You'll know your employees have the proper tools to communicate and report when they're on the job. The law allows employees to sue their employer for reimbursement of the business use of their personal cell phone, internet, or even vehicle. Opens the door for discrepancy between the employer and employees definition of "some reasonable percentage". When employees must use their personal cell phones for work-related calls, Labor Code section 2802 requires the employer to reimburse them. who were not reimbursed for expenses pertaining to the work-related use of their personal cell phones, alleging labor code violations and unfair business practices, and seeking declaratory relief and statutory penalties. You can edit the text in this area, and change where the contact form on the right submits to, by entering edit mode using the modes on the bottom right. 1144.). • 3G/4G LTE coverage in California is provided by AT&T, Sprint, T-Mobile, Verizon Wireless. Some say the safest approach is to pay the entire cost of an employee’s phone. The Cochran court did note that the employer can engage in some calculations: “In calculating the reimbursement amount due under section 2802, the employer may consider not only the actual expenses that the employee incurred, but also whether each of those expenses was ‘necessary,’ which in turn depends on the reasonableness of the employee's choices.“ (Id. Yes, reimbursement is alwaysrequired. The site receives a flat reimbursement rate, outside of any other reimbursement arrangements such as inpatient DRGs or RHC per-visit payments. Longer Answer with Practice Recommendations: An Employer Must Reimburse An Employee For The Employee’s Use Of A Personal Cell Phone For Work Related Duties. All Rights Reserved. Again, the key is that employees are reimbursed a “reasonable percentage” of their phone bill. If the employer owns the phone and maintains appropriate policies, it will go a long way toward enforcing and monitoring cell phone usage. Administration costs increase and not practical when employees use unlimited plans. This entry does not create an attorney-client relationship. The cost of going this route could get extremely high. Copyright © Silvertrac Software. 1.1. Until more guidance is provided from the courts or a government agency, the employer should carefully monitor its practice and make sure it has a policy of “reasonable” reimbursement and fully address any employees grumbling about fair reimbursement. But work usage may vary depending on the position. It does not matter whether the phone bill is paid for by a third person, or at all. 1. Because of the differences in cell phone plans and work-related scenarios, the calculation of reimbursement must be left to the trial court and parties in each particular case.“ (Id. In fact, it may be worse because it applies to all California employees, exempt and non-exempt. Under these policies, many employers are paying anywhere from $30 to $50 per month toward employee cell phone bills. There are a total of 39 carriers with plans starting at $6/mo with 1GB data. Otherwise, the employer would receive a windfall because it would be passing its operating expenses on to the employee. The beginning of 2019 brought substantial employment case settlements and verdicts. All you have to do is punch in your address and we do the rest. California Employment Law Report. The State of California has led the way in defining what employers are required to do when asking officers to bring their personal phones to work. Subscribe to cell phone reimbursement. This figure varies depending on the company and the agreed-upon policy. In December 2018, the Internal Revenue Service issued the 2019 optional standard mileage rates. A California Court of Appeal recently issued a short decision in Cochran v.Schwan’s Home Services, Inc., B247160 (Aug. 12, 2014) that took an expansive view of an employer’s obligation to reimburse employees for business expenses. App. By Kim Gale June 4, 2019 . While these standards don't apply in every state or country, employers should be aware of the standards currently being enforced in California, because history tells us that most U.S. states that favor the employee will be following suit. Reimbursement is required even if the employee does not actually incur extra expenses as a result of his or her use. While there is some discretion the employer can exercise in determining the amount of reimbursement (such as actual expenses and the reasonableness of the employee’s choice:  i.e., was the employee “required” to use their own phone), the following language by the court shows the standard is still reasonable reimbursement (which means if the issue went to court a judge or jury would determine reasonableness, which means an employer should be careful in this area). In sum, employers must reimburse California employees (without distinction) for cell phone use when employees are required to use their personal cell phones for business purposes. We think a more palatable and reasonable approach is for the employer to pay a flat monthly stipend (e.g., $10 - $100 or some estimated percentage like 10-50%:  the reimbursement number is a business decision based on history of usage). Regardless, employers need to prepare for the worst. Employers and employees frequently inquire about whether an employer must reimburse an employee when the employee uses their personal cell phone for the employer’s business? What the Courts Say About Reimbursement of Cell Phone Expenses. You can add the federal tax rate of 6.64% to the tax rate of your state to find out what percentage you are paying in taxes. Another approach is to purchase company cell phones for employees. Book a hotel in California Per-diems for other cities in California: If you are traveling to a city in California that does not have a specific per diem rate the standard per-diem rates of $94.00 per night for lodging and $55.00 per day for meals and incidentals apply. The latest litigation trends, court decisions, & issues on California Employment Law. When developing and implementing a policy, employees need to be treated equally in that they all need to be reimbursed for work related phone use. 1144.). The Cochran case provides guidance on how to calculate a reasonable reimbursement for the mandatory use of personal devices such as cell phones: employers must compensate their employees for a "reasonable percentage" of the employee's cell phone bill under Section 2802. 