The state of California is a very unusual place in many respects. Not long after I moved there in 2010, a coworker told me that I should think of it as another country that happened to use the same currency as the rest of the states in the US. This turned out to be a handy guideline for how I thought about many aspects of life there.
One of the unusual aspects of California is its labor law. Both because of legislative and judicial actions over the years, the environment for employers and employees in California is unique. There are things that are illegal in California that are OK most other places. For example, under California law, employers must carry over accrued vacation—they can’t institute “use it or lose it” policies for vacation accrual. In general, it’s probably fair to say that California labor law is more friendly to employees than to employers. One prominent California employment law firm says it thusly:
Employers face greater risks in employment discrimination cases in California because of the nature of California juries and because, unlike under Title VII, there are no caps on the compensatory or punitive damages a plaintiff employee may recover.
On August 15th, California did it again: the California Court of Appeal, Second Appellate District, ruled that employers that require employees to use their personal cell phones for work calls must reimburse employees. (The full decision is here if you’re interested). The case, Cochran vs Schwan’s Home Service, was filed by a Schwan’s employee who alleged that Schwan’s was violating section 2802 of the state labor code, which requires employers to reimburse employees for work-related expenses under certain circumstances. The court found that Cochran was right: Schwan’s was requiring him (and the other employees who joined his class action) to incur a work-related expense which they were not then reimbursing him; in other words, this was a fairly predictable result given the facts of the case.
The language of the central finding of the case is pretty interesting when you pick it apart. The court decision says:
The threshold question in this case is this: 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. Otherwise, the employer would receive a windfall because it would be passing its operating expenses onto the employee. Thus, to be in compliance with section 2802, the employer must pay some reasonable percentage of the employee’s cell phone bill. Because of the differences in cell phone plans and worked-related scenarios, the calculation of reimbursement must be left to the trial court and parties in each particular case.
Parsed simply, this means that any employer with employees in California has to pay some percentage of their California employees’ cell phone bills if they require work-related cellphone calls. I’m not a labor lawyer, but this seems fair from the “reasonable person” standpoint, in the same way that most people would expect an employer to reimburse them for work-related use of a personal car.
The decision raises a number of interesting questions:
- What’s a “reasonable percentage” of the bill? Elsewhere in the decision, the court says that it doesn’t matter whether the employees have unlimited or limited cellphone minutes; that doesn’t affect the value of “reasonable”—so what does?
- What does it mean to say that cellphone calls are “required” by the employer? Take your typical Exchange administrator. Her employer probably doesn’t have a written policy that says “you must use your personal phone for work-related calls.” But when someone from work calls her on Sunday morning to report a problem, or when she has to join a conference call from an airport lounge, is that “required” use? It sure seems that way to me, unless she has the option to refuse the call or to wait until an employer-provided device is available.
- What about data? I don’t have a phone on my desk at Summit 7; I use Lync instead. If I were a California employee, and required to use my phone to make or receive work-related Lync calls, would this decision still apply?
The last sentence I quoted above seems to indicate that, much like the Hobby Lobby decision, the court intends that these questions will be settled by new litigation, taking this decision into account. That should lead to fun times (although this decision could be reversed on appeal). No doubt some other states or localities have similar rules for employee reimbursements, so this precedent certainly could jump to other jurisdictions, too.
This article in CIO points out some technical solutions for employers; some work by tying into carrier billing and reimbursing the carrier or employee, while Good offers a solution that separates personal and business data use so they can be billed separately. These solutions will probably find traction at some employers, but there is a simpler solution: employers can issue (or pay for) devices for work use. Many companies do this already for positions that require customer contact; Microsoft and Dell both issue cell phones to many of their sales and field services employees. This model is well understood for computers, of course, since few companies expect employees to pay for their own desktop or laptop computer.
Another alternative, of course, is for employees to stop doing company work on personal devices altogether.
BAHAHAHAHAHAHA. I can’t believe I actually typed that. Of course that isn’t going to happen, as the vast majority of knowledge workers value the flexibility that BYOD offers far more than the incremental few dollars it costs them to use some of their data or cell minutes for their employer’s benefit.
While it’s tempting to claim that this decision, and the follow-on decisions that are likely to spring up in other venues, will make huge changes to the BYOD landscape, I think it’s important to remember that BYOD has really only been with us for a few years. We’re still working through the social and cultural norms around carrying a smartphone (What can you take pictures of? When is it OK to ignore the people you’re with to focus on your phone? What do you do when you get a work call while on a date?), and figuring out how to share the cost of a device whose purpose is shared is just part of that process. Meanwhile, if you live in California and use a cell phone for work, expect your paycheck to, eventually, get, perhaps slightly, fatter.