell hourly employees that they must install an app on their personal cell phones and use it to clock in and out, you must reimburse them for the expense of doing so. Similarly, if you require that managers use their personal cell phones to communicate for work purposes, you must reimburse them for that expense.
If, however, you give managers a company cell phone to use and a manager chooses to use their own cell phone instead, that would not be a reimbursable expense — because you are not requiring them to use their own phone.
Determining how much to reimburse employees when you require them to use their personal cell phones for work purposes can be tricky. Case law states that employers must reimburse “some reasonable percentage” of an employee’s cell phone bill — even if the employee did not incur any extra expense using their cell phone because they have an unlimited data plan.
‘Reasonable Percentage’ Varies
What is a “reasonable percentage” will vary depending on how often the employee must use their phone for work purposes. In this example, the reimbursement for the hourly employees who use their phones only to clock in and out could be a smaller percentage than the reimbursement for managers, who must use their phones throughout the workday for work-related communications.
If you require employees to use personal cell phones, you’ll need to consider how often they use their phones for work purposes and then determine what would be a reasonable reimbursement given that amount of use.
To do so, you may need to communicate with employees regarding when and how they use their phones. You also can instruct employees to alert you if they believe the reimbursement they’re receiving isn’t reasonable given the amount they are using their phones.
Column based on questions asked by callers on the Labor Law Helpline, a service to California Chamber of Commerce preferred members and above. For expert explanations of labor laws and Cal/OSHA regulations, not legal counsel for specific situations, call (800) 348-2262 or submit your question at www.hrcalifornia.com.
