Posted on February 10th, 2020
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What’s up, fellow entrepreneurs?
It’s John Fagerholm again. I wasn’t intending on making a video today, but one of my clients sent me an email regarding cell phone use and reimbursement.
And that’s typically a simple answer, but then my client was indicating that HR was talking about a new settlement that just happened that changes even that a little bit.
So I thought I would look it up really quickly to see what their HR was talking about.
And I came across the information and I thought I’d make a video because at this point, with all the videos I make and all the clients that I’ve helped through the crazy California laws, there are very few that surprise me.
But here’s another one that just surprised me. So I had to talk about it really quickly before I forgot to do a video about it.
So anyway, there’s a California code and it is California Labor Code section 2802 which requires employers to reimburse their employees if their employees are using their cell phones for business.
Now, it doesn’t matter if it doesn’t increase their costs at all or it doesn’t have any effect at all.
The code basically just says that, well there’s actually case law too, but the case law basically just says that you’re basically paying some of your employers overhead if you’re using your own equipment, even if it doesn’t costs you anything.
So that’s been around since about 2014 and that’s kind of what we’ve been going by for the last five years. But just came across this other case.
It was a class action lawsuit and it looks like it was filed but a settlement was reached.
So the reason why this one was important, and I don’t have the name of the case unfortunately in this article, but the reason why this is important is because it looks like it could potentially expand what California considers business use.
So it used to be under the 2014 case law use of the cell phone for the company’s business. But this settlement is a group of cleaners that were using their personal cell phones to clock in, clock out and also communicate with their supervisor.
So I’m assuming, and I haven’t read the case yet, I’m assuming that this has more to do with the amount of use that that they were having but the dangerous part about this case is the clock in and clock out because whenever you have a type of business where people go offsite, for example, like construction, cleaner, onsite cleaning crew or offsite cleaning crews, caterers, there’s a lot of time spent telling people where to go, and also that’s where you clock in and clock out.
And this new case and the settlement seems to say that you can’t use your own phone to clock in and clock out anymore, which then is going to require anyone that uses technology to also provide either work cell phones to everybody or require reasonable reimbursement.
So on one hand, providing cell phones to everyone is just too expensive for most people, especially if it’s the type of work that doesn’t require constant cell use.
And then second, reimbursing for reasonable use not only is it expensive, but it’s cumbersome.
So I don’t know what’s going to happen with this case, but I just wanted to discuss it and then as things unfold, I’ll update on it.
All right, until next time fellow entrepreneurs, be productive.
