California court ruling changes BYOD landscape

  • New California court ruling makes businesses responsible for employee expenses when using personal cellphones for work calls.
  • CIOs can reimburse their costs through a payroll stipend, expense report, or split billing.

A recent court ruling by the California Court of Appeal creates yet another headache for organizations implementing Bring Your Own Device (BYOD) programs. The Court of Appeal in Cochran v. Schwan’s Home Service stated, “We hold that when employees must use their personal cellphones for work-related calls, Labor Code section 2802 requires the employer to reimburse them.”

This case only covers telephone calls. But personal data and apps, as well as home WiFi use for work-related activities, may be soon to follow. According to a recent ABI Research blog on the ruling by analyst, Dan Shey, “The best tools will make it easy to separate personal voice and data services usage from business voice and data services usage.”

What are CIOs’ options?

In addressing this issue, CIOs will have two options to consider:

Payroll stipend.

Some employers offer workers a flat stipend as compensation for using their personal mobile device for work purposes. A stipend is one way to address the reimbursement issue. However, there may be tax consequences for both the employee and employer.

Expense report.

Completing an expense report is common business practice. Nonetheless, reviewing call and data usage records to decipher between personal and business use is tedious and leaves room for errors.

By 2020, 85 percent of organizations will adopt BYOD in some form.1 As this trend continues to mature, organizations will need to evolve their mobile enterprise management strategies beyond traditional device management solutions to a solution that is flexible enough to address new regulations governing BYOD policies.


1Gartner, “Defining BYOD Ownership and Support Expectation in Contracts Ensures Successful Implementation,” (April 2014)

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