Since January 1, 2016, California employers must reimburse employees for use of their personal cell phones for mandatory business purposes. (Cochran v. Schwan’s Home Service, Inc). This ruling affects millions of employers who must update their company policies in order to stay compliant with the new law. While this law has been on the books for over two years now, it appears as though many companies have not addressed this law or made it part of their employee reimbursement practices. Is your company reimbursing its employees for their cell phone call and data usage? Read below for policy suggestions.
What does this mean for employers?
According to Cochran, California employers must indemnify employees 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.” Unfortunately, even four years after this case was decided, the exact measure of reimbursement is still somewhat unclear. While the court in Cochran determined that employers must consistently reimburse employees a “reasonable percentage,” it did not define what is reasonable. Furthermore, the employer must reimburse the employee even if the employee does not incur any additional expense on his or her cell phone/data plan as the result of using the device for work-related purposes (i.e. if the client has unlimited talk, text, and data plans).