In Cochran v. Schwan’s Home Service, Inc., the California appellate court recently held that employers are always required to reimburse employees for mandatory use of their personal cell phones, even if they do not incur any additional expense for doing so. 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.
Therefore, under this new holding, employers now face liability for failure to reimburse employees for a “reasonable percentage” of their personal cell phone bills if they need to use them for work. The court did not provide any guidance as to what a “reasonable percentage” means.
Based on this holding, employers are encouraged to review their cell phone policies to assess this emerging issue. Employers should consider providing their employees with cell phones and voice/texting plans. Alternatively, employers should consider implementing written policies requiring their employees to track and submit expense reports regarding their work-related cell phone usage so that employees can be reimbursed for the actual cost of such usage. If the actual cost cannot be determined (i.e. employee already has an unlimited minutes/texting personal plan), then the employer will be required to reimburse the employee for a “reasonable percentage” of the personal cell phone bill. Another option that employers may consider is to make clear that cell phones are not needed and should not be used for work.