75 percent? More? A "necessary” expense is defined in section 9.5 as all reasonable expenses that: (a) are required by the employer in the discharge of the employees’ duties; and (b) are primarily for the benefit … But how do you calculate “an undefined reasonable percentage?” Unfortunately, the Court didn’t answer the question, but said, “because of the differences in cell phone plans and work related scenarios, the calculation of reimbursement must be left to the trial court and parties in each particular case”. Put this policy in writing and expressly state that employees may submit expense reimbursement requests each month to the extent that the flat rate does not cover the total expenses for the usage that month. WhistleOut's new coverage check feature supercharges an already robust comparison engine by allowing you to instantly see what coverage is like at your location. ... (FLSA) does not require employers to reimburse employees for cell phone use, but California law does require cell phone reimbursement per the California Labor Code Section 2802. You are also entitled to reimbursement of cell phone expenses if your employer requires you to use a particular “app” or function on the phone. On one hand, having a smartphone with a mobile security guard app in every officer's pocket presents the opportunity for better communication, increased transparency, and reduced costs. These things can be handled on a case by case basis, but it could be the next arrow in the class-action quiver. With this method you would have to calculate the average proportion of time spent on work calls and pay that percentage of the total bill for that period.. Redirects responsibility for providing proof of work-related phone usage so that employees can be compensated for cost of such usage, to the extent the actual cost can be determined. BYOD, or bring your own device, policies are becoming more common in work environments. Personal cell phone use for any work-related calls is no different than unauthorized overtime. 1144-1145.). If an employee in California uses a personal cell phone for business-related use (i.e., “in direct consequence of the discharge of his or her duties or his or her obedience to the directions of the employer,”), a California employer must reimburse the employee, even if the employer prohibits the employee from using his or her personal cell phone for business use. In the Cochran  case mentioned above, the court of appeals held that employers must reimburse a “reasonable percentage” of their employees’ cell phone bills. at pp. 4th 1137 (2014). Not only does our interpretation prevent employers from passing on operating expenses, it also prevents them from digging into the private lives of their employees to unearth how they handle their finances vis-à-vis family, friends and creditors. This means that an employee can recover the costs associated with the business use of their personal cell phone, internet, and car. Author: jsimpelo Created Date: 07/11/2016 11:15:00 Title: Sample Policy - Company Cell Phone or Reimbursement for Personal Cell Phone Use - (4/2016) (00374715.DOCX;1) If a cell site location is near major metropolitan areas,then cell tower lease rates will clearly be higher due to the value of the site to the wireless carriers. 4th 1137, 1140. The procedures for issuing, contesting, and enforcing judgments for citations or civil penalties issued by the commissioner shall be the same as those set forth in Section 1197.1. The California Court of Appeal in Cochran v. Schwan’s Home Services, Inc., 228 Cal.App.4th 1137 (2014), resuscitated a putative class action lawsuit filed on behalf of 1,500 customer service managers who were not reimbursed for expenses incurred as a result of work-related use on their personal cell phones. We highly recommend you check with your labor and employee relations attorney as there may be other parts of the case to be considered. Want to learn more about Steve and his work with Arthur McBeth & Associates? Labor Code section 2802, referenced by the court, governs this area [concerning reimbursement for all necessary employee expenditures or losses, not just cell phone use) and provides the backdrop for the court’s opinion: (a)    An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful. Let’s take these three decisions in order. This is so even if the employee incurs no additional expense due to the work-related calls, such as if the calls are within the employee’s plan for unlimited minutes or the cell phone bill is paid by someone, other than the employee! • Originating sites are to use HCPCS code Q3014 when su bmitting facility fee claims. All of which could theoretically be the subject of compensation under the Cochran case. How much should you reimburse each employee? Obviously the most accurate way to track and pay work-related cell phone usage costs. The employee must maintain the type of cell phone coverage that is reasonably related to the needs of the employer’s business, and the reimbursement must be reasonably calculated so as not to exceed expenses the employee actually incurred in maintaining the