September 10, 2014

BYOD Grows Up: California Ruling on Reimbursement

(Sponsor-Contributed Paper)

In August 2014, the California Court of Appeals ruled that if employees must use their personal cell phones for business, their employers should reimburse them for a reasonable amount of the resulting mobile expense.  

Here are the details of the ruling. 

You should ask your own legal team for their analysis. Below are what we see as best practices in other MobileIron customers.


This ruling won't slow the adoption of BYOD, but it does offer some insights about how to construct an appropriate BYOD program:

  • The company will have to provide partial reimbursement for monthly charges if a BYOD phone is used for work tasks.

  • The method of reimbursement can vary. Either a flat stipend or a percentage of the bill will likely be fine as long as the company has a reasonable rationale for why the reimbursement method was chosen and how it is reasonably designed to cover the employee's business use. This will be based on each company's individual circumstances and, at least for now, there is no bright line rule of what rationale is acceptable and what is not. 

  • The ruling does not require companies to track actual enterprise usage. This ruling is about policy, not technology.

Next steps:

If you already have a BYOD reimbursement plan, you should ensure that it is reflective of the amount of business use. We expect the courts to give companies leeway to fashion a reasonable reimbursement system because each company is different. Some examples:

  • If your employees are "on-call" and mobile phone access is crucial for them to do their jobs (e.g. field service engineer), then it could be reasonable to have higher reimbursement for them than for employees who are not expected to do any work outside of the physical office.

  • If half your sales team sells door-to-door and half your sales team sells over the desk phone, then it could be reasonable to have higher reimbursement for the mobile group and lower reimbursement for the desk group.

Keep your reimbursement plan simple, reasonable, and well-communicated.

Simple methods are easier for companies to operationalize and employees to understand, especially given the broad array of consumer voice and data plans in the market.

Overall BYOD strategy:

This ruling reinforces a central fact: A BYOD strategy should be built around choice, not cost.

The primary value of BYOD is to give employees the ability to use the technologies of their choice for work because this makes them more productive. There are some companies who view BYOD primarily as a way to offload mobile cost to the user, but that is not a recipe for success.

This new ruling says that employers will have to pay a portion of an employee's mobile monthly charge if that employer requires the use of that personal phone for work. This is what most corporate BYOD programs are doing today anyway. It's the right thing for the employer and the employee. Even if there is no formal mandate from the employer that employees use their personal phones for work, it is likely that reasonable reimbursement will be required if the job expects it. For example, employees might be expected to be always available after hours for customer support. To do this efficiently, those employees might need to share their mobile phone numbers. As a result, even without a formal written policy requiring the use of personal phones, reasonable reimbursement will likely be required.

BYOD is here to stay, and it is now maturing as both a program and as an approach to the adoption of new technologies.


Ojas Rege

1 Comment

This eBook might help you build your BYOD strategy in light of the California ruling.

MobileIron has deep experience in BYOD. MobileIron was the first EMM platform to support BYOD privacy policy and selective management, for which we were granted the U.S. patent in April, 2014. Sixty-eight percent of the attendees at our June 2014 global MobileIron user conference have implemented BYOD programs, so we have collected many best practices.

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