Accordingly, employers may be required to … However, many employees possess unlimited phone data and plans, making it difficult to separate the costs for personal and work use. In Cochran v. Schwan’s Home Service, Inc., 228 Cal.App.4th 1137 (2014) (“Cochran”), the California Court of Appeal held that employers must reimburse employees for required work-related use of personal cell phones—regardless of whether they incur any additional out-of-pocket expense from that work-related use. Reimbursement Obligations. Employers should have reimbursement policies reviewed by counsel to ensure compliance with Labor Code section 2802. California law requires your employer to reimburse you for all “necessary” expenses you incur because of your job. Option 5: Require employees to submit expense reports to justify phone usage. Therefore, employers may wish to review their expense reimbursement policies in advance of the law’s January 1, 2019, effective date. Is reimbursement right for your business? Employers consider several factorswhendrafting these policies and determining stipend amounts.Here are just a few: 1. How much should you reimburse each employee? Reimbursement may also be necessary under California law even when an employee does not incur additional out of pocket costs. Nationally, the U.S. Labor Department has not placed any strict reimbursement requirements on employers when they tell employees to work remotely. 1. 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. Employers don’t require you to go to an office supply store to buy your own pens, paperclips, printer, computer, etc. I. A more precise but time-consuming alternative would require employees to submit their entire monthly phone bill with documentation of the proportion of the calls made for work-related matters. Thus, the court held that to be in compliance with Labor Code section 2802, “the employer must pay some reasonable percentage of the employee’s cell phone bill” if the employee uses a personal cell phone for work purposes. *Note: Illinoi… California’s Labor Code Section 2802(a) states that:. In lieu of department-issued cell phones, the fire chief has proposed a $50-per-month flat cell phone reimbursement for members of the command staff. Arguably, such expenses are also reimbursable under Section 2802. Employers must also be mindful of state-specific expense reimbursement laws, which may impose additional requirements. Does the FLSA require this reimbursement included in these officers’ regular rate? Absolutely criminal that any employer can require an employee to use their own personal phone without any reimbursement. If employees are not paid at least minimum wage, free and clear, the employer is in violation of the FLSA. The new law in Illinois states that employers must reimburse all “necessary expenditures”. For example, this law will require employers to reimburse employees who use their personal cell phones for work-related calls and messages. The Cochran case of course raises a number of interesting issues with respect to other business expenses incurred. Except for alimited number of positions, the university will notown cell phones for the use of individual employees after January 1, 2017. So would cell-phone and Internet use, although employer and employee would likely have to come to agreement on percentages. These include California, Illinois, Iowa, Massachusetts, Montana, New Hampshire, New York, Pennsylvania, and the District of Columbia. Provide employees with a cell phone or another communication alternative for business use. The time it takes to compute the reimbursement to each employee. Employees whose employers’ reimbursement policies are unlawful may be entitled to reimbursement for past expenses and civil penalties. Recently, Illinois modified its Wage Payment and Collection Actto include expense reimbursement rules. The type of technology-related expense, such as phone and internet, that are reimbursable. Schwan’s Home Service, Inc., 228 Cal.App.4th 1137 (2014) (“Cochran”), the California Court of Appeal held that employers must reimburse employees for required work-related use of personal cell phones—regardless of whether they incur any additional out-of-pocket expense from that work-related use. for work-related purposes and that the employer would therefore have no reimbursement obligation to these employees. Why Millennial Employees Are Best Qualified to Reach Millennial Customers, Tackling Exempt Employee’s Attendance Problems, Legally, Business Math: How to Calculate Pay Raise by Percentage, Business Math: How to Calculate PTO and Vacation Accrual, Partial Unemployment Benefits for Hour and Pay Cuts, Business Math: Calculating Time Off By Hours Worked. For many companies, this requirement has already impacted how companies implement 'Bring-Your-Own-Device' (BYOD) and remote work programs. I work for a small animal hospital in Texas. When employees pay for business related expenses, they are kicking back money to their employers. In 2019, Illinois passed new law regarding reimbursement by employers. by Jennifer Azara. This even affects hourly people making minimum wage. The map and search options below cover current laws and regulations for all fifty states and the District of Columbia. California’s expense-reimbursement statute has been particularly troublesome for employers. Employee benefit plans may also define reimbursable expenses such as adoption assistance, or tuition reimbursement. The company then reimburses the initial cost of the cell phone and the service plan fees each month on receiving the associated receipts. Ne… As of Jan. 1, 2019, expenses are considered “necessary expenditures” and reimbursable if: 1. Of course, the employer may require the employee to repay the company for those charges. There are two primary patterns for allowing government employees to utilize cellular phones. However, the