CHAUVEL & GLATT , LLP

In today’s mobile-first, remote-friendly work environment, employees often use their personal cell phones to conduct business, such as answering calls, checking email, joining Zoom meetings, or managing apps related to scheduling and productivity. However, many California employers overlook the fact that when employees use their personal phones for work, even occasionally, state law may require reimbursement. Failing to do so can expose businesses to significant legal risk.

Below, we break down why cell phone reimbursement matters, how California Labor Code § 2802 applies, and what employers need to do to stay compliant.

What Is California Labor Code § 2802?

California Labor Code § 2802 requires employers to reimburse employees for “all necessary expenditures or losses incurred […] in direct consequence of the discharge of [their] duties.” In plain terms, if an employee is required to spend their own money to do their job, the employer must pay them back. This is true whether they are spending on gas, office supplies, or their cell phone.

The law was designed to prevent employers from shifting business costs onto workers. Over the years, its application has broadened to include expenses tied to the digital workplace. Cell phone reimbursement is now one of the most common (and most litigated) categories under this statute.

Cell Phone Reimbursement Under Labor Code § 2802

The leading case interpreting §2802 in the context of cell phone use is Cochran v. Schwan’s Home Service, Inc. (2014). In Cochran, the California Court of Appeal held that:

“If an employee is required to use a personal cell phone for work-related calls, then he or she must be reimbursed a reasonable percentage of the cell phone bill, even if the employee did not incur an extra expense.”

In other words, reimbursement is mandatory even if the employee’s cell phone plan is unlimited and they didn’t incur extra costs. The key issue is whether the employer required or expected work to be done using the personal device.

This ruling effectively established that employers cannot avoid liability by claiming that no additional expense was incurred. If the phone was used for work, the employer owes something.

What Qualifies as Work-Related Cell Phone Use?

Cell phone use for work can take many forms. It’s not limited to phone calls. Courts and regulatory bodies have acknowledged that reimbursement may be required when employees:

• Make or receive business calls or text messages
• Check and respond to work emails or chat apps
• Use timekeeping, scheduling, or dispatching apps
• Rely on GPS or mapping services for work-related travel
• Access CRM systems, order portals, or cloud storage
• Attend virtual meetings or trainings via mobile apps

Reimbursement obligations may apply even in gray areas. For instance, if an employer issues a policy allowing (but not requiring) employees to use their personal phones for convenience, and then tacitly relies on that access, reimbursement may still be owed.

This is especially important in hybrid work environments and BYOD (Bring Your Own Device) programs, where the boundaries between personal and professional use are often blurred.

Common Employer Mistakes About Cell Phone Reimbursement

Despite clear legal precedent, many California employers continue to make avoidable errors when it comes to cell phone reimbursement. These missteps can expose businesses to serious legal and financial consequences under Labor Code § 2802.

1. Assuming No Reimbursement Is Needed for Unlimited Plans

One of the most widespread misconceptions is that if an employee already has an unlimited cell phone plan, the employer has no obligation to reimburse them. This assumption was directly rejected in the landmark Cochran v. Schwan’s Home Service, Inc. case. The court held that reimbursement is required even if the employee incurred no “additional” expense. The key legal issue is whether the employer is benefitting from the use of the personal device, not whether the employee paid more as a result of that use.

2. Relying on Informal Policies or Verbal Agreements

Some employers assume they are protected if they have a general understanding with employees or communicate expectations informally. However, California law does not recognize verbal agreements as a substitute for written agreements. Courts expect employers to have clear, written reimbursement policies that employees can rely on and that are applied consistently across the company. Informal or inconsistent practices can increase liability and weaken an employer’s defense if challenged.

3. Failing to Track or Document Usage

Employers are not required to conduct forensic analysis of phone bills, but they do need a reasonable method to estimate and document work-related use. Many businesses get into trouble because they make reimbursement decisions without any record of how employees are using their phones for work. A simple intake form, policy acknowledgment, or monthly reimbursement report can help establish good faith efforts to comply with § 2802.

4. Ignoring Hybrid or Remote Workers’ Use of Personal Phones

In a post-pandemic workplace, remote and hybrid arrangements are the norm across many industries. Yet some employers still fail to account for the increased reliance on personal devices outside the office. If your employees use mobile phones to attend virtual meetings, access apps, or stay in communication while working remotely, reimbursement is likely required. Ignoring this reality opens the door to claims, especially in organizations with inconsistent or outdated reimbursement practices.

Risks and Consequences of Noncompliance

When employers ignore or mishandle their reimbursement obligations, they face a range of legal and financial consequences. The cost of noncompliance can far exceed the expense of simply implementing a proper policy.

