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Employee Reimbursement When Using Personal Cell Phone For Work

Posted by Eric Kingsley | Jan 10, 2024 | 0 Comments

In the state of California, employers are legally obligated under Labor Code 2802 to reimburse their employees for any reasonable expenses incurred while performing their job duties. This includes reimbursement for the use of personal cell phones if it is necessary for business purposes. 

The reimbursement should be a fair percentage of the actual cost of the employee's cell phone bill. Even if an employee's job does not require them to exceed their usual cell phone usage, they are still entitled to receive partial payment for these expenses. 

The intention behind this law is to prevent companies from shifting their business costs onto their employees and ensuring that workers are not financially burdened by work-related expenses.

Table of Contents:

Legal Requirements for Cell Phone Reimbursement in California

If you're working in California and using your personal cell for customer calls or managing your team remotely, listen up. The Golden State has some strict rules about employers reimbursing their staff for work-related personal cell use.

The Scope of Section 2802: So, what's the deal? Well, the California labor code requires employers to cover costs that employees incur while doing their jobs—this includes those minutes and data used on personal phones. It's not just a friendly gesture; it's mandated by law. This means if you're chatting with clients or emailing your boss from your mobile device, these expenses shouldn't be coming out of your pocket.

Preventing Unfair Expense Burden: But why all this fuss over phone bills? It boils down to fairness—the state doesn't think it's right for companies to pass operating expenses onto their workforce. Imagine having to pay extra every month just because you took work calls during dinner time—that wouldn't sit well with anyone.

California Labor Code Section 2802

Pursuant to section 2802, subdivision (a), “[a]n 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[.]” The purpose of this statute is “‘to prevent employers from passing their operating expenses on to their employees.'” (Gattuso v. Harte-Hanks Shoppers, Inc. (2007) 42 Cal.4th 554, 562 (Gattuso) [quoting legislative history from the 2000 amendment to the statute].) “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. [Citation.]” (Gattuso, supra, 42 Cal.4th at p. 568.)

Determining Reasonable Reimbursement Amounts

Ever wonder how your boss figures out what slice of your cell phone bill the company should cover? Well, it's not just a wild guess. In California, employers have to put on their thinking caps and come up with a fair number that passes muster under Section 2802 of the Labor Code. This little piece of legal code is like Robin Hood for employees' wallets—it ensures you don't pay out-of-pocket for chatting with clients or answering work emails from your personal device.

The Fine Art of Crunching Numbers

Finding that "reasonable percentage" isn't rocket science, but it does take some savvy math skills. Employers might look at factors like how much time you're on the phone for work versus playing Candy Crush—or whatever floats your boat in off-hours. They've got to balance being fair without giving away the farm in reimbursements owed back to employees who use their phones primarily for business purposes.

Surely no one wants Uncle Sam taking more than his share because someone goofed up figuring this stuff out. So businesses often turn to experts or develop reimbursement practices that align nicely with tax laws—keeping things non-taxable as long as they're doling out cash strictly for those substantial non-compensatory business reasons we all love so much.

A Balancing Act Worth Getting Right

Imagine juggling while blindfolded—that's sorta what companies do when determining these amounts without seeing every detail about an employee's cell phone plan usage. Yet somehow, they must pinpoint a figure that doesn't leave anyone short-changed nor leads them down a rabbit hole full of extra taxes and headaches.

To get there, surveys can be golden—they help gauge average phone usage among staff so bosses aren't just shooting in the dark hoping to hit something reasonable. It's crucial since each penny counts toward keeping both sides—the hardworking folks making calls and texts happen and those footing the bills—in happy harmony.
Learn more about labor law compliance here.

Key Takeaway: 

Ever curious about how your boss figures out your cell phone bill reimbursement? It's all about fairness in California. They use smart math to ensure you're not paying for work calls on your dime.

Bosses have to balance fair reimbursements with tax laws, so they don't hand out too much or get slammed with taxes. Surveys help them hit that sweet spot without leaving anyone short-changed.

Recent Case Law Impacting Reimbursement Policies

If you've been keeping tabs on California employment law, then you know the courts have been busy bees clarifying what's fair play when it comes to reimbursing employees for their cell phone expenses. Think of your personal cell as a tiny office that fits in your pocket – if you're using it for work, the boss should chip in on the bill.

