Cellphone reimbursements

Refresher on employee reimbursement of necessary expenses

Published on

A recently announced settlement of $5.4 million pending approval in a California federal class action suit in the Northern District of California is a reminder to California employers of the importance of properly reimbursing employees for necessary expenses they incur at work.

The suit alleged the employer, ABM Industries, Inc., a facility management company, made cleaning employees use their personal cellphones for work (specifically, to punch in and out of work and communicate with management) without reimbursing them in violation of California Labor Code Section 2802, California’s Unfair Business Practices Act, and the California Private Attorneys General Act (PAGA). After the Plaintiffs’ attorneys and others take their share, the remaining $3.47 million is to be divided among 34,000 workers, so that each worker will receive at least $20. The workers’ attorneys deemed the $5.4 million figure to be about 30 percent of the $17.7 million maximum they could potentially win at trial.

Employers should examine the nature of their work and communication practices in the workplace and confirm that employees: (1) are not required to use their personal cellphones for business purposes, or (2) are reimbursed for usage incurred for work. Employers should also take this opportunity to examine their expense reimbursement policies overall for any other potential items that may require reimbursement.