Section 2802 of the California Labor Code requires employers to reimburse their employees for any “necessary expenditures or losses” that they incur as a direct result of doing their job. We are also particularly adept at providing strategic labor advice, handling complex NLRB matters, corporate and election campaigns. 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The court stated that section 2802 requires that the employer should pay some “reasonable percentage” of the employees’ cell phone plans when the cell phone is required for work. Therefore, regardless of whether an employee has a limited or unlimited cell phone plan, the employer’s obligation is the same: “The reimbursement owed is a reasonable percentage of [the employees’] cell phone bills.” Employers have a duty to determine what that reasonable percentage is, and to reimburse their employees accordingly. Reimbursement of employee cell phone expenses is governed by California Labor Code Section 2802, which provides: An 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 . California Labor Code section 2802 requires employers to reimburse employees, “for all necessary expenditures or losses incurred by the employee” while completing work duties. Employers should take adequate steps to accurately ascertain what level of reimbursement is reasonable for their employees. Our labor and employment team has been active for over 70 years representing employers in all matters related to the employer/employee relationship. ABM Industries, a janitorial service provider, recently agreed to a $5.4 million dollar proposed settlement in Marley Castro, et al. This article addresses when and to what extent Labor Code § 2802 requires that employees be reimbursed for these sorts of remote-work expenses. Case results do not guarantee or predict a similar result in any future case. However, we also litigate in federal and state courts throughout the nation. In fact, employees throughout California may be owed significant compensation for basic work-from-home expenses. The court held that Labor Code Section 2802 requires an employer to reimburse an employee who uses his or her personal cell phone for work-related calls. In Cochran v. Schwan’s Home Service, Inc.,[2] a customer service manager sued his employer on behalf of a class of 1,500 similarly situated employees, alleging the employer’s failure to reimburse class members for the work-related use of their personal cell phones. v. ABM Industries, Inc., a class action involving a California class of over 3,000 cleaning employees who claim that they were not reimbursed under Labor Code section 2802 for the expense of required use of their personal cellphones. Expenses incurred in connection with training or licenses that are required by law may be passed on to employee. Thus, the first step of any Section 2802 analysis is to ask who is submitting the request. The court held that the requirement even extends to an employee who has a cellphone plan with unlimited minutes as otherwise the employer would receive a windfall because it would be passing on its operating expenses on to the employee. California Labor Code Section 2802 requires that employers reimburse employees for work-related cell phone calls -- even if they have unlimited plans. This section reads, in relevant part: “An 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.”, Many jobs have general dress codes that are not quite uniforms. . The plaintiff in Cochran filed a class action on behalf of customer service managers employed by Schwan’s, seeking reimbursement under Labor Code section 2802 for expenses pertaining to the work-related use of their personal cell phones. Here’s a list of Five Things to Remember About Employee Reimbursements to help California employers navigate this area of the law. Unless otherwise noted, attorneys not certified by the Texas Board of Legal Specialization. For example, if an employee is required to use her personal cell phone for business purposes, but her cell phone plan provides for unlimited data and calling, there is arguably no additional expenditure incurred as a result of the work-related use. Please use the search field below for any keywords in the desired classification. 1937, Ch. Labor Code section 2802 requires an employer to “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 . Although the Cochrancourt only considered phone calls made on personal cell phones, employer’s increasing reliance on smart phone’s sophisticated data-consuming capabilities, such as mandating the use of employer applications, are also covered under Labor Code section 2802. It does not specify what amounts are specifically necessary. . California Labor Code section 2802 requires employers to reimburse employees, “for all necessary expenditures or losses incurred by the employee” while completing work duties. Necessary expenditures or losses include all reasonable costs. The Court of Appeal rejected this sort of “but for” causation test. The BYOD trend has been driven in part by Millennials in white-collar positions who have come to rely on using thei… An employee survey, inquiring into how much employees pay per month for their service plans and what percentage of their cell phone usage is work-related, can be an effective way of finding the right number. According to the California Supreme Court, whether an expense is “necessary” under Section 2802 depends on the reasonableness of the employee’s choices. While these standards don't apply in every state or country, employers should be aware of the standards currently being enforced in California, because history tells us that most U.S. states that favor the employee will be following suit. No Exceptions: Employers Must Always Reasonably Reimburse Employees’ On-the-Job Use of Personal Cell Phones (California) Section 2802 of the California Labor Code requires employers to reimburse their employees for any “necessary expenditures or losses” that … California Labor Code § 2802. Id. Home; Attorneys; Practice … The court held that Labor Code Section 2802 requires an employer to reimburse an employee who uses his or her personal cell phone for work-related calls. The California Labor Code – and, consequently, Section 2802 – only … Lab. . Schwan Home Service, Inc. that when employees must use their personal cell phones for work-related calls, California Labor Code section 2802 requires they be reimbursed by their employer. Recently, the California Court of Appeal, Second District concluded in Cochran v.Schwan Home Service, Inc. that when employees must use their personal cell phones for work-related calls, California Labor Code section 2802 requires they be reimbursed by their employer. Because the trial court relied on erroneous legal assumptions … “If an employee is required to make work-related calls on a personal cell phone, then he or she is incurring an expense for purposes of section 2802 . To learn more, view our Cookies Policy. California Labor Code Section 2802 states an employer shall indemnify his/her employee for all necessary expenditures or losses incurred by the employee in the direct consequence of the discharge of his/her duties. DIVISION 3. Otherwise, the employer would receive a windfall because it would be passing its operating expenses on to the employee.”