California Labor Code 2802(a) requires an employer to indemnify an 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 statute essentially forces employers in California to reimburse employees for all work-related costs and expenses.
In Cochran v. Schwan’s Home Service, the Court addressed whether Labor Code 2802(a) required an employer to reimburse an employee for mandatory work-related calls made on the employee’s personal cell phone. The Court’s answer was a definite “yes.” According to the Court, for an employer to be in compliance with Labor Code 2802(a), if the employee is required to use his or her personal cell phone for work-related matters, then the employer is required to reimburse the employee a “reasonable percentage” of the employee’s personal cell phone bill.
This duty to reimburse applies even if the employee has an unlimited data plan and, thus, incurs no additional charges due to the work-related calls. In other words, it is irrelevant what arrangement the employee has with his or her cell phone company. It is also irrelevant if an employee has an arrangement with a family member or other third party to pay the employee’s cell phone bill. If work-related calls are required by the employer, then the employer must pay a “reasonable percentage” of the employee’s cell phone bill…period.
What constitutes a “reasonable percentage?” The Court gave no bright-line rule. Instead, the Court concluded that what constitutes a “reasonable percentage” will depend on the facts and circumstances of each particular case.
Bottom line: to comply with this new decision, employers who require employees to use their personal cell phones for work-related calls should immediately implement an appropriate reimbursement policy.
If you are interested in reading the full opinion in Cochran v. Schwan’s Home Service, you can find it here.