Wage and Hour Lawsuits and Class Actions

Employees who are not reimbursed for business-related cell phone use may be entitled to bring claims under California wage and hour laws. These claims often arise in the context of broader disputes over overtime, meal and rest breaks, or final wages. More dangerously, a single claim can expand into a class action if the issue affects multiple employees, potentially leading to six- or seven-figure settlements or judgments. Employers without clear, uniform reimbursement practices are particularly vulnerable.

PAGA (Private Attorneys General Act) claims

Under California’s Private Attorneys General Act (PAGA), employees can bring enforcement actions on behalf of the state for Labor Code violations, including those related to unreimbursed expenses. PAGA claims are powerful because they don’t require class certification and can result in steep civil penalties, often multiplied across a large workforce. Many recent lawsuits over cell phone reimbursement have included PAGA causes of action.

Penalties, Attorney’s Fees, and Back Payments

Labor Code § 2802 entitles prevailing employees to reimbursement for actual losses, interest, and attorney’s fees. In litigation, legal fees can easily exceed the underlying claim, especially if the matter drags on or involves multiple parties. Courts may also award waiting time penalties under Labor Code Section 203 if the reimbursement was owed at termination and not paid promptly. These cumulative costs can create major financial exposure.

Reputational Damage and Employee Dissatisfaction

Beyond legal liability, failure to reimburse employees for work-related costs can erode trust, fuel resentment, and damage your reputation as a fair employer. Today’s workforce expects transparency and equity, particularly regarding out-of-pocket costs associated with job performance. Even minor oversights in expense reimbursement can be magnified in online reviews, HR complaints, or turnover rates, particularly in competitive industries where talent retention is crucial.

Employers can avoid these outcomes by taking a proactive, legally sound approach to cell phone reimbursement. A clear policy, consistent application, and reasonable reimbursement model go a long way toward protecting both your workforce and your business.

Best Practices for Employers

To comply with California Labor Code § 2802 and reduce the risk of costly litigation, employers should take a proactive, structured approach to reimbursing employees for work-related cell phone use. This begins with adopting clear policies and implementing consistent reimbursement practices across the organization.

Drafting and Implementing a Clear Cell Phone Reimbursement Policy

A written policy is essential. It should outline when reimbursement is required, how reimbursement amounts are calculated, and what procedures employees must follow to request reimbursement. The policy should apply to all employees who use personal phones for business purposes, regardless of whether the use is infrequent or occurs only outside regular working hours. Importantly, the policy must comply with Cochran v. Schwan’s, meaning it should not require employees to prove additional costs were incurred in order to be reimbursed.

Flat Stipends vs. Usage-Based Reimbursement: Pros and Cons

Employers typically choose between two models: flat stipends or usage-based reimbursement. Each has advantages and tradeoffs:

• Flat stipends offer administrative simplicity and predictability. A set monthly amount (e.g., $30–$75) can be paid to eligible employees without requiring detailed records of their expenses. However, if the amount is too low, it may be deemed unreasonable and trigger legal exposure.
• Usage-based reimbursement more closely aligns with actual business use. Employees may submit phone bills or usage reports to determine the percentage of work-related activity. While this method may be more accurate, it also requires more oversight, and employees may resist sharing personal phone records.

Some employers adopt a hybrid model, providing a flat amount with the option to request additional reimbursement if documented work use exceeds the standard.

How to Document Work-Related Use

Although employers cannot require proof of increased cost, they can request a reasonable estimate of work-related usage. This may include:

• A signed acknowledgment that an employee regularly uses their phone for business purposes
• An optional breakdown of approximate business vs. personal use
• Occasional documentation, such as call logs or app usage, for employees requesting additional reimbursement

Documentation helps justify the amount of reimbursement and demonstrates that the employer made a good-faith effort to comply with § 2802.

Aligning Policies With Remote Work, Hybrid Models, and BYOD Programs

The rise of remote and hybrid workforces, along with bring-your-own-device (BYOD) arrangements, means that personal cell phone use for business is no longer the exception; it’s often the norm. Employers must revise outdated expense policies to reflect this shift.

Consider how employees communicate across departments, respond to after-hours emails, attend virtual meetings, and use company-required apps. If these tasks rely on personal cell phones, the policy should account for it. Avoid blanket exclusions or vague language that could create inconsistencies or imply that reimbursement is optional.

A well-crafted policy should apply equally to in-office and remote workers and be reviewed periodically as technologies, work models, and legal interpretations evolve. Working with an experienced employment law attorney can help you ensure your policy is well-written, thorough, and covers the necessary elements to guard your company from liability.

Integrating Cell Phone Reimbursement Into Broader Expense Policies

Rather than treating cell phone reimbursement as a standalone issue, employers should incorporate it into a comprehensive expense reimbursement framework. This ensures consistency and promotes organization-wide compliance.

