By Jonathan Steele
July 31, 2023
Over the last few years, people have become increasingly reliant on their personal devices for work, including laptops, tablets and, of course, cellphones. Companies must take the next step in providing reimbursement for their employees personal deceive use. But where do businesses start? What options do companies have? Let’s set the stage and look through some examples.
Mark Scout is a salesman for a biotech company. When he isn’t taking meetings, researching prospects or reaching out to potential customers via email, he’s making calls. Even on a day where his schedule is booked, he’s still making a minimum of 10 calls.
Some of those calls are to team members or his supervisor, however most of them are outreach to either a prospect he’s walking through a deal or a potential customer he’s trying to open the door with. He also has email and the company’s messaging app on his phone so wherever he is, whatever time of day, he can respond to urgent messages on a moment’s notice.
No one can deny that Mark’s phone is essential to his work. But there are a number of ways a company can choose to support employees who use phones as much as Mark. Those options are no reimbursement, a cell phone reimbursement and a company-provided device. How does each of these impact Mark? Let’s start with no reimbursement.
The biotech business Mark works for does not offer him a cell phone reimbursement. The company’s policy on this is: if one department receives a reimbursement, then everyone will ask for one. Not wanting to appear to be playing favorites, the company believes it’s more equitable if no one receives a stipend. That decision is frustrating as Mark knows he works hard for the company, and most of his cell phone bill is for that work he does. It’s disillusioning that the company refuses to find a way to ensure he, and other employees in the company, are compensated appropriately for the business use of his phone.
Mark continues to work as hard as he did before he reached this conclusion, though now his attention is divided. Instead of focused solely on selling the company’s product, he’s also spending time talking with recruiters, looking for other employers who prioritize employee satisfaction. It isn’t long before Mark exits the company.
The biotech business Mark works for has decided to provide mobile phones to employees whose job role requires them. This means Mark now has two phones to manage. Depending on his operating system of preference, Mark may have some learning to do. But this does allow him to separate his personal and business lives easily.
How a company chooses to implement a company-provided device program has a serious impact on the amount of administration it requires.
The biotech business decided to provide employees with a cell phone reimbursement and Mark is delighted. Mark isn’t out searching for other jobs and believes the company made the right call. He’s in the mindset to stay focused on the job. What’s more, everything he needs is on his personal phone, the phone he’s familiar with and uses daily.
The company was hesitant to roll out the stipend, as sensitive business information on personal devices is cause for increased security concerns. But they found a “bring your own” reimbursement solution for their mobile workforce that provided satisfactory protection, even to employee devices. And, seeing the employee satisfaction with their cell phone reimbursement policy, the company decides to promote this in their recruiting efforts to provide a benefit that appeals to the emerging generation of workers. In fact, they’re considering reimbursing employees for the personal use of other assets, like home office, internet and more.
We walked through some of the benefits a cell phone reimbursement brings to both companies and employees. We also shared a few of the downsides of not reimbursing employees and the option of a company-provided device program. Every company is different, with needs specific to its size, industry and customer base. But, with cell phone reimbursements gaining popularity, it may be the best option for your company.
It’s important to acknowledge that there are a number of ways a company can roll out a cell phone reimbursement. Let’s take a look at what those are and the impact they have on both employers and employees.
Some businesses, understanding how vital employee devices are to their job performance, simply choose to cover the employee’s cellphone bill. Every month, employees submit their bills and employers pay them. This is an easy incentive, and you’d have a hard time finding an employee against this reimbursement. However, it is far more expensive than necessary, especially if employees only use their personal phone for business every once and a while.
Other businesses take the average cost of a typical phone bill, split that in half and send it to employees to pay for the business use of their personal phone. This option is the worst of both worlds. While it might not be as expensive as paying for an employee’s entire monthly bill, using an average across a broad base of employees means some will still be over-reimbursed. It also means there are some employees that will be under-reimbursed. It’s a better option than no reimbursement, but it lacks specificity.
Businesses that partner with Motus provide their employees with reimbursements that are specific to their job roles. This ensures that employees with more mobile-intensive roles and employees with less phone-focused duties will be reimbursed appropriately. What’s more, these reimbursements reflect changes in local cost differences.
Now, how can companies manage these policies?
Bring Your Own Device (BYOD) programs have sparked renewed interest as scalability and employee flexibility are increasingly driving strategic business decisions. BYOD is on the rise, now accounting for 56% of devices in the workplace. However, with the resurgence of personal devices in the workplace, security and cost control risks are also rising concerns. Effective BYOD programs rely on well-configured and managed mobile device policies to mitigate these risks.
Mobile device / BYOD polices define and establish guidelines for employee eligibility, proper device usage, restrictions and enforcement. Mobile device / BYOD policies also help ensure that employees who are using personal devices for business reasons are fairly, accurately and compliantly reimbursed for the business use of those devices. With changing labor laws and today’s continued shift to remote and hybrid work environments, this is critical.
