Also, the court noted that even though some employees have plans which do not result in any additional cost for work use, the employer is still required to reimburse: “The threshold question in this case is this: Does an employer always have to reimburse an employee for the reasonable expense of the mandatory use of a personal cell phone, or is the reimbursement obligation limited to the situation in which the employee incurred an extra expense that he or she would not have otherwise incurred absent the job? Mobile management overhead 3. For more on the new employment laws in general, see our article “Changes to Illinois Employment Laws for 2019” How to be Reimbursed for your Cell Phone. A Program of the California Public Utilities Commission © 2006-2019, State of California. Also, the details of the employee's cell phone plan do not factor into the liability analysis. But how do you calculate “an undefined reasonable percentage?” Unfortunately, the Court didn’t answer the question, but said, “because of the differences in cell phone plans and work related scenarios, the calculation of reimbursement must be left to the trial court and parties in each particular case”. Personal cell phones at work: Five lessons employers should take away about expense reimbursement Published on March 6, 2015 March 6, 2015 • 33 Likes • 2 Comments In other words, it is no concern to the employer that the employee may pass on the expense to a family member or friend, or to a carrier that has to then write off a loss. Cellular coverage found on 4 networks • 5G coverage in California is provided by AT&T, T-Mobile, Verizon Wireless. (d) In addition to recovery of penalties under this section in a court action or proceedings pursuant to Section 98, the commissioner may issue a citation against an employer or other person acting on behalf of the employer who violates reimbursement obligations for an amount determined to be due to an employee under this section. ... (FLSA) does not require employers to reimburse employees for cell phone use, but California law does require cell phone reimbursement per the California Labor Code Section 2802. That being said, in California, we have many other issues to be aware of, i.e. The California Court of Appeal in Cochran v. Schwan’s Home Services, Inc., 228 Cal.App.4th 1137 (2014), resuscitated a putative class action lawsuit filed on behalf of 1,500 customer service managers who were not reimbursed for expenses incurred as a result of work-related use on their personal cell phones. This is so even if the employee incurs no additional expense due to the work-related calls, such as if the calls are within the employee’s plan for unlimited minutes or the cell phone bill is paid by someone, other than the employee! The procedures for issuing, contesting, and enforcing judgments for citations or civil penalties issued by the commissioner shall be the same as those set forth in Section 1197.1. You also have to worry about the damage careless employees have on the devices themselves. 1 (888)-505-8722 ext.3Schedule DemoSupport. Effective January 1, 2019, the Illinois Wage Payment and Collection Act requires employers to reimburse employees for all necessary expenditures or losses incurred within the employee’s scope of employment and directly related to services performed for the employer. It's not uncommon to see company phones damaged, abused, or stolen. The general reimbursement statute of the California Labor Code is Section 2802. 1144.). The State of California has led the way in defining what employers are required to do when asking officers to bring their personal phones to work. These things can be handled on a case by case basis, but it could be the next arrow in the class-action quiver. How much should you reimburse each employee? The company then reimburses the initial cost of the cell phone and the service plan fees each month on receiving the associated receipts. In fact, it may be worse because it applies to all California employees, exempt and non-exempt. Getting the Best Plan & Coverage. at p. By Kim Gale June 4, 2019 . The tax regulations of cell phone reimbursement boil down to three questions the company must answer: 1. What the Courts Say About Reimbursement of Cell Phone Expenses. Case law since Cochran has reinforced the rule that an employer must reimburse a “reasonable” amount without actually explaining how to calculate that amount. The site receives a flat reimbursement rate, outside of any other reimbursement arrangements such as inpatient DRGs or RHC per-visit payments. Let’s take these three decisions in order. Put this policy in writing and expressly state that employees may submit expense reimbursement requests each month to the extent that the flat rate does not cover the total expenses for the usage that month. In other words, the employee isn't making money by using their phone. The law allows employees to sue their employer for reimbursement of the business use of their personal cell phone, internet, or even vehicle. But requiring an officer to bring their own device to work also presents several issues both logistically and legally. When employees must use their personal cell phones for work-related calls, then they are incurring an expense. But work usage may vary depending on the position. 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. E.g., One employee whose job depends on the phone, may be reimbursed 100%; in office staff, on the other hand, with less frequent use could get a stipend of $25 (or $50 or $100) or a lower percentage than others (e.g., 10%). Representation in business, real estate, construction, home care, trust and probate litigation and general civil litigation. Again, the key is that employees are reimbursed a “reasonable percentage” of their phone bill. which can also be the subject of employee compensation. The Reimbursement Amount Is A Reasonable Percentage Of The Employee’s Phone Bill. We highly recommend you check with your labor and employee relations attorney as there may be other parts of the case to be considered. San Diego, CA, 92108 An Employer’s Duty to Reimburse. PERSONAL CELL PHONE USAGE . Personal cell phone use for any work-related calls is no different than unauthorized overtime. In a 2014 case, an employee in California brought a lawsuit against his employer on behalf of customer service managers (essentially a class action on this issue!) Visit ArthurMcBeth.com or call (805) 823-535. hbspt.cta._relativeUrls=true;hbspt.cta.load(462069, '7633b880-db7e-48a8-9d3a-bd45b312b7db', {}); Find out how our solutions will increase your team’s efficiency and make your job easier. Yes. A cell phone reimbursement stipend, or a cell phone allowance, is a sum of money given to employees for them to purchase on their cell phone plans. Per the Cochran court: “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. N… Regardless, employers need to prepare for the worst. Want to learn more about Steve and his work with Arthur McBeth & Associates? 