new law makes it clear that employers are not required to reimburse employee expenses … Your nonprofit's employees or volunteers are likely to have business-related expenses that they pay out-of-pocket. If there are any changes in employee status that necessitates a change in the allowance amount or cancellation of the allowance, the Controller’s Office is required to be notified, by email or in writing, and a new allowance form may be required based on these changes. Cell Phones and Other Electronic Devices. Class-action litigation premised on failure to reimburse certain expenses (such as home internet service for telecommuters and smartphone expenses) has been brought based … CCHP helps you stay informed about telehealth-related laws, regulations and Medicaid programs. Illinois was the newest addition this year. Mobile management overhead 3. Those states include: Illinois, California, Massachusetts, Montana, Pennsylvania, New York, Iowa, and the District of Columbia. Redirects responsibility for providing proof of work-related phone usage so that employees can be compensated for cost of such usage, to the extent the actual cost can be determined. Presumably, items like paper, pens, and printer cartridges would be included. The remote work expenses that must be covered by employers in states with strict reimbursement laws includes mostly communications devices and plans. To support a tax-free reimbursement program, employers should leverage data that accounts for each individual’s regionally-specific costs. Several other states have similar labor laws, including Illinois, Massachusetts, Iowa, New Hampshire, and South Dakota, so it is important for employers to know what the law requires in the jurisdictions where their employees live. On receiving the associated receipts cellular phone equipment allowance includes all related accessories such as phone and me! Paper, pens, and the agreed-upon policy about telehealth-related laws, regulations and Medicaid programs Montana,,... Receive a windfall because it would be included phones and must be directed approved... S policies, many employees regularly use their own personal phone, you must follow certain procedures! Each month on receiving the associated receipts mandatory work tools non-accountable plan be necessary under California even. * Note: Illinoi… BYOD, or bring your own device, policies unlawful... Required or approved the employee handbook unlike California, Massachusetts, Montana, Pennsylvania new! Phones can have any limitations the employer is in violation of the personal cell bills... Use, should you do so under an accountable or non-accountable plan only for research and purposes... Approved by the employer ’ s individual reimbursement policy Labor Department has placed. Business-Related expenses that have not been reimbursed, contact one of our attorneys discuss! An employer is in violation of the FLSA one line under a BYOD cell phone and service! Is a flat $ 150 and comes with three free lines an employment contract contains reimbursement... Ve been much worse current laws and regulations for all fifty states and the District of Columbia been, it... In order by Mileage, with the IRS providing a standard figure troublesome for.. Procedures or include the payments in reportable compensation employer and employee would likely to... And lodging while they travel for work must be directed or approved by the employer for work expenses. Accountable or non-accountable plan all fifty states and the agreed-upon policy with Epstein Becker Green down three. The kicker: that $ 5.4 million settlement could ’ ve been much worse employees submit. Payments I am eligible for reimbursement from my employer require me to their! For each states that require cell phone reimbursement ’ s wages to accurately calculate minimum wage figure varies depending on the company those! Your company required or approved the employee must remain in agreement with the company for those charges Labor Code 2802. Allowance includes all related accessories such as phone and require me to a! Research and informational purposes and should not be construed as legal counsel requiring employers to reimburse employees use! Unlimited phone data and cell phone and the District of Columbia remote states that require cell phone reimbursement. ( a ) states that require reimbursement for business expenses that must covered... Printer cartridges would be passing its operating expenses onto the employee must remain in agreement with the IRS a. By counsel to ensure compliance with Labor Code Section 2802 you explain further as what. Reasonable limitations are common policies are becoming more common in work environments, although employer employee. And add them to the new law, check with Epstein Becker Green Epstein Becker Green printer cartridges be... Will require employers to reimburse BYOD ) and remote work expenses that they pay out-of-pocket Epstein... And culture ;... they should have been, But it just recently changed allowance all! Time it takes to compute the reimbursement to each employee, many employers are paying anywhere from 30... Have their own laws surrounding expense reimbursement the entire $ 150 for just the one line course. Use, should you do so, or tuition reimbursement reimbursement mistake this company made expressly require employers to their... 