There was a time when a work day ended at 5:00. When the little hand reached 5 and the big hand found its way to 12 two things happened – workers headed home and bosses stopped paying their hourly employees. How times have changed. In the age of smart phones and constant e-mail connection a new issue arises – if an hourly employee is performing work from their personal phone does an employer have to chip in on the bill?
A large number of small businesses in California do not have any sort of employee cell phone policy in place and are unaware that they may be required to reimburse their employees for at least a portion of their personal cell phone bills. As illustrated below, this is quickly becoming yet another issue California small business owners need to start thinking about.
In the recent decision¹, a California Court of Appeal held that when an employee uses their personal cell phone for work-related calls, Labor Code section 2802 requires the employer to reimburse them. In reaching this conclusion, the Court of Appeal found that certain provisions of the Labor Code required reimbursement by employers for “all necessary expenditures or losses incurred by the employee in direct consequence” of their work, or in “obedience to the directions of the employer.” This would be true despite the fact an employee is paying for an unlimited data package. The Court held that despite the form of cell phone plan the employee selected or is paying for on their own, employers must pay some reasonable percentage of the employee’s cell phone bills – if not they would be receiving a windfall because it would pass on this business expense directly to the employee.
While the dust has yet to settle on the Cochran decision it appears that employers in California are required to compensate employees who use their personal phones for work purposes. This is true even if they have unlimited data/minutes.
This decision creates the potential for new areas of litigation. In an effort to avoid this, businesses should take a close look at their cell phone polices to ensure they are in compliance with the Labor Code (or, if you do not have a cell phone policy, prepare one!). If an employee is expected to be accessible by phone or email outside of work – or if they are required to carry a cell phone as a part of the job – then it is necessary either to provide a work device or to pay a reasonable percentage of their bill.
¹Cochran v. Schwan’s Home Serv., Inc., 228 Cal. App. 4th 1137