. Necessary expenditures or losses include all reasonable costs. One way to avoid the Labor Code section 2802 quandary is to issue company cell phones to employees, while at the same time prohibiting the use of personal phones. Under the California labor code, section 2802, all business use of a personal cell phone must be reimbursed. The penalty amounts and procedures applicable to “expenses” are set forth in Labor Code Section 1197.1. Code § 2802(a). 1937, Ch. Labor code section 2802 requires employers to indemnify employees. For instance, where it is mandatory for employees to use their personal cell phones for work, generally they must be compensated for a reasonable percentage of their phone plans. 1937, Ch. For instance, in Townley v. BJ’s Restaurants, Inc., a restaurant required its employees to wear black, slip-resistant shoes, but the restaurant did not specify a brand, style, or design, and the employees could wear the shoes outside of work. A statutory duty generally has a three-year statute of limitations, [See CCP Sec. Under California Labor Code section 2802, an employer is required to 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.” This includes reimbursement for mileage (if the employee is required to drive for work), gas, cell phone bills, and believe it or not, lawsuits. v. ABM Industries, Inc., a class action involving a California class of over 3,000 cleaning employees who claim that they were not reimbursed under Labor Code section 2802 for the expense of required use of their personal cellphones. However, in an unambiguous opinion issued on Tuesday, August 12, the Second District Court of Appeal held that employers must reimburse all the work-related personal cell phone use of their employees, regardless of the employees’ individual arrangements vis-à-vis the selection, terms, or payment of personal cell phone plans. Content . As an alternative, employers may also consider avoiding the reimbursement issue altogether by providing company-issued cell phones which employees will be required to use for all business purposes. The Court held that “when employees use their personal cellular phones for work-related calls,” California law (i.e., Labor Code Section 2802) “requires an employer to reimburse them.” Section 2802 liberally applies to many expenses that employees may be required to incur to perform their jobs, including vehicle expenses, travel expenses, and cell phone and internet plans. Cochran illustrates the trend of California courts in broadly applying Labor Code section 2802. This article addresses when and to what extent California Labor Code section 2802 requires that employers reimburse employees for these sorts of remote-work expenses. Whether the employees have cell phone plans with unlimited minutes or limited minutes, the reimbursement owed is a reasonable percentage of their cell phone bills.” (Cochran v. Schwan's Home Services, Inc. (2014) 228 Cal. California Labor Code Section 2802 states an employer shall indemnify his/her employee for all necessary expenditures or losses incurred by the employee in the direct consequence of the discharge of his/her duties. ABM Industries, a janitorial service provider, recently agreed to a $5.4 million dollar proposed settlement in Marley Castro, et al. Required cell phone use has also become more common. Division 3, Employment Relations; Chapter 2, Employer and Employee; Article 2, Obligations of Employer; Section 2802. That includes expenses you might incur while working from home. California Labor Code § 2802: Employers’ Duty to Reimburse. 2802. Labor Code Section 2802 Requires Employers To Indemnify Employees Labor Code section 2802 requires an employer to “indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or […] This is an advertisement Call Us Today: (855) 976-9228 Current wait seconds. Personal cell phones at work: Five lessons employers should take away about expense reimbursement set forth in Cochran v. Schwan’s Home Services. California Labor Code Section 2802 requires employers to reimburse California employees for “all necessary business expenditures or losses incurred … For more detailed codes research information, including annotations and citations, please visit Westlaw . Generally, expenses are not reimbursable when the employer does not know, or have reason to know, that the employee has incurred the expense. [1] But what if an employee’s work-related activities do not actually generate any expense in addition to that which the employee would have normally incurred otherwise? 335 through 349.5] while the recovery of a penalty generally has a one-year statute of limitations. Under section 2802 of the California Labor Code, “[an] 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.” Cal. The court granted summary judgment in favor of the employer, because, under the facts of that particular case, the employer did not know or have reason to know the employee incurred those expenses. For a detailed description of each code, please refer to the Classification Manual. . 