Date: Aug 19, 2014
Employers May Be Required to Reimburse Employees for Some Personal Cell Phone Co

Last week, the California Court of Appeal ruled that an employer must reimburse an employee for the reasonable expense of the mandatory use of a personal cell phone. California employers are already required to reimburse employees for necessary expenses incurred by the employees in carrying out their job duties (Labor Code sec. 2802).  The Court of Appeal concluded in Cochran v. Schwan’s Home Service, Inc. that "[i]f an employee is required to make work-related calls on a personal cell phone, then he or she is incurring an expense for the purposes of section 2802."

In Cochran, the employer defended liability and class action status on the basis that many cell phone plans have unlimited minutes so the employee is not actually “incurring an expense” when making a call on such a plan.  Also, the employer argued that it should not be held responsible on those occasions where someone else pays the employee’s cell phone bill.  The court disagreed, saying "[t]he details of the employee’s cell phone plan do not factor into the liability analysis."  Rather, if the employee can show that he or she was required to use a personal cell phone and was not reimbursed, the employer may be held liable.

As a result of this case, employers that require employees to use a cell phone for work-related calls must now provide a company-owned cell phone or reimburse employees for “some reasonable percentage” of their personal cell phone use. Unfortunately, the court did not define what constitutes a “reasonable percentage” leaving it to the employer to figure out. Employers who do not need employees to use their personal cell phones should consider adopting a policy prohibiting the use of personal cell phones for work-related calls.

WG Staff Contact

Jason Resnick
Sr. Vice President & General Counsel

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