cell phone. This feature is the first of its kind, and empowers consumers to make better decisions when it comes to wireless. The answer is that reimbursement is always required. This article provides employers with analysis and tips related to expense reimbursement of remote workers in California. In other words, it is no concern to the employer that the employee may pass on the expense to a family member or friend, or to a carrier that has to then write off a loss. It is irrelevant whether the employee changed plans to accommodate work-related cell phone usage. These payments are referred to as mobile stipends. The consequences to the employer for violations are severe, including penalties, interest and attorney’s fees (subsections (b), (c) and (d).). As you can guess, the cell phone usage is only the tip of the iceberg, because it can easily be extended for laptop computers, tablets, Internet charges, etc. Expense reimbursement: In a typical reimbursement policy, employees purchase a cell phone (from a list of company-approved devices) along with the service plan. Let's consider the pros and cons of the options at hand: This would require employees to submit any proof that the proportion of work to non-work calls exceeds this fixed amount. The Court held that “when employees use their personal cellular phones for work-related calls,” California law (i.e., Labor Code Section 2802) “requires an employer to reimburse them.”. (c)    For purposes of this section, the term “necessary expenditures or losses” shall include all reasonable costs, including, but not limited to, attorney’s fees incurred by the employee enforcing the rights granted by this section. by Jennifer Azara. However, what is not well understood (or developed in the law) is how much must be reimbursed. Having no protection of company’s intellectual property. Update: On November 25, 2014, the California Supreme Court denied a petition for review and denied a request to depublish the appellate court case. The IRS publishes standard mileage rates each year (and sometimes adjusts these rates during the year). Labor Code section 2082 is extremely powerful. YouTube Spotify RSS Twitter LinkedIn Facebook Instagram VISIT OUR WEBSITE. E.g., One employee whose job depends on the phone, may be reimbursed 100%; in office staff, on the other hand, with less frequent use could get a stipend of $25 (or $50 or $100) or a lower percentage than others (e.g., 10%). Interest shall accrue from the date on which the employee incurred the necessary expenditure or loss. If you pay employees a greater amount than their entire monthly cell phone bill, it must be recorded as additional income for that individual. The Cochran court determined that Labor Code section 2802 included an employer’s obligation to reimburse an employee whenever the employee uses his/her cell phone for work related duties. This entry does not give specific legal advice about your specific legal problem. This Policy applies to all ABM team members who work in the States of California and Illinois. A cell phone reimbursement stipend, or a cell phone allowance, is a sum of money given to employees for them to purchase on their cell phone plans. Cochran v. Schwan's Home Services, Inc. (2014) 228 Cal. ), Per the Cochran court, “The purpose of this statute is “ ‘to prevent employers from passing their operating expenses on to their employees.’“ (Id. January 2019, the payment amount is “80% of the lesser of the actual charge or $26.15”. Is reimbursement right for your business? The California Court of Appeal agreed there were violations and held (which means, it’s now the law): “We hold that when employees must use their personal cell phones for work-related calls, Labor Code section 2802 requires the employer to reimburse them. All Rights Reserved. Also, the details of the employee's cell phone plan do not factor into the liability analysis. A Program of the California Public Utilities Commission © 2006-2019, State of California. Carrier fees 2. California law requires that employers reimburse employees for “some reasonable percentage” of their cellphone bills if the employer requires them to use their personal cellphones for a business purpose – regardless of whether the employee incurs charges over and above what his or her plan costs. The new year brings new employee reimbursement obligations for Illinois employers. Below is a list of state & local taxes and fees on monthly cell phone service. To show liability under section 2802, an employee need only show that he or she was required to use a personal cell phone to make work-related calls, and he or she was not reimbursed. Cochran v. Schwan's Home Serv., Inc., 228 Cal. 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. Again, the key is that employees are reimbursed a “reasonable percentage” of their phone bill. Damages, of course, raise issues that are more complicated.“ (Id. These rates calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Also, the court noted that even though some employees have plans which do not result in any additional cost for work use, the employer is still required to reimburse: “The threshold question in this case is this: Does an employer always have to reimburse an employee for the reasonable expense of the mandatory use of a personal cell phone, or is the reimbursement obligation limited to the situation in which the employee incurred an extra expense that he or she would not have otherwise incurred absent the job? Effective January 1, 2019, the Illinois Wage Payment and Collection Act requires employers to reimburse employees for all necessary expenditures or losses incurred within the employee’s scope of employment and directly related to services performed for the employer. at p. 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