Making Cell Phone Reimbursement Part of a Comprehensive Expense Policy

Your employee handbook or expense policy should include a section dedicated to communication tools, including cell phones and home internet. This helps ensure that mobile device use is treated with the same seriousness as travel, lodging, meals, or mileage.

Integrating phone reimbursement into your broader policy signals that the company understands its legal obligations and values employee fairness. It also streamlines oversight by placing all reimbursable expenses under one set of procedures and documentation standards.

Ensuring Compliance Across All Departments and Roles

Consistency is critical. Some employers only reimburse sales teams or field workers while overlooking office staff, remote employees, or lower-level personnel. This selective enforcement can lead to claims of unequal treatment or systemic noncompliance.

Every department should follow the same reimbursement framework, unless there is a clearly defined and lawful reason to differentiate. If distinctions are made, such as offering higher stipends to certain roles, they should be documented, reasonable, and consistently applied.

Training Managers and HR on Handling Reimbursement Requests

Frontline managers and human resources staff play a central role in enforcing expense policies. They need to understand the legal requirements outlined in § 2802 and be trained to handle employee inquiries and reimbursement requests in a manner that is compliant with these requirements.

Common issues that should be addressed in training include:

• When to approve or escalate a reimbursement request
• How to respond if an employee uses their phone unexpectedly for business
• What to do if an employee claims they weren’t aware of the policy

Training should be recurring, not just part of onboarding. It should also reflect current legal developments and internal policy updates. The most effective way to design training is to work with a skilled California employment law attorney.

Coordinating With Payroll and Accounting

Reimbursements must be processed efficiently and documented thoroughly. Employers should ensure that payroll and accounting teams understand how stipends or expense reimbursements are categorized and tracked. These departments should work together to ensure:

• Reimbursements are not misclassified as taxable income (unless improperly structured)
• Expense logs and receipts are stored and accessible in case of audit or litigation
• Payments are timely, especially for departing employees who may be owed final reimbursements

A collaborative system helps maintain compliance, provides transparency to employees, and prepares the company to respond swiftly to any dispute.

In short, integrating cell phone reimbursement into broader expense management creates a more reliable and legally defensible system. It also demonstrates a commitment to fairness and accountability: key values in California’s employee-centric legal environment.

How Chauvel & Glatt, LLP Helps Employers Stay Compliant

At Chauvel & Glatt, LLP, we help California employers navigate the evolving landscape of wage and hour compliance. Our employment law attorneys can:

• Draft or review cell phone and expense reimbursement policies
• Conduct internal audits to identify compliance gaps
• Defend against reimbursement-related lawsuits or PAGA claims
• Advise on best practices for managing remote and hybrid workforces
• Offer training for HR teams and decision-makers

Whether you’re a small business owner or a large employer, we tailor our services to your specific needs and risk profile.

Frequently Asked Questions (FAQs)

Q: Is reimbursement required if the employee doesn’t submit a bill?

Yes. Under California law, specifically Cochran v. Schwan’s Home Service, Inc., employers are obligated to reimburse employees for required work-related use of a personal cell phone. This is true regardless of whether the employee submits a phone bill or incurs additional out-of-pocket expenses. If the employer knows or has reason to believe that an employee is using a personal phone for business purposes, reimbursement must be provided. Waiting for the employee to request it or provide documentation is not a valid excuse for noncompliance.

Q: What if the employee doesn’t use their phone for work often?

Even minimal use for work purposes can trigger a reimbursement obligation. An employee who occasionally checks emails, takes a few work calls, or uses a required app still qualifies for compensation under Labor Code § 2802. While the reimbursement amount may be small in such cases, California law focuses on the existence of any required business use, not the frequency or cost. Employers should have a scalable approach that allows for lower payments in low-use situations without skipping reimbursement altogether.

Q: Can we offer a flat stipend instead of calculating actual use?

Yes, but the stipend must be reasonable and reflect the estimated cost of work-related phone use. Many employers opt to provide a fixed monthly reimbursement to simplify administration. This is legally permissible, so long as the amount reasonably covers the portion of the employee’s phone use that supports business activities. Suppose an employee challenges the adequacy of a flat stipend and can demonstrate that it does not cover actual work-related usage. In that case, the employer may still face liability. Offering a flexible policy that allows employees to request a higher amount with some form of support can help mitigate this risk.

Q: What records should employers keep to protect against claims?

Employers should maintain clear documentation to demonstrate compliance with reimbursement laws. Recommended records include:

• The written cell phone reimbursement policy
• Acknowledgment forms signed by employees
• Logs of monthly or periodic reimbursement payments
• Any estimates or forms submitted by employees regarding business use
• Internal communications or policies requiring the use of specific mobile apps or functions

Having this documentation readily available is crucial in defending against wage and hour or PAGA claims, audits, or employee disputes.

Q: Does this apply to contractors or only employees?

