A recent $5.4 million settlement of a California wage and hour class action (Marley Castro, et al. v. ABM Industries, Inc.) reminds employers of the far-reaching scope of California Labor Code section 2802’s business expense reimbursement requirement.
In this case, the plaintiffs alleged that the company had failed to reimburse all employees for the required use of their personal cell phones for business-related purposes. According to the plaintiffs, the company required all employees to use their personal cell phones to (1) clock in and out from work and (2) to communicate with their supervisors.
While this case was settled, it serves as an important reminder that California employers are required to reimburse their employees for business-related use of their personal cell phones. Specifically that California law requires that employers reimburse employees for “some reasonable percentage” of their cellphone bills if the employer requires them to use their personal cellphones for a business purpose – regardless of whether the employee incurs charges over and above what his or her plan costs.
Some common business-related uses for which employers may require employees use their personal cell phones include:
- Clocking in and out for work or meal periods;
- Checking or updating schedules via a scheduling app or otherwise requiring them to use data;
- Texting or calling a manager regarding scheduling or for other work-related purposes;
- Using data plans for GPS purposes;
- Requiring employees to use cellphones for purposes of responding to emergency calls or for on-call time periods;and
- Any other required use of a personal cellphone (text, call, or data) for business-related purposes.
It is recommended that all California employers review their current reimbursement policies and determine whether they are currently reimbursing employees for required business-related cell phone usage. If employees are required to use their cell phones for work, employers have the following options available to them:
- reimburse employees for actual cell phone fees incurred for business purposes;
- reimburse for a percentage of cell phone fees that accurately reflects the amount of mandatory business usage (and inform employees that if their business-related use exceeds that flat rate, a process employees should follow for reimbursement); or
- provide employees with a cellphone or another communication alternative for business use .