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.” (Cochran v. Schwan's Home Services, Inc. (2014) 228 Cal. App. We think a more palatable and reasonable approach is for the employer to pay a flat monthly stipend (e.g., $10 - $100 or some estimated percentage like 10-50%: the reimbursement number is a business decision based on history of usage). Even if they don’t “grumble,” all employees using their personal phones for work must be reimbursed (that should be the first biggest and clearest takeaway from this article; the second, and less clear takeaway, is the amount of reimbursement, but hopefully we have given you some tools to create a policy). All of which could theoretically be the subject of compensation under the Cochran case. However, the court did not provide guidance as to what is meant by “reasonable percentage.” Does it mean 20 percent? Author: jsimpelo Created Date: 07/11/2016 11:15:00 Title: Sample Policy - Company Cell Phone or Reimbursement for Personal Cell Phone Use - (4/2016) (00374715.DOCX;1) • Originating sites are to use HCPCS code Q3014 when su bmitting facility fee claims. The answer is that reimbursement is always required. California Employment Law Report. The beginning of 2019 brought substantial employment case settlements and verdicts. Cochran v. Schwan's Home Serv., Inc., 228 Cal. Having no protection of company’s intellectual property. The Cochran case provides guidance on how to calculate a reasonable reimbursement for the mandatory use of personal devices such as cell phones: employers must compensate their employees for a "reasonable percentage" of the employee's cell phone bill under Section 2802. The time it takes to compute the reimbursement to each employee. It is irrelevant whether the employee changed plans to accommodate work-related cell phone usage. The latest litigation trends, court decisions, & issues on California Employment Law. No text or graphic contained in this entry is to be or should be used or relied upon as legal advice. The federal tax rate on wireless service (called the USF, or Universal Service Fund) is 6.64%. heat illness awareness, meal and rest breaks, overtime, and others will appear to make our business lives just a little more exciting! However, what is not well understood (or developed in the law) is how much must be reimbursed. Subscribe to cell phone reimbursement. If an employee in California uses a personal cell phone for business-related use (i.e., “in direct consequence of the discharge of his or her duties or his or her obedience to the directions of the employer,”), a California employer must reimburse the employee, even if the employer prohibits the employee from using his or her personal cell phone for business use. Because of the differences in cell phone plans and work-related scenarios, the calculation of reimbursement must be left to the trial court and parties in each particular case.“ (Id. California Law Addresses Employee Business Expense Reimbursement. United States. This entry does not give specific legal advice about your specific legal problem. The cost of going this route could get extremely high. by Jennifer Azara. In December 2018, the Internal Revenue Service issued the 2019 optional standard mileage rates. If the employer owns the phone and maintains appropriate policies, it will go a long way toward enforcing and monitoring cell phone usage. It does not matter whether the phone bill is paid for by a third person, or at all. WhistleOut's new coverage check feature supercharges an already robust comparison engine by allowing you to instantly see what coverage is like at your location. 4th 1137 (2014). Differences in reimbursement can be justified based on position (and amount of usage). An explosion in the smartphone market over the past 3-5 years has been both a blessing and a curse for the security industry. The employer only pays for what they are "using". Until more guidance is provided from the courts or a government agency, the employer should carefully monitor its practice and make sure it has a policy of “reasonable” reimbursement and fully address any employees grumbling about fair reimbursement. Yes, reimbursement is alwaysrequired. Under these policies, many employers are paying anywhere from $30 to $50 per month toward employee cell phone bills. Is reimbursement right for your business? This article provides employers with analysis and tips related to expense reimbursement of remote workers in California. By D. Andrew Quigley & Roland M. Juarez on July 29, 2019. Administration costs increase and not practical when employees use unlimited plans. 1011 Camino Del Rio S, Suite 531 Guaranteed compliance with the law and better protection of Company’s intellectual property, which are put at risk by “Personal Owned Phones” policies. Reimbursement is required even if the employee does not actually incur extra expenses as a result of his or her use. Not only does our interpretation prevent employers from passing on operating expenses, it also prevents them from digging into the private lives of their employees to unearth how they handle their finances vis-à-vis family, friends and creditors. cell phone reimbursement. Let's consider the pros and cons of the options at hand: This would require employees to submit any proof that the proportion of work to non-work calls exceeds this fixed amount. Update: On November 25, 2014, the California Supreme Court denied a petition for review and denied a request to depublish the appellate court case. Otherwise, the employer would receive a windfall because it would be passing its operating expenses on to the employee. • 3G/4G LTE coverage in California is provided by AT&T, Sprint, T-Mobile, Verizon Wireless. You can add the federal tax rate of 6.64% to the tax rate of your state to find out what percentage you are paying in taxes. 1.1. App. January 2019, the payment amount is “80% of the lesser of the actual charge or $26.15”. ... you are entitled to reimbursement for cell phone use under California law. Obviously the most accurate way to track and pay work-related cell phone usage costs. 1. BYOD, or bring your own device, policies are becoming more common in work environments. The Cochran court did note that the employer can engage in some calculations: “In calculating the reimbursement amount due under section 2802, the employer may consider not only the actual expenses that the employee incurred, but also whether each of those expenses was ‘necessary,’ which in turn depends on the reasonableness of the employee's choices.“ (Id. This figure varies depending on the company and the agreed-upon policy. While these standards don't apply in every state or country, employers should be aware of the standards currently being enforced in California, because history tells us that most U.S. states that favor the employee will be following suit. App. When developing and implementing a policy, employees need to be treated equally in that they all need to be reimbursed for work related phone use. 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