This Policy applies to all ABM team members who work in the States of California and Illinois. It does not matter whether the phone bill is paid for by a third person, or at all. PERSONAL CELL PHONE USAGE . So, how does an employer reduce or eliminate the risk of not knowingly violating the law? 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.”  (Cochran v. Schwan's Home Services, Inc. (2014) 228 Cal. 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. Less administrative support and response to employee if the fixed amount is exceeded. 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! 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.”. Interest shall accrue from the date on which the employee incurred the necessary expenditure or loss. 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. In a 2014 case, an employee in California brought a lawsuit against his employer on behalf of customer service managers (essentially a class action on this issue!) If you decide to reimburse employees for their cell phone use, should you do so under an accountable or non-accountable plan? Differences in reimbursement can be justified based on position (and amount of usage). 1011 Camino Del Rio S, Suite 531 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. 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. 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). When employees must use their personal cell phones for work-related calls, then they are incurring an expense. Representation in business, real estate, construction, home care, trust and probate litigation and general civil litigation. No text or graphic contained in this entry is to be or should be used or relied upon as legal advice. 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%). Cellular coverage found on 4 networks • 5G coverage in California is provided by AT&T, T-Mobile, Verizon Wireless. United States. When employees must use their personal cell phones for work-related calls, Labor Code section 2802 requires the employer to reimburse them. 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. By D. Andrew Quigley & Roland M. Juarez on July 29, 2019. N… But work usage may vary depending on the position. So, what to do? Personal Cell Phone and Expense Reimbursement Policy – CALIFORNIA and ILLINOIS January 1, 2019 . The employer only pays for what they are "using". Cochran v. Schwan's Home Serv., Inc., 228 Cal. 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. 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. ), Per the Cochran court, “The purpose of this statute is “ ‘to prevent employers from passing their operating expenses on to their employees.’“ (Id. All you have to do is punch in your address and we do the rest. This entry does not create an attorney-client relationship. (b)   All awards made by a court or by the Division of Labor Standards Enforcement for reimbursement of necessary expenditures under this section shall carry interest at the same rate as judgments in civil actions. 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? 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) There are a total of 39 carriers with plans starting at $6/mo with 1GB data. Having no protection of company’s intellectual property. Averaging is probably the most accurate method to calculate the “reasonable percentage" an employer is expected to pay. Also, the details of the employee's cell phone plan do not factor into the liability analysis. Below is a list of state & local taxes and fees on monthly cell phone service. 4th 1137, 1140. 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%). An Employer’s Duty to Reimburse. This entry does not give specific legal advice about your specific legal problem. at pp. A Program of the California Public Utilities Commission © 2006-2019, State of California. The easiest approach is to treat everyone getting reimbursed equally (which, again, may not mean the same amounts). In fact, it may be worse because it applies to all California employees, exempt and non-exempt. It is irrelevant whether the employee changed plans to accommodate work-related cell phone usage. However, the court did not provide guidance as to what is meant by “reasonable percentage.” Does it mean 20 percent? App. Expense reimbursement: In a typical reimbursement policy, employees purchase a cell phone (from a list of company-approved devices) along with the service plan. heat illness awareness, meal and rest breaks, overtime, and others will appear to make our business lives just a little more exciting! If you want specific legal advice about your particular legal issues, or if you want to create an attorney-client relationship, you need to retain the Law Offices of Ron A. Stormoen by a signed written retainer agreement. Again, the key is that employees are reimbursed a “reasonable percentage” of their phone bill. 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. The answer is that reimbursement is always required. Distribute the policy to employees, and remember to inform new employees when they are hired. These rates calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. We highly recommend you check with your labor and employee relations attorney as there may be other parts of the case to be considered. 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. 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. App. 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. Under newly enacted section 9.5 of the Illinois Wage Payment and Collection Act (“Act”) (effective January 1, 2019), employers are obligated to reimburse employees for all necessary expenses incurred within the scope of their employment. These things can be handled on a case by case basis, but it could be the next arrow in the class-action quiver. App. Employers consider several factorswhendrafting these policies and determining stipend amounts.Here are just a few: 1. 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. 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 law allows employees to sue their employer for reimbursement of the business use of their personal cell phone, internet, or even vehicle. This means that an employee can recover the costs associated with the business use of their personal cell phone, internet, and car. California Employment Law Report. 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. which can also be the subject of employee compensation. The federal tax rate on wireless service (called the USF, or Universal Service Fund) is 6.64%. 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. ... (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. An explosion in the smartphone market over the past 3-5 years has been both a blessing and a curse for the security industry. 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. 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. 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. How much should you reimburse each employee? 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. All Rights Reserved. Personal cell phone use for any work-related calls is no different than unauthorized overtime. California Law Addresses Employee Business Expense Reimbursement. 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). This figure varies depending on the company and the agreed-upon policy. Even if they don’t “grumble,” all employees using their personal phones for work must be reimbursed (that should be the first biggest and clearest takeaway from this article; the second, and less clear takeaway, is the amount of reimbursement, but hopefully we have given you some tools to create a policy). 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 … Cochran v. Schwan's Home Services, Inc. (2014) 228 Cal. 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 also have to worry about the damage careless employees have on the devices themselves. Getting the Best Plan & Coverage. More? 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