focused young woman with laptop and smartphone in modern apartment

California Employers and reimburse cell phone expenses and the era of COVID-19

California, a state known to be “employee friendly”, has a statute in its labor code that has been interpreted by courts in a way that has helped employees in unexpected ways.

Pursuant to section 2802 of the California Labor Code employers are required to reimburse their employees for any “necessary expenditures or losses” that they incur as a direct result of doing their employment.

In a 2014 California case Cochran v. Schwan’s Home Serv., Inc., the Second District Court of Appeal reversed an order denying class certification and held, “If an employee is required to make work-related calls on a personal cell phone, then he or she is incurring an expense for purposes of section 2802.” Further, the court set the standard of determining whether personal cell phone use should be compensated by the employer by stating, “To show liability under section 2802, an employee need only show that he or she was required to use a personal cell phone to make work-related calls, and he or she was not reimbursed.” Id. This case is a great start in understanding the work-life of the modern-day employee.

Today many employees can perform their work duties in the palm of their hands. Employers must consider compensating employees for the work that they conduct in this manner. For example, emails alone can be read and responded to on the go because smart phones have made it much easier to read and reply to emails instead of employees waiting to get to their computers to do so.

The Cochran case was decided pre COVID-19, but is more relevant now when so many of us in the country have been forced to work from home. After nation and state-wide shelter in place orders in response to COVID-19, many employers adapted to the orders and found that their companies could still successfully operate by conducting remote work. Although, remote work came with cost and expenses that many people did not consider such as, higher internet and data plans, higher phone bills, and phone upgrades.

Surges of internet use have caused citizens to invest in new data plans and higher internet speeds. Especially for families who have children and spouses who all share the same Wi-Fi for their daily activities. In short, cellphone and internet expenses have surged as a result of adapting to work from home.

California Labor Code and the Cochran case present a question to the employers and states all of over the country, about whether they should be paying their employees for work related expenses when using their personal cell phones to carry out work related duties. Employers alternatively could issue company cell phones, but the cost may be more significant to purchase cellphones for each employee rather than just paying them for the expenses they occurred on their own personal phone.

Bottom line is employees need to evaluate their remote work arrangements. Many employers may need to adopt new or revised expense reimbursement policies. It’s worth the attention of employers across the nation to consider the lasting changes COVID-19 may have on employment law. California may have possibly set a new standard for employee reimbursement policies in the near future.

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If you think you or a loved one may have an employee reimbursement claim please contact our firm today.

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