Federal law does not require organizations to reimburse employees for business-related calls, texts, internet browsing, etc. that take place on their personal cell phones. However, the following states have laws that require organizations to reimburse their employees for the costs of obligatory job expenses, which may include cell phone use:
- California
- Illinois
- Iowa
- Massachusetts
- The District of Columbia
- New York
- Montana
When it comes to reimbursing business-related expenses, laws vary from state to state. Employers should always refer to the specific state laws in the location where the employee is working to understand the requirements for cell phones, phone systems, and other types of necessary reimbursement.
The Fair Labor Standard Act (FSLA) specifically requires that employers reimburse their employees for business-related expenses that drop their income below minimum wage. Minimum wage varies depending on the state in which an employee lives so it’s important to make sure that all company policies comply with those requirements.
For example, in California, the 2023 minimum hourly wage is $15.50, whereas, in Illinois, the minimum wage is $13.00 per hour. These rates are adjusted annually based on a specific formula.
The lines on employee reimbursement became blurred for many organizations during the COVID-19 pandemic in 2020 when the majority of the U.S. workforce began working from home. Since then, many companies pivoted to long-term remote work, and have needed to refresh their policies to comply with federal and state laws.
All organizations should have a firm grasp of reimbursement laws and regularly update company policies accordingly to remain compliant.
