Do you have employees (even executives or managers or sales staff) who use personal cell phones for company business? If so – California may have a costly surprise for you!

23 Aug

Hopefully you know that under California law, employers must reimburse employees for “all necessary expenses incurred by the employee in direct consequence of the discharge of his or her duties…” (California Labor Code Section 2802).

A California Court of Appeals has just ruled that an employer must reimburse an employee if that employee is required to use a personal cell phone to make or accept work related calls, even if the employee did not incur an extra expense because of the unlimited data plan in use (or even if the employee did not pay anything for the cell phone because someone else paid for the phone.)

The employee does not have to prove he incurred expenses over and above what he would have incurred absent his use of the phone on the job, nor does he have to prove he even paid his cell phone bill. The Court ruled that if the rule was otherwise, the employer would receive a windfall by being able to pass on some of its operating expenses to employees. The court ruled, “The employer must pay some reasonable percentage of the employee’s cell phone bill” if the employee uses a personal cell phone for work purposes.

This is a most surprising development because, Samsung recently found: among companies with Bring Your Own Devices (BYOD) policies, 28 percent of the companies paid nothing for employee phones and plans. Samsung found that 39 percent of the companies formally paid for mobile costs or reimbursed them. Thirty-one percent informally either reimbursed or paid for mobile phone and services. And of course, the principle doesn’t stop at cell phones, it can apply to home computer and internet costs if the employee access the internet for work purposes, and on and on and on.

This ruling applies to salaried or “exempt” employees just as it does to hourly or “non-exempt” employees.

Some important things to think about right now:
1. This is only a Court of Appeals decision and the case could ultimately be appealed to the California Supreme Court, so this ruling might change.
2. The court did not define what a “reasonable percentage” of phone costs are, even though it ruled that “reimbursement is always required”. You have some choices in setting your company’s policies regarding cell phones.
• You might want to survey your employees to determine what use they actually make of personal cell phone, smart phones, other mobile devices. Use the results of such survey to plan an appropriate policy for your firm.
• You could furnish cell phones and prohibit use of personal cell phones
• You could prohibit use of personal cell phones
• You could write a policy specifying when, where and how personal cell phones can be used to control costs, promote safety and other important company policies.

The team of Don Dressler Consulting is keeping up on the legal developments on this issue, and here to assist and advise you on compliance with this and other important human resources and safety matters. Just call or email us. Visit our websites: and

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