As most employers in California know, employees must be reimbursed for all necessary expenses incurred in the performance of their job responsibilities. Specifically, Section 2802 of the Labor Code states:
An employer must compensate its employee for any necessary expenses or losses incurred by the employee as a direct result of the performance of his duties or his compliance with the employer’s instructions, even if unlawful, unless the employee, when he was following the instructions performed, she considered unlawful.
The COVID pandemic has forced many organizations to give their employees the ability to work remotely, and many companies continue to allow portions of their workforce to work remotely on a part-time or full-time basis. Employees who work remotely often use personal cell phones and home internet connections as part of their work. So, do employers have to pay for part or all of an employee’s mobile and/or internet plan?
Even if employees in California do not incur any additional costs associated with working remotely (i.e., if the employee pays a flat rate for Internet and/or cell phone usage and business use does not add to the employee’s costs), employers must oblige their employees nevertheless reimburse for a reasonable percentage of the employee’s mobile and/or Internet tariffs. The obligation to reimburse employees for a portion of their personal cell phone and Internet charges exists when the employees have no practical alternative to using their personal resources for business purposes, even if the employer does not have a policy specifically mandating the use of the personal resources or Devices.
Although the California courts have not defined a “reasonable percentage,” employers are required to reimburse their employees for all actual business-related expenses. If the employee pays a fixed amount for the use of his mobile phone and/or internet, the employer must reimburse his employees the percentage of the mobile phone and/or internet costs that are due to the employee’s mandatory use of mobile phone and/or internet and/or use their mobile phone for professional purposes. Alternatively, employers may choose to provide their employees with a company cell phone and/or device with unlimited internet access.
In order to comply with its obligation to reimburse employees for mobile phone and/or internet costs incurred in the course of carrying out their work, employers can either pay the actual costs of the employee according to an invoice or pay a lump sum that is sufficient for the part of the Cover employee costs attributable to business use. If employers elect to pay a flat-rate reimbursement amount, they should confirm in writing that employees who believe their business usage exceeds the standard reimbursement amount can contact Human Resources and request payment in excess of their actual business usage is equivalent to.
If an employer fails to reimburse its employees for necessary business expenses incurred by the employees in connection with the performance of their job duties, the employer may face a wage and hour claim and, if successful, the plaintiff may recover all reasonable costs, including attorneys’ fees that the employee incurs when enforcing his rights can be significant. Additionally, if a company fails to pay its employees for necessary business expenses across the company, the company may be subject to a class action lawsuit, a lawsuit under the Private Attorneys General Act, or both.
What should employers do now?
Review your reimbursement practices and update them as necessary. Given that many workers must use their personal cell phones and/or home Internet connections to perform their jobs, California employers should review their reimbursement practices to ensure they reimburse workers for all work-related expenses incurred by workers comply with their obligations, including personal mobile phone charges and home internet charges. Check the work functions of remote workers. In addition to cell phone and internet use, employers should review the work responsibilities of all remote workers to ensure there are no additional necessary business expenses that are not reimbursed. These expenses can include a home printer, as well as printer paper and ink, computers, computer monitors, and ergonomic chairs.