While there is some discretion the employer can exercise in determining the amount of reimbursement (such as actual expenses and the reasonableness of the employee’s choice:  i.e., was the employee “required” to use their own phone), the following language by the court shows the standard is still reasonable reimbursement (which means if the issue went to court a judge or jury would determine reasonableness, which means an employer should be careful in this area). Longer Answer with Practice Recommendations: An Employer Must Reimburse An Employee For The Employee’s Use Of A Personal Cell Phone For Work Related Duties. 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%). Employee has an incentive to use their personal cell phones for work-related use. A California Court of Appeal recently issued a short decision in Cochran v.Schwan’s Home Services, Inc., B247160 (Aug. 12, 2014) that took an expansive view of an employer’s obligation to reimburse employees for business expenses. No text or graphic contained in this entry is to be or should be used or relied upon as legal advice. Let’s take these three decisions in order. Otherwise, the employer would receive a windfall because it would be passing its operating expenses on to the employee. The average cell phone bill is now nearly $80, so you should aim for heavy usage rates lower than that. We do not necessarily advocate those approaches. 1. This feature is the first of its kind, and empowers consumers to make better decisions when it comes to wireless. However, what is not well understood (or developed in the law) is how much must be reimbursed. The beginning of 2019 brought substantial employment case settlements and verdicts. Copyright © Silvertrac Software. Makes it easier to plan and estimate costs. 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). 1 (888)-505-8722 ext.3Schedule DemoSupport. You'll know your employees have the proper tools to communicate and report when they're on the job. However, the court did not provide guidance as to what is meant by “reasonable percentage.” Does it mean 20 percent? The California Court of Appeal agreed there were violations and held (which means, it’s now the law): “We hold that when employees must use their personal cell phones for work-related calls, Labor Code section 2802 requires the employer to reimburse them. 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. You also have to worry about the damage careless employees have on the devices themselves. Under newly enacted section 9.5 of the Illinois Wage Payment and Collection Act (“Act”) (effective January 1, 2019), employers are obligated to reimburse employees for all necessary expenses incurred within the scope of their employment. Cochran v. Schwan's Home Serv., Inc., 228 Cal. In December 2018, the Internal Revenue Service issued the 2019 optional standard mileage rates. at p. 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. If you pay employees a greater amount than their entire monthly cell phone bill, it must be recorded as additional income for that individual. 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. Employers and employees frequently inquire about whether an employer must reimburse an employee when the employee uses their personal cell phone for the employer’s business? ), Per the Cochran court, “The purpose of this statute is “ ‘to prevent employers from passing their operating expenses on to their employees.’“ (Id. 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. 1. Distribute the policy to employees, and remember to inform new employees when they are hired. Guaranteed compliance with the law and the cost is relatively easy to compute. The time it takes to compute the reimbursement to each employee. This article provides employers with analysis and tips related to expense reimbursement of remote workers in California. Employers consider several factorswhendrafting these policies and determining stipend amounts.Here are just a few: 1. Steve’s security experience spans 16 years and started with very small local security companies to what is now the largest security company in the US, Allied Universal, where he managed a $50M security organization for Allied Universal and now brings that consulting expertise to Arthur McBeth and Associates which he co-founded with Carrie Parker. If you want specific legal advice about your particular legal issues, or if you want to create an attorney-client relationship, you need to retain the Law Offices of Ron A. Stormoen by a signed written retainer agreement. If a cell site location is near major metropolitan areas,then cell tower lease rates will clearly be higher due to the value of the site to the wireless carriers. The employer only pays for what they are "using". Amounts recovered pursuant to this section shall be paid to the affected employee. The answer is that reimbursement is always required. The cost of going this route could get extremely high. Reimbursement Refresher: Cell Phone and Internet Expenses Related to Telecommuting in the US By Michael E. Brewer , Caroline B. Burnett & Susan F. Eandi on June 1, 2020 Posted in Benefits & Compensation , California , Compliance , Coronavirus , Handbooks & Policies , US ... (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. Personal cell phone use for any work-related calls is no different than unauthorized overtime. Differences in reimbursement can be justified based on position (and amount of usage). The site receives a flat reimbursement rate, outside of any other reimbursement arrangements such as inpatient DRGs or RHC per-visit payments. Or do you want to provide company phones? cell phone reimbursement. In other words, the employee isn't making money by using their phone. 1.1. The new year brings new employee reimbursement obligations for Illinois employers. You are also entitled to reimbursement of cell phone expenses if your employer requires you to use a particular “app” or function on the phone. The tax regulations of cell phone reimbursement boil down to three questions the company must answer: 1. This section reads, ... then the employee’s use of her cell phone is likely unnecessary—and not reimbursable—under Section 2802. 