worker on phone

Many employees regularly use their personal cell phones for work-related calls. Most probably don’t realize that when they do, part of their cell phone costs may become reimbursable—even if they have plans with unlimited minutes.

California’s Labor Code Section 2802(a) states that:

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.

An employer who fails to reimburse an employee for work expenses can be sued in court for reimbursement and may be required to pay the employee’s attorneys’ fees.

Recently, a California court of appeal applied Section 2802 to work-related cell phone use. In Cochran v. Schwan’s Home Service, 228 Cal. App. 4th 1137 (2014), employee Colin Cochran filed a putative class action lawsuit on behalf of customer service managers who were not reimbursed for expenses relating to the work-related use of their personal cell phones. The trial court denied Cochran’s motion to certify the class and Cochran appealed.

The Court of Appeal determined that the class should have been certified. It stated:

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? The answer is that reimbursement is always required. Otherwise, the employer would receive a windfall because it would be passing its operating expenses onto the employee. Thus, to be in compliance with section 2802, the employer must pay some reasonable percentage of the employee’s cell phone bill.

The court of appeal explained that if an employee is required to make work-related calls on a personal cell phone, then he or she is incurring an expense for purposes of Labor Code Section 2802. It does not matter whether the bill is paid for by the employee, a third person, or at all. Nor is it relevant whether the employee needed to change their phone plan to account for the increase in work-related usage. Thus, the only issue is whether the employee was required to use their personal cell phone for work, and whether he or she was reimbursed.

Using Your Cell Phone for Work Calls? You Are Entitled to Reimbursement was last modified: January 25th, 2015 by Ramit Mizrahi
2 Comments
  • Posted by Jpf September 26, 2014 at 3:46 pm

    What if it's not explicitly stated in a contract but ends up being part of the workflow (everyone does It at work so it's an assumed thing--influenced by culture of the job).

    Reply
    • Posted by Ramit Mizrahi In reply to Jpf November 5, 2014 at 2:44 pm

      The expense does not need to be contractually agreed upon. If an employee incurs an expense necessary to carry out their job (for example, spending money on gas while delivering something for their employer), the employer is required to reimburse the employee.

      Reply

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