2802. To be reimbursable, an expense must be necessary to the performance of an employee’s job duties or to comply with the employer’s instructions. Instead, it held that when an employee “must” use his personal cell phone for work-related calls, the employer … Labor Code Section 2802. For instance, if you bus tables in a restaurant, you may be told to wear a white shirt, dark pants, and black slip-resistant shoes. (a) An 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, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful. Citing Section 2802, plaintiffs' attorneys have aggressively pursued claims against California employers for failure to reimburse various employee expenses, including home internet and cell phone … The law is intended to prevent employers from passing on their operating expenses to their employees. B247160, filed 8/12/2014), the California Court of Appeal, Second Appellate District, unequivocally held that under California Labor Code section 2802, an employer must always reimburse an employee for the reasonable expense of mandatory use of a personal cell phone. Please enable JavaScript to view this website. The general reimbursement statute of the California Labor Code is Section 2802. Schwan’s Home Service, Inc. (2014) 228 Cal.App.4th 1137, 1140: “when employees must use their cell phones for work-related calls, Labor Code section 2802 requires the employer to reimburse them. As long as these basic wardrobe items are “usual and generally usable in the occupation,” they are not reimbursable. The State of California has led the way in defining what employers are required to do when asking officers to bring their personal phones to work. Employees must have cell phones with data plans, home internet access, and a laptop or similar device in order to meet these demands. Where the use of equipment is … Employers do not need to provide reimbursement for expenses incurred by independent contractors. This article addresses when and to what extent California Labor Code section 2802 requires that employers reimburse employees for these sorts of remote- work expenses. This class code lookup guide is to be used as an aid in determining the proper classification for a given operation. Labor Code § 2802 Reimbursement Claim Elements. Although the Cochrancourt only considered phone calls made on personal cell phones, employer’s increasing reliance on smart phone’s sophisticated data-consuming capabilities, such as mandating the use of employer applications, are also covered under Labor Code section 2802. Labor Code Section 2802 requires an employer to “indemnify his or her employee for all necessary expenditures or losses To see the importance of the ruling in Cochran, consider an employee who purchases a smart phone or a computer or pays monthly fees for a minute plan, a data plan, or home internet access. The court held that the details about each employee’s cell phone plan do not determine liability. Read this complete California Code, Labor Code - LAB § 2803 on Westlaw FindLaw Codes are provided courtesy of Thomson Reuters Westlaw, the industry-leading online legal research system . We work with government agencies such as EEOC, OSHA and the OFCCP, and, where our clients already have represented employees, labor unions, to negotiate beneficial outcomes. reimbursement for easily overlooked expenses, including cell phone expenses, home office expenses, car allowances, and mileage reimbursements that are lower than the IRS rate. California Labor Code Section 2802 states that employers must “indemnify” an 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 law is intended to prevent employers from passing on their operating expenses to their employees. Whether the employees have cell phone plans with unlimited minutes or limited minutes, the reimbursement owed is a reasonable percentage of their cell phone bills. The most common examples are mileage, travel, and dining expenses. 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. It does not specify what amounts are specifically necessary. California Labor Code section 2802 requires an employer to reimburse its employees for expenses they necessarily incur in the discharge of their duties. A Pasadena Employment Law Firm Committed to Helping Workers Under Cochran, an employer cannot defend a 2802 action related to use of a cell phone on the basis that the employee would have bought a cell phone even if she was not required to use it for work. The general reimbursement statute of the California Labor Code is Section 2802. Did you know that California Labor Code Section 2802 requires employers to reimburse employees for any necessary expenses the employees incur while doing their jobs? And now that many employees are using their home internet, the business portion of their internet bill is reimbursable, even if they would have had a home internet plan before. Toggle navigation. The court stated that section 2802 requires that the employer should pay some “reasonable percentage” of the employees’ cell phone plans when the cell phone … The court found the shoes were not reimbursable because they were not part of a uniform and were “generally usable in the restaurant occupation.”. Employer and Employee [2750 - 2930] ( Chapter 2 enacted by Stats. To prevail on a failure to reimburse claim, California employees … Questions of necessity are common around the use of cell phones and other technology in the workplace. We hold that when employees must use their personal cell phones for work-related calls, Labor Code section 2802 1 requires the employer to reimburse them. This website uses cookies to collect certain information about your browsing session. Under California Labor Code Section 2802 and court decisions in Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal.4th 554 (2007) and Cochran v. Schwan’s Home Service, Inc., 228 Cal.App.4th 1137 (2014), employers are required to reimburse employees for all “necessary” and “reasonable” expenses. EMPLOYMENT RELATIONS [2700 - 3100] ( Division 3 enacted by Stats. The employee knew that his employer had a policy of reimbursing business-related expenses, yet he did not submit any reimbursement requests. Analysis and Development in Employment & Labor Issues. Not … March 2015, Volume 29, No. In one California case, an employee claimed that he frequently ran work-related errands in his car, but he was not reimbursed for his mileage. The new Illinois law mirrors key language in California Labor Code Section 2802, California's expense reimbursement law. For example, employers requiring employees to clock in and out on a cell phone app must either provide a cell phone … … Among the items that may require reimbursement in California are office supplies, uniform costs, travel expenses, and mandatory … Whether the employees have cell phone plans with unlimited minutes or limited minutes, the reimbursement owed is a reasonable percentage of their cell phone bills. 2. “We hold that when employees must use their personal cell phones for work-related calls, Labor Code section 2802 requires the employer to reimburse them. B247160, that California Labor Code Section 2802 requires employers to reimburse their employees for work-related use of personal cellphones and other personal electronic devices, stating: “We hold that when employees must use their personal cellphones for work-related calls, Labor Code section 2802 requires the employer to reimburse them. 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