California Court Upholds Rule For Phone-Use Reimbursement

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Employers must reimburse employees for using personal mobile phones under Section 2802 of the California Labor Code, a state appeals court ruled.

The appeals court reversed an order denying class certification to about 1,500 customer service managers employed by a grocery delivery company.

Employers must pay some reasonable percentage of an employee's mobile phone bill, regardless whether the employee or a third party paid for the phone charges, the court said.

Section 2802 requires employers to compensate employees for all necessary and actual expenditures reasonably undertaken as a direct consequence of employment duties, according to the decision.

The trial court had found that class commonality was lacking based on the employer's claim that mobile phone costs could not be determined because many mobile phone plans have unlimited talk minutes.

The employer also claimed that the employee who represented the class incurred no expenditures because his girlfriend paid for his phone plan.

The appeals court ruled that the trial court abused its discretion by making erroneous legal assumptions. The correct liability standard under Section 2802 requires only that employees demonstrate they are required to use personal mobile phones to make work-related calls and that they were not reimbursed, it said.

Actual Expenses Incurred

The payer of the mobile phone bill, whether the plan includes unlimited minutes or whether an employee changes plans to accommodate work-related phone usage is an irrelevant issue, the appeals court said. The focus of the commonality inquiry lies in actual expenses incurred.

If an employer is not required to reimburse expenses tied to mandatory business use of personal mobile phones, “the employer would receive a windfall because it would be passing its operating expenses onto the employee,” the court said.