That is what the California Court of Appeal, Second Appellate District ruled recently in Cochran v. Schwan’s Home Service, Inc. And this month, the California Supreme Court upheld the appellate court decision in the case. The suit was filed by Colin Cochran on
behalf of 1,500 of the company’s “service managers,” who call customers as a regular part
of their work day and were not being reimbursed for those calls.
Rules for Cell Phone Reimbursement
The court ruled that cell phone reimbursement is required even if the employee incurs no additional expense for the calls under terms of his or her cell phone plan. “Otherwise,” the court said, “the employer would receive a windfall because it would be passing its operating expenses onto the employee.”
Unfortunately, the court did not provide any guidance on how to determine what “reasonable percentage” means.
What Should An Employer Do?
So what does the ruling mean for employers?
- If you don’t have a reimbursement policy, consider creating and implementing one. You may want to consult an attorney to devise a reimbursement policy that will stand up to legal challenge. Alternatives could include offering a set stipend, reimbursing per actual use, or taking responsibility for the entire bill.
- If you do have a policy, evaluate it to determine whether it needs to be modified. If it does need modification, you must determine whether it should be modified retroactively, or only from this point forward.
- If you don’t have BYOD (Bring Your Own Device) procedures and policies, consider creating them. Even if you don’t allow employees to use their personal phones for business, you need a policy that specifically says so.
- You may want to consider providing your employees with a cell phone plan. Otherwise you might get into muddy waters trying to determine how much of your employees’ bills you need to cover.
You should also be aware that this decision could have far-reaching implications. It could apply to other technologies, such as tablets, laptops and home computers. Even personal internet plans could be affected. You’ll want to tailor your policies accordingly.
If you have questions about how to implement a BYOD or reimbursement policy to minimize the risk of class action claims, call Johnson Employment Law for guidance. 949-238-8044