The coronavirus pandemic and the resulting stay-at-home order issued by Governor Newsom on March 19 means millions of Californians have been telecommuting during the lockdown, and may continue to do so for the foreseeable future. For many California workers, this means improvised home offices, frequent Zoom meetings, and an increased reliance on smart phones, data plans and internet access.
These work-from-home arrangements are often new to both the employee and the employer. With no telecommute policy in place prior to the pandemic, there may be some uncertainty as to what costs an employer is required to reimburse. And chief among the costs most likely to create uncertainty (and consequently to go unreimbursed) are the costs of smartphones and monthly data and internet plans.
Some employers may be tempted to think that because their employees typically already pay for smartphones, monthly data plans and internet access for their personal use, and, in some cases, don’t incur additional costs stemming from work-related use, then they’re off the hook for any reimbursement payment to defray those costs. However, California law is clear that if an employee is required to use personal equipment and/or data plans for work-related activities, and he or she is not reimbursed for that use, then the employer is in violation of California’s reimbursement laws.
California Labor Code Section 2802 requires that an employer reimburse an employee for “all necessary expenditures or losses” incurred by the employee that are directly tied to performing his or her work. The purpose of this statute is “to prevent employers from passing their operating expenses on to their employees.”
Courts have directly addressed the issue of whether an employer must reimburse an employee for the reasonable expense of the mandatory use of a personal cell phone, or whether the reimbursement obligation was limited to the situation in which the employee incurred an extra expense that he or she would not have otherwise incurred absent the job. In one case, the court stated that “reimbursement is always required. Otherwise, the employer would receive a windfall because it would be passing its operating expenses on to the employee.” Thus, to be in compliance with Section 2802, an employer must pay some reasonable percentage of the employee’s cell phone bill when the cell phone is required. Id.
In fact, it does not matter whether the employee has changed plans to accommodate work-related cell phone use. If an employee is required to use a personal cell phone to make work-related calls, the employer must reimburse the expense under Labor Code 2802.
While the expense reimbursement amounts for a pro rata share of smartphone, data plan, and internet access costs may be relatively small for individuals, the amounts at issue may become significant as the need to work from home stretches out over months, and more significant again if the reimbursement claims are brought on a class basis, or form the underlying basis for a Private Attorneys General Act representative action.
If you have questions or concerns regarding your employer’s reimbursement policies, please contact our attorneys who will listen to your concerns and explain your options. More information on general wage and hour laws is available here – Unpaid Wages, Overtime and Expenses
