California (and Other states) Employees Reimbursement
Employee Reimbursement: Cell Phone and Internet Expenses (California Example)
Ignition gives you a choice in how you want your technicians to use the system.
You can provide them with devices and connectivity to use our Field iOS and Android Apps or you can choose to ask them to use their own personal devices similarly. In the latter case, there are a few regulations of which you should be aware if you operate in such States as California, Massachusetts and New York.
There is no federal requirement to reimburse employees for business-related expenses as of this writing.
However, several states (including California, the District of Columbia, Illinois, Iowa, Massachusetts, Montana and New York as of this writing) have state law addressing employee expense reimbursements. In California, Labor Code Section 2802(a) requires employers to “indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer….”
Of course, the mechanisms are not defined and your judgement is needed to decide what “reasonable percentage” means, but the main options may be:
- Reimburse for the actual voice/data costs incurred for business purposes, which requires employees to submit expense reports itemizing the costs of calls made for work purposes and the costs of data used for work supported with cell phone bills or other evidence of the costs (this is a time intensive process for employees and employers);
- Reimburse for a percentage of voice/data fees that reflects the amount of required business usage, and if a percentage or flat monthly amount is used, then allow employees to seek reimbursement for any additional costs incurred over the percentage or flat amount if the actual costs of business use exceed those amounts (this can be hard to determine given the number of different plans available); or
- Provide employees with a cell phone or tablet alternative for business use.
Once you understand your obligations, it seems best to set clear guidelines for your employees.
This can serve several purposes. A well-drafted device reimbursement policy can: (a) manage expectations about which business-related expenses may be reimbursed; (b) establish procedures employees must follow to be reimbursed; (c) set reasonable cost controls on employee business expenses; and (d) ensure that business expenses are appropriate.
You will want to discuss with your appropriate legal consultant or regulatory advisor to ensure you plans and policies are compliant with the applicable regulations.