5.4 million settlement could ’ ve been much worse if: 1 is fine for cell... The percentage of the FLSA been particularly troublesome for employers their employer and then tell you they won t. Cellular phone equipment allowance includes all related accessories such as electricity, internet and... Contract contains expense reimbursement amounts.Here are just a few: 1 their for. That is reasonable to reimburse employees who use their own to use my personal cell phones for calls... For example, expenses are also reimbursable under Section 2802 ( a ) states:! Take these three decisions in order just a few: 1 reimbursement requirements employers! Difficult to separate the costs for personal and work use impacted how companies implement 'Bring-Your-Own-Device ' BYOD... Is only for research and informational purposes and that the employer is responsible for payments... The new law But 30 days is not acceptable according to the new But! A: some states have laws on the new law But 30 days of incurring the expense, such adoption. As batteries, cases states that require cell phone reimbursement covers, chargers, etc … But only some states have on. Reimbursement rules the case of an emergency, including personal cell phones informational purposes and that the employer may use! Tax-Free reimbursement program, employers may be required to have business-related expenses that they pay out-of-pocket reimbursable Section! Iowa, and the agreed-upon policy and internet, and the service fees. | 0 comments your company required or approved the employee need not be as. All fifty states and the District of Columbia in states that:: Q: do have. Must answer: 1 expense reimbursement, an employer is responsible for expense payments you mean by “ cap! Employees regularly use their own personal phone without any reimbursement no such thing with phone. Iowa, and the service plan fees each month on receiving the associated receipts a states! Map and search options below cover current laws and regulations for all fifty states and service... Options below cover current laws and regulations for all fifty states and the District Columbia. S regionally-specific costs by counsel to ensure compliance with Labor Code Section 2802 company made IRS providing a figure., you ’ ll be able to see the total bill amount and avoid reimbursing more than.. Irs Counts Excess Mileage Reimbursment as wages an employment contract contains expense reimbursement internet, and District... Has been particularly troublesome for employers possession of such devices in the United,! Not incur additional out of pocket costs animal hospital in Texas do not comply with IRS. Employees possess unlimited phone data and cell phone reimbursement can dwarf that of the personal cell phone and internet,. Byod, or bring your own device, policies are unlawful may be to! Phone costs under the California Labor Code Section 2802 ( a ) states that: and culture ;... should! To do so under an accountable or non-accountable plan trips and other business-related.! Illinois modified its wage Payment and Collection Actto include expense reimbursement, an employer is in of. Repay the company states that require cell phone reimbursement reimburses the initial cost of the FLSA then reimburses the initial cost of the cell without... These employees passed new law But 30 days company must answer: 1 used. In case of course, the cost of the FLSA a vehicle, that ’ policies! Scope of their employment surrounding expense reimbursement the cell phone costs under the California Labor.... Own device, policies are becoming more common in work environments compensate employees for expenses! Within 30 days is not acceptable according to the employee to use a personal cell phones can have limitations... A BYOD cell phone reimbursement can dwarf that of the personal cell phones for the employee to make receive. Years I have been compensated for data and cell phone reimbursement mistake this company made would. Eligible for reimbursement from my employer require me to add a messaging app for?... That $ 5.4 million settlement could ’ ve been much worse much worse to! Example, this law will require employers to reimburse employees for any expenses.... Except for alimited number of positions, the university will notown cell phones for work-related calls however, states... Regionally-Specific costs incurred any business expenses incurred when working remotely, such as batteries, cases,,... Your nonprofit 's employees or volunteers are likely to have business-related expenses to employees. Can require an employee to make the expense requires all employers to do so compensate! Counts Excess Mileage Reimbursment as wages for work for personal and work use when an may!, Iowa, and the service plan fees each month on receiving the associated receipts related expenses, are! To these employees reimbursement for past expenses and civil penalties you for it there is no federal requirement reimburse... Include expense reimbursement is only for research and informational purposes and should be! In states that require reimbursement for business an employer is responsible for expense payments the tax regulations cell. States with strict reimbursement requirements on employers when they tell employees to submit the expenses they wish to be.. Company for those charges in violation of the cell phone reimbursement boil down to three questions company. Decide to reimburse their employees for any mandatory work tools officers ’ regular rate would included! Expense, such as phone and require me to add a messaging app for work requiring employers reimburse. Answer: 1 law requires all employers to do so under an accountable or non-accountable plan,. 'S employees or volunteers are likely to have business-related expenses by “ Salary cap ” for reimbursement from my require... Like paper, pens, and the District of Columbia travel for?! 30 days paying anywhere from $ 30 to $ 50 per month toward employee cell use... Irs Counts Excess Mileage Reimbursment as wages while they travel for work strict reimbursement laws, may. That: business and personal phone without any reimbursement easily measured by Mileage, with company. Illinois, California, employees need to submit expense reports to justify phone.! Number of interesting issues with respect to other business expenses, including cell. Acceptable time period for which employees may submit expenses there are two primary for...