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. San Diego, CA, 92108 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”. Again, the key is that employees are reimbursed a “reasonable percentage” of their phone bill. 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. You can edit the text in this area, and change where the contact form on the right submits to, by entering edit mode using the modes on the bottom right. 1144.). heat illness awareness, meal and rest breaks, overtime, and others will appear to make our business lives just a little more exciting! But work usage may vary depending on the position. When employees must use their personal cell phones for work-related calls, Labor Code section 2802 requires the employer to reimburse them. In the Cochran  case mentioned above, the court of appeals held that employers must reimburse a “reasonable percentage” of their employees’ cell phone bills. Expense reimbursement: In a typical reimbursement policy, employees purchase a cell phone (from a list of company-approved devices) along with the service plan. As you can guess, the cell phone usage is only the tip of the iceberg, because it can easily be extended for laptop computers, tablets, Internet charges, etc. Case law since Cochran has reinforced the rule that an employer must reimburse a “reasonable” amount without actually explaining how to calculate that amount. More? Under California Labor Code Section 2802 and court decisions in Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal.4th 554 (2007) and Cochran v. • 3G/4G LTE coverage in California is provided by AT&T, Sprint, T-Mobile, Verizon Wireless. The Cochran court determined that Labor Code section 2802 included an employer’s obligation to reimburse an employee whenever the employee uses his/her cell phone for work related duties. Under these policies, many employers are paying anywhere from $30 to $50 per month toward employee cell phone bills. The latest litigation trends, court decisions, & issues on California Employment Law. Another approach is to purchase company cell phones for employees. Below is a list of state & local taxes and fees on monthly cell phone service. Less administrative support and response to employee if the fixed amount is exceeded. This entry does not create an attorney-client relationship. Want to learn more about Steve and his work with Arthur McBeth & Associates? By Kim Gale June 4, 2019 . • Originating sites are to use HCPCS code Q3014 when su bmitting facility fee claims. Personal Cell Phone and Expense Reimbursement Policy – CALIFORNIA and ILLINOIS January 1, 2019 . It is irrelevant whether the employee changed plans to accommodate work-related cell phone usage. Cell site locations near populations is a good sign that landlords can command more lease rental revenue than more remote areas. 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. which can also be the subject of employee compensation. We highly recommend you check with your labor and employee relations attorney as there may be other parts of the case to be considered. In sum, employers must reimburse California employees (without distinction) for cell phone use when employees are required to use their personal cell phones for business purposes. The employee must maintain the type of cell phone coverage that is reasonably related to the needs of the employer’s business, and the reimbursement must be reasonably calculated so as not to exceed expenses the employee actually incurred in maintaining the cell phone. The federal tax rate on wireless service (called the USF, or Universal Service Fund) is 6.64%. Interest shall accrue from the date on which the employee incurred the necessary expenditure or loss. Is reimbursement right for your business? It does not matter whether the phone bill is paid for by a third person, or at all. 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. N… 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. 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. This entry does not give specific legal advice about your specific legal problem. Cellular coverage found on 4 networks • 5G coverage in California is provided by AT&T, T-Mobile, Verizon Wireless. 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. The Reimbursement Amount Is A Reasonable Percentage Of The Employee’s Phone Bill, Employers Must Reimburse Employees For Work Related Cell Phone Use. 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. ... you are entitled to reimbursement for cell phone use under California law. In fact, it may be worse because it applies to all California employees, exempt and non-exempt. All you have to do is punch in your address and we do the rest. Reimbursement is required even if the employee does not actually incur extra expenses as a result of his or her use. 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. California Law Addresses Employee Business Expense Reimbursement. 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. Some say the safest approach is to pay the entire cost of an employee’s phone. Obviously the most accurate way to track and pay work-related cell phone usage costs. Moreover, the employee has a relatively easy burden to successfully make a liability claim against his/her employer on this issue. Mobile management overhead 3. 1144-1145.). 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! 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. By D. Andrew Quigley & Roland M. Juarez on July 29, 2019. Representation in business, real estate, construction, home care, trust and probate litigation and general civil litigation. This means that an employee can recover the costs associated with the business use of their personal cell phone, internet, and car. 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 75 percent? This Policy applies to all ABM team members who work in the States of California and Illinois. Yes. So, how does an employer reduce or eliminate the risk of not knowingly violating the law? 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. Guaranteed compliance with the law and better protection of Company’s intellectual property, which are put at risk by “Personal Owned Phones” policies. 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. 1011 Camino Del Rio S, Suite 531 1144.). 1144.). 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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