Labor Code § 2802 applies only to employees. Independent contractors are not entitled to reimbursement under this statute. However, misclassification is a common issue in California. If a contractor is found to be misclassified and is functionally acting as an employee, they may be entitled to back reimbursements. Employers should carefully evaluate their worker classifications to ensure that true independent contractors are not subject to the same level of control, duties, or expectations as employees. This includes the use of personal phones for company business.

Professional Legal Counsel for Employee Reimbursement Questions

The digital workplace has blurred the line between personal and professional device use. But under California law, the obligation to reimburse workers for work-related cell phone use is clear. Employers who fail to take action risk legal exposure and costly litigation.

At Chauvel & Glatt, LLP, we help employers get ahead of compliance issues and implement practical, defensible policies that protect both their business and their workforce.

Need help reviewing your reimbursement policies? Contact Chauvel & Glatt, LLP today to schedule a consultation with an experienced employment law attorney.

California continues to experience severe wildfire seasons, and this year is no exception. On September 4, 2025, the Division of Occupational Safety and Health (Cal/OSHA) issued Advisory No. 2025-89 urging employers statewide to take immediate steps to protect employees from exposure to wildfire smoke. This reminder comes at a critical time as smoke from multiple fires is affecting air quality across much of the state. For California employers, this advisory is more than a suggestion. It underscores existing obligations under Cal/OSHA’s Protection from Wildfire Smoke Standard and highlights the legal and practical risks of failing to prepare.

Why This Advisory Matters. Wildfire smoke contains fine particulate matter (PM2.5) that can cause serious health issues, including respiratory illness, eye and throat irritation, and long-term cardiovascular problems. Outdoor workers, such as those in construction, agriculture, and landscaping, are particularly vulnerable. Even indoor employees can be affected if workplaces lack proper air filtration. The advisory reinforces what the law already requires: when air quality reaches unhealthy levels, employers must act quickly to reduce employee exposure and provide protective equipment.

Key Employer Responsibilities. While the advisory does not create new rules, it emphasizes compliance with existing standards. Employers should pay close attention to the following:

• Monitor Air Quality
  Employers are expected to keep track of the local Air Quality Index (AQI), focusing on PM2.5 levels. Resources such as AirNow.gov or local air district websites provide up-to-date information.
• When AQI Reaches 151 or Higher
  At this level, air is considered unhealthy. Employers must:
  • Inform employees about the current air quality.
  • Train workers on the health effects of smoke and the protective measures available.
  • Relocate work to enclosed, filtered spaces when possible, or adjust schedules to reduce outdoor exposure.
  • Provide N95 respirators (or better) for voluntary use.
• When AQI Exceeds 500
  Air is considered hazardous, and respirator use is mandatory. Employers must implement a respiratory protection program that complies with Cal/OSHA requirements.
• Worker Protections
  Employees have the right to refuse unsafe work without fear of retaliation. Employers must respect these rights and ensure workers feel comfortable raising safety concerns.

Compliance Risks. Ignoring the advisory or failing to comply with the wildfire smoke standard can expose employers to significant consequences:

• Cal/OSHA Citations and Penalties for failing to provide protective equipment or monitor conditions.
• Workers’ Compensation Claims from employees who suffer illness or injury due to smoke exposure.
• Civil Liability and Reputational Harm if employees or the public view the company as disregarding safety during emergencies.

Practical Steps Employers Can Take. Employers should treat this advisory as a call to review and strengthen their wildfire smoke response plans. Recommended steps include:

1. Set Up Monitoring Protocols – Assign a manager to track AQI daily and record the data.
2. Communicate Regularly – Share air quality information with employees at the start of each shift.
3. Adapt Operations – Move tasks indoors, reschedule outdoor work, or limit time outside when conditions worsen.
4. Provide Respirators – Stock an adequate supply of N95 masks and distribute them promptly when AQI crosses the 151 threshold.
5. Train Workers – Educate employees on smoke hazards, respirator use, and their rights under Cal/OSHA.
6. Document Your Efforts – Keep records of AQI levels, training sessions, and protective measures implemented.

How Chauvel Law Can Help. At Chauvel Law, we work with employers to stay compliant with California’s complex workplace safety standards. Our team assists with:

• Drafting and updating wildfire smoke policies.
• Reviewing respiratory protection programs for compliance.
• Training supervisors and employees on safety responsibilities.
• Responding to Cal/OSHA inspections or citations.

California’s wildfire seasons are no longer rare events—they are annual challenges that demand preparation. Cal/OSHA’s latest advisory is a timely reminder that employers have both a legal duty and a moral obligation to safeguard their employees from hazardous smoke. By monitoring air quality, supplying protective equipment, and communicating openly with workers, employers can reduce risk while demonstrating a commitment to workplace safety. If your business needs guidance on how to prepare or respond to Cal/OSHA inspections, Chauvel Law is here to help.