Let's talk about Cochran v. Schwan's Home Service – this case was a game-changer. The appeal held that employers need to reimburse a reasonable percentage of an employee's phone plan if they use their own device for work-related purposes, even without proof of extra costs incurred. It didn't matter if folks had unlimited plans; employers still had to cough up some cash.

The court ruled loud and clear: companies can't just let their workers shoulder all those pesky business calls and texts. Thanks to these rulings, which further defined responsibilities under Section 2802, businesses are scrambling not only to follow suit but also figure out how much they owe each person who has made work calls or shot off emails from their personal phones.

District courts continue shaking things up too. They keep hammering home that reimbursement isn't just nice-to-have; it's got legal teeth now. And while there aren't hard-set amounts set by federal law yet (so don't hold your breath), smart cookies running businesses will stay ahead by setting fair reimbursement practices before someone else decides for them. Corbett Williams Law, known pros in employment matters, recommend taking action sooner rather than later - because like milk left out overnight... unresolved issues with employee compensation can turn sour fast.

Common Questions Around Employee Cell Phone Use and Reimbursement

Ever wondered if scrolling through work emails on your personal cell at the dinner table means you're due for some extra cash from your boss? You're not alone. Let's tackle the big questions employees and employers have about cell phone reimbursements.

The Legal Lay of the Land

California labor code requires employers to cover costs that their team racks up while getting the job done - including those pesky work-related personal cell phone charges.

This isn't just a friendly gesture; it's law. But what counts as a necessary expense, or how much dough should you get back for tapping away at company texts? That's where things can get fuzzy.

Finding Fairness in Fees

If we talk numbers, companies need to pony up a "reasonable percentage" of an employee's bill when their device is used for work. So no, they don't have to foot your entire monthly statement unless every call was for closing deals or calming customers down.

Say you spend 30% of your screen time chatting with clients—expect reimbursement around that ballpark figure. Just remember: It's not just any court saying this—it comes straight from decisions like Cochran v. Schwan's Home Service ruling thundering down from California courts.

Dollars and Sense Strategies

Bosses scratching their heads over how to keep tabs without breaking bank might turn to surveys or provide company phones—a move smoother than silk on tax forms since Uncle Sam doesn't slap taxes on these reimbursements under most conditions.

A Case Study Cautionary Tale

In case your employer thinks skipping out on paying is an option, consider this: A man by the name of Cochran filed against his employer because he wasn't reimbursed for calls made on his own dime—and guess what? The court ruled in favor of him faster than you can hit ‘end call' after hearing bad hold music. Talk about setting precedent.

  • An ounce of prevention saves pounds...of lost wages?
  • Your dialing digits deserve dollars—don't shortchange them.
  • Pick plans wisely; whether yours or theirs could mean money matters less muddled.
Key Takeaway: 

Scrolling through work emails on your personal phone could mean extra cash in your pocket, because California law says your boss should cover those costs.

"Reasonable percentage" is the magic phrase for reimbursement; don't expect a full bill payment unless it's all work-related.

Companies might offer surveys or company phones to ease tracking and avoid tax headaches.


So, you've got the scoop on employee reimbursement when using a personal cell phone for work in California. Keep these takeaways handy: Employers must cover your costs for work-related calls—it's non-negotiable.

Dig into what counts as 'reasonable' payback; it's about fairness, not generosity. And don't stress over taxes—smart reimbursements won't attract them.

Court cases have cleared up any confusion, setting solid ground rules. Got questions? You're likely not alone. Look to FAQs and legal resources to guide you through the maze of mobile expenses.

Remember this: Your talk isn't cheap when it's for work—and California law agrees. It makes sure that paying out of pocket doesn't mean missing out at all.

If you are in need of a free case evaluation from experienced expense reimbursement attorneys, give Kingsley & Kingsley Lawyers a call or fill out our form. Our experienced legal professionals are available to evaluate your case with you for free. We've helped employees recover more than $300 Million in California alone, and we'd be happy to help you obtain the compensation you deserve. Take advantage of our no win, no fee promise.

About the Author

Eric Kingsley

Eric B. Kingsley is a 2023 "Best In Law" Award winner and has litigated over 150 class actions. He is also an AV peer rated attorney and a prolific speaker at various seminars on employment law.


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