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To Reimburse or Not Reimburse for Cell Phone & Internet Use – Will A Case Against Amazon Change the Legal Landscape

One of the biggest claims we see in litigation by an employee is whether an employer reimbursed his employees for the worker’s cell phone bill.  This claim against the employer, even if not the main one in a lawsuit, is almost always alleged in wage & hour lawsuits and while a nuisance, can be extremely costly to the employer. Since the Covid-19 pandemic, California’s workplace has changed, and a large portion of the workplace is remote.  As the workplace changes, what constitutes a business expense is also changing.  Now, the cell phone reimbursement has expanded to apply to internet use, electricity and other costs associated with working from home. And for employers, this is a challenge to understand and what qualifies as such an expense.

Many employers frequently ask me why does my business have to cover such an expense if the employee already has a cell phone, or already pays for their internet.  Answer? Because in a 2014 case Cochran v. Schwan’s Home Service Inc., (“Cochran”) the California Court of Appeals interpreted the law to require companies to reimburse its workers for some reasonable percentage of their cell phone bills if they are required to use it for work related calls. This law still holds true today.  

But just last week, February 9, 2023, a California Federal Judge is questioning whether employers should have to pay for these costs – and is it really a business expense.  In a case against Amazon.com Services, an employee filed both a class action and a PAGA (Private Attorneys General Act) suit seeking damages for expenditures, including internet and electricity, claimed needed to do his job from home when the offices were closed. While there are several issues in the case put forth by both parties, the court has raised skepticism on the employer’s obligation for reimbursement.  

This case is one to watch.  The outcome of this federal case is one that the employment lawyers at Chauvel & Glatt will be tracking and keep you updated on.   Of course, it could take years before we know what the district court decides – and how it might impact state law.   California employers still must properly reimburse their workers for business expenses – are you? If you do not, or do not know, avoid the excessive damages that could result of failure to pay for business costs.  Please contact the experienced Employer Lawyers at Chauvel & Glatt today. 

This material in this article, provided by Chauvel & Glatt, is designed to provide informative and current information as of the date of the post. It should not be considered, nor is it intended to constitute legal advice.  For information on your particular circumstances, please contact  Chauvel & Glatt at 650-573-9500 for legal assistance near you. (photo credit: depositphotos.com).


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