Mobile device / BYOD policy is also necessary when planning and managing both MMS and hybrid programs. This enables companies to establish multiple policies to reinforce job-dependent eligibility and restrictions across each program. Additionally, companies can outsource their mobile device / BYOD policy to a managed mobility services provider.
Successful BYOD management starts with properly established mobile device policy. Internal BYOD programs often fail due to inconsistency or a lack of well-defined mobile policy. Policies prevent employees from using unmanaged devices to access corporate networks, applications and data, mitigating risk and protecting sensitive corporate assets. This is especially true when policies are configured to work with your mobile device management (MDM) systems.
Elements included in proper policy configuration include, employee qualification, exception rules, acceptable use, program management, and fair & accurate reimbursement. Beyond initial creation, consistent policy revision and updates are important for companies to consider when scaling to growing device programs.
Of course, polices aren’t effective without enforcement. Along with the day-to-day management, strong policies use a mixture of positive and negative reinforcement to drive home the importance of policy adherence. Every organization needs to decide what reinforcement points are right for them and ensure these points are properly communicated to employees.
Policy compliance can be driven by in-platform policy acceptance for all users and administrator accessible acceptance reporting. Lack of clarity on desired behavior and enforcement can result in added cost in addition to added administrative burden and security concerns.
Along with security concerns, there are also legal implications to be aware of. The growing adoption of Bring Your Own Device (BYOD) culture and lawsuits tied to under-reimbursing employees is high among them. Here are five recent lawsuits in which employees sued companies over cell phone reimbursement policies (or lack thereof).
Sometimes, you need to use your personal phone for your job. On August 12 of 2014, California ruled in favor of the plaintiffs in Cochran V. Schwan’s Home Service Inc, requiring employers reimburse employees for business use of their personal devices. This landmark case set the tone for several lawsuits to follow.
Similar to the case against Schwan’s Home Services, this lawsuit is specific to using personal devices and not being compensated for that time. On February 15 of 2019, ABM paid out $4.5 million to settle claims from staff who sued for compensation after allegedly being made to use their personal devices for work-related duties. Litigation began in 2014, so consider legal fees of five years when adding up the costs of this settlement.
This case, while not directly related to reimbursing employees for the business use of their personal assets, widens the interpretation of business use of personal devices. On February 4th of 2019, California’s second Appellate District Division 3 Appeals court reversed a decision in favor of the plaintiff. This case dealt more specifically with on-call employees having to phone in to find out if they needed to work a potential shift. But the decision impacts employers and will lead to a change in company cell phone reimbursement policies.
Companies have often relied on de minimis doctrine when arguing lawsuits. This essentially means “it’s so little, it doesn’t really matter.” Troester V. Starbucks Corp. set a new precedent with its decision in favor of an employee who performed tasks for the company after clocking out. Arguments like “my employees might use their phones for work, but not in a way that really matters/not long enough to be a measurable amount of time” hold less water when looking at this decision.
Plaintiffs brought a lawsuit against Morgan Stanley Smith Barney LLC for, among other things, labor law violation on May 14, 2018. Morgan Stanley came to the table with a $10.2 million settlement in June, which was agreed to, though the financial adviser plaintiffs in a similar case (Chen V. Morgan Stanley Smith Barney LLC) argued this is not enough to cover the associated claims.
As represented in the examples above, it doesn’t matter what industry your company exists in. Does your company have a cell phone reimbursement policy? Does it adequately compensate all your employees for the business use of their personal assets? If not, you could be violating labor laws. While many know California for its labor laws, those laws are expanding. States like Illinois have adopted similar laws and others have similar regulations in progress.
Your company can implement a BYOD policy that avoids unnecessary complexity, cost or time. But you certainly don’t want to leave your company exposed to the risks of being out of compliance with labor laws.
Companies can choose to handle mobile device / BYOD policies in-house. However, without the proper level of expertise, a BYOD policy can easily slide off the rails. What’s more, when handled in-house, management and enforcement of mobile policies can put unneeded strain on internal teams.
Effective BYOD programs should drive employee satisfaction and relieve administrative burden. With Motus BYOD, policy creation and management becomes virtually effortless for both program owners and internal IT teams. Whether scaling an existing policy and program, or creating one from the ground up, Motus can help mitigate risk and control costs across your BYOD program by consulting on policy best practices.
Cell phone reimbursements are an important and increasingly relevant factor in the workplace. From recruiting and retention to cost savings and boosted productivity, reimbursing employees for the business use of personal assets offers many benefits. And, as outlined above, Motus provides accurate reimbursements that reflect roles and functions, and are backed by relevant geographic data points. Looking to empower your employees with an equitable cell phone reimbursement? Learn more about the Motus BYO solution today.
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