Distribute the policy to employees, and remember to inform new employees when they are hired. Mobile management overhead 3. which can also be the subject of employee compensation. Employers consider several factorswhendrafting these policies and determining stipend amounts.Here are just a few: 1. by Jennifer Azara. who were not reimbursed for expenses pertaining to the work-related use of their personal cell phones, alleging labor code violations and unfair business practices, and seeking declaratory relief and statutory penalties. 1144.). 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. Damages, of course, raise issues that are more complicated.“ (Id. You also have to worry about the damage careless employees have on the devices themselves. 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. However, the court did not provide guidance as to what is meant by “reasonable percentage.” Does it mean 20 percent? 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. Averaging is probably the most accurate method to calculate the “reasonable percentage" an employer is expected to pay. 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. App. The Reimbursement Amount Is A Reasonable Percentage Of The Employee’s Phone Bill. 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? 1144-1145.). If the employer owns the phone and maintains appropriate policies, it will go a long way toward enforcing and monitoring cell phone usage. 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. 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 feature is the first of its kind, and empowers consumers to make better decisions when it comes to wireless. 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. Personal cell phone use for any work-related calls is no different than unauthorized overtime. January 2019, the payment amount is “80% of the lesser of the actual charge or $26.15”. If you decide to reimburse employees for their cell phone use, should you do so under an accountable or non-accountable plan? Yes. Finding a spot to store the device on post can also be a challenge. We highly recommend you check with your labor and employee relations attorney as there may be other parts of the case to be considered. This article provides employers with analysis and tips related to expense reimbursement of remote workers in California. 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 Personal Cell Phone and Expense Reimbursement Policy – CALIFORNIA and ILLINOIS January 1, 2019 . Further details on what they are: Stipends are often given out monthly. The $5.4M cell phone reimbursement mistake this company made. Getting the Best Plan & Coverage. 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. 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). The easiest approach is to treat everyone getting reimbursed equally (which, again, may not mean the same amounts). These rates calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. 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. San Diego, CA, 92108 Otherwise, the Court reasoned “the employer would receive a windfall because it would be passing its operating expenses onto the employee.”  In these types of cases the employer must pay “some reasonable percentage of the employee’s cell phone bill.”. In December 2018, the Internal Revenue Service issued the 2019 optional standard mileage rates. A "necessary” expense is defined in section 9.5 as all reasonable expenses that: (a) are required by the employer in the discharge of the employees’ duties; and (b) are primarily for the benefit … 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. Or do you want to provide company phones? Having no protection of company’s intellectual property. The latest litigation trends, court decisions, & issues on California Employment Law. 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! 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. 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. YouTube Spotify RSS Twitter LinkedIn Facebook Instagram VISIT OUR WEBSITE. An Employer’s Duty to Reimburse. Yes, reimbursement is alwaysrequired. • Originating sites are to use HCPCS code Q3014 when su bmitting facility fee claims. When employees must use their personal cell phones for work-related calls, Labor Code section 2802 requires the employer to reimburse them. 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? 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. 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%). Cellular coverage found on 4 networks • 5G coverage in California is provided by AT&T, T-Mobile, Verizon Wireless. 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!) Opens the door for discrepancy between the employer and employees definition of "some reasonable percentage". 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. You'll know your employees have the proper tools to communicate and report when they're on the job. ... (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. 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. App. California law requires that employers reimburse employees for “some reasonable percentage” of their cellphone bills if the employer requires them to use their personal cellphones for a business purpose – regardless of whether the employee incurs charges over and above what his or her plan costs. 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. Representation in business, real estate, construction, home care, trust and probate litigation and general civil litigation. 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). 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. Less administrative support and response to employee if the fixed amount is exceeded. Is reimbursement right for your business? 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 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. 1011 Camino Del Rio S, Suite 531 Administration costs increase and not practical when employees use unlimited plans. 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. Under California Labor Code Section 2802 and court decisions in Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal.4th 554 (2007) and Cochran v. 1 (888)-505-8722 ext.3Schedule DemoSupport. at pp. An explosion in the smartphone market over the past 3-5 years has been both a blessing and a curse for the security industry. All Rights Reserved. What the Courts Say About Reimbursement of Cell Phone Expenses. But requiring an officer to bring their own device to work also presents several issues both logistically and legally. Reimbursement is required even if the employee does not actually incur extra expenses as a result of his or her use. All you have to do is punch in your address and we do the rest. On one hand, having a smartphone with a mobile security guard app in every officer's pocket presents the opportunity for better communication, increased transparency, and reduced costs. Employee has an incentive to use their personal cell phones for work-related use. 1144.). 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. 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. But work usage may vary depending on the position. That being said, in California, we have many other issues to be aware of, i.e. Regardless, employers need to prepare for the worst. Interest shall accrue from the date on which the employee incurred the necessary expenditure or loss. This figure varies depending on the company and the agreed-upon policy. 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. 1144.). These payments are referred to as mobile stipends. 1. 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. 4th 1137, 1140. 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. So, how does an employer reduce or eliminate the risk of not knowingly violating the law? 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. It's not uncommon to see company phones damaged, abused, or stolen. 4th 1137, 1140. 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. The tax regulations of cell phone reimbursement boil down to three questions the company must answer: 1. Again, the key is that employees are reimbursed a “reasonable percentage” of their phone bill. How much should you reimburse each employee? All Rights Reserved. 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. United States. at p. 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. Differences in reimbursement can be justified based on position (and amount of usage). In the Cochran  case mentioned above, the court of appeals held that employers must reimburse a “reasonable percentage” of their employees’ cell phone bills. ABM does not require any ABM team member to use their personal cell phone for any work -related purposes or to The answer is that reimbursement is always required. Cell site locations near populations is a good sign that landlords can command more lease rental revenue than more remote areas. The new year brings new employee reimbursement obligations for Illinois employers. Thus, to be in compliance with section 2802, the employer must pay some reasonable percentage of the employee's cell phone bill. The beginning of 2019 brought substantial employment case settlements and verdicts. 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. Amounts recovered pursuant to this section shall be paid to the affected employee. The site receives a flat reimbursement rate, outside of any other reimbursement arrangements such as inpatient DRGs or RHC per-visit payments. 1.1. (c)    For purposes of this section, the term “necessary expenditures or losses” shall include all reasonable costs, including, but not limited to, attorney’s fees incurred by the employee enforcing the rights granted by this section. By D. Andrew Quigley & Roland M. Juarez on July 29, 2019. More? ... you are entitled to reimbursement for cell phone use under California law. This Policy applies to all ABM team members who work in the States of California and Illinois. Copyright © Silvertrac Software. 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%). This section reads, ... then the employee’s use of her cell phone is likely unnecessary—and not reimbursable—under Section 2802. Below is a list of state & local taxes and fees on monthly cell phone service. heat illness awareness, meal and rest breaks, overtime, and others will appear to make our business lives just a little more exciting! Guaranteed compliance with the law and the cost is relatively easy to compute. 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. Under these policies, many employers are paying anywhere from $30 to $50 per month toward employee cell phone bills. California Employment Law Report. Labor Code section 2802, referenced by the court, governs this area [concerning reimbursement for all necessary employee expenditures or losses, not just cell phone use) and provides the backdrop for the court’s opinion: (a)    An employer shall indemnify his or her 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, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful. Book a hotel in California Per-diems for other cities in California: If you are traveling to a city in California that does not have a specific per diem rate the standard per-diem rates of $94.00 per night for lodging and $55.00 per day for meals and incidentals apply. No text or graphic contained in this entry is to be or should be used or relied upon as legal advice. at p. Subscribe to cell phone reimbursement. 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).