The California Supreme Court denied a petition for review of a lower court's ruling that employers must reimburse their employees who use their personal cell phones for work purposes, rendering the lower court's ruling the law of the land.
In Cochran v. Schwan's Home Service, Inc., the California Court of Appeal for the Second District ruled that employers must reimburse employees who use their personal cell phones for work purposes:
In Cochran v. Schwan's Home Service, Inc., the California Court of Appeal for the Second District ruled that employers must reimburse employees who use their personal cell phones for work purposes:
"We hold that when employees must use their personal cell phones for work-related calls, Labor Code section 28021 requires the employer to reimburse them. Whether the employees have cell phone plans with unlimited minutes or limited minutes, the reimbursement owed is a reasonable percentage of their cell phone bills."
California Labor Code section 2802(a) provides that “[a]n 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[.]” The purpose of section 2802 is “‘to prevent employers from passing their operating expenses on to their employees.’” Gattuso v. Harte-Hanks Shoppers, Inc. (2007) 42 Cal.4th 554, 562 (citations omitted). “In calculating the reimbursement amount due under section 2802, the employer may consider not only the actual expenses that the employee incurred, but also whether each of those expenses was ‘necessary,’ which in turn depends on the reasonableness of the employee’s choices.” Gattuso, 42 Cal.4th at 568 (citations omitted).
The Cochran court delineated the rule with respect to cell phone plans as follows:
The Cochran court delineated the rule with respect to cell phone plans as follows:
"Thus, to be in compliance with section 2802, the employer must pay some reasonable percentage of the employee’s cell phone bill. Because of the differences in cell phone plans and worked-related scenarios, the calculation of reimbursement must be left to the trial court and parties in each particular case."
San Diego employers should carefully assess whether their employees utilize their personal cell phones in carrying out their work duties. If so, employers are legally mandated to pay a reasonable percentage of the cell phone bill based on the particular circumstances of the cell phone plan and work usage.
