In today’s digital age, cell phones have become an indispensable tool for many employees, allowing them to stay connected and productive even while away from the office. However, the use of personal cell phones for work purposes can raise legal questions, particularly when it comes to reimbursement of expenses. Many employers are unaware that, in the State of California, they are required to reimburse employees for reasonable and necessary expenditures incurred in the discharge of their job duties, including cell phone costs.
The California Labor Code Section 2802 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.” This law applies to both exempt and non-exempt employees, and failure to comply can result in significant penalties and legal consequences for employers.
So, what constitutes a “reasonable and necessary” expense when it comes to cell phone usage? The answer depends on various factors, including the nature of the employee’s job, the extent to which the cell phone is used for work purposes, and the employer’s policies and expectations regarding cell phone use.
In general, if an employee is required to use their personal cell phone for work-related calls, emails, or other business purposes, the employer is obligated to reimburse a reasonable percentage of the employee’s cell phone bill. This reimbursement should cover the portion of the bill attributable to work-related usage, including minutes, data, and any additional fees or charges incurred as a result of work-related use.
Employers have some flexibility in determining how to calculate and implement the reimbursement. They can choose to provide a flat monthly allowance, reimburse based on actual usage, or offer company-provided cell phones or plans. However, it’s important to note that any reimbursement method must be reasonable and must cover the employee’s actual expenses incurred for work-related purposes.
To ensure compliance with California labor laws and avoid potential legal disputes, employers should establish clear policies and procedures for cell phone reimbursement. These policies should outline the types of expenses eligible for reimbursement, the documentation required, and the process for submitting and processing reimbursement requests.
Employers should also communicate these policies effectively to their employees and provide training or guidance on how to properly track and report work-related cell phone usage. By taking a proactive approach to cell phone reimbursement, employers can not only comply with legal requirements but also promote a positive and fair work environment for their employees.
In summary, reimbursing employees for work-related cell phone expenses is a legal obligation in California. Bayside Counsel helps employers carefully review and amend their policies and practices to ensure compliance with labor laws and to avoid potential penalties or legal disputes.
Do your policies and procedures need reviewing? Contact a San Diego small business attorney at Bayside Counsel today.