Take Away:

Confirm that you are paying your employees the correct wages, including the minimum wage and overtime.  First, make sure you are paying at least the new minimum wage rate of $9.00 per hour that went into effect on July 1, 2014.  In California, almost all employees must be paid at least the minimum wage rate.  There are some employees who are exempt from the minimum wage laws, such as outside salespersons.  Second, make sure your employees are properly classified as exempt or non-exempt from overtime laws.  Our team is available to evaluate your employees' possible exemptions from minimum wage laws and possible related classification issues to determine exemptions from overtime laws.

California Court of Appeal Decision Makes It Clear - Employers Must Reimburse Employees For Work-Related Cell Phone Expenses

The Cochran decision also relied upon Gattuso v. Harte-Hanks Shoppers, Inc. (2007) 42 Cal.4th 554, 559 (a case dealing with analogous automobile reimbursements), which held: "In calculating the reimbursement amount due under section 2802, the employer may consider not only the actual expenses that the employee incurred, but also whether each of those expenses was 'necessary,' which in turn depends on the reasonableness of the employee's choices." Gattuso, supra, 42 Cal.4th at p. 568.  In light of Gattuso, the ultimate issue in Cochran was: "Does an employer always have to reimburse an employee for the reasonable expense of the mandatory use of a personal cell phone, or is the reimbursement obligation limited to the situation in which the employee incurred an extra expense that he or she would not have otherwise incurred absent the job? The answer is that reimbursement is always required." Cochran, p.7.  Evaluation of the reasonableness of various personal cell plans must be left to the trial court upon review of the facts.   

Take Away:

If you require your employees to use cell phones for business-related purposes, you must reimburse employees for the reasonable expenses attributed to the business-related usage.  To protect employers from liability, we strongly reconmnmend having a written cell phone policy regarding cell phone usage and reimbursement.   Rynn & Janowsky's employment law team is available to assist you in creating a cell phone policy that is legally compliant.