Pay up: The free ride is over for corporate BYOD

Some companies saw BYOD as a way to make employees pay to do their job, but a court ruling may end that abuse

No, BYOD has not been dealt a death blow by a California Court of Appeals ruling that says employers must reimburse a reasonable part of employees' cellphone bills when use of their personal phone is required to do their work. But it will kill the practice of using BYOD as an excuse to make some employees buy personal equipment and pay for personal cell plans to do their jobs.

Many companies -- maybe even the majority -- already either pay for cellphone plans or reimburse part of those plans for employees whose work requires them to use a cellphone. At those companies, BYOD is about a person being able to use a preferred device or to carry one device for personal and business needs (no matter who bought it), splitting the service cost with the company if that single device was a personal one. That's fair. (Corporate-issued devices have their plans fully paid by the company in such cases.)

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Then there are those employers who see BYOD as a Trojan horse strategy for shifting costs to employees. I've heard many, though not most, companies chirp about how they could save money by taking advantage of employees' desire for an iPhone, iPad, or Android device to stop paying for BlackBerrys or what-have-you. These companies also spoke of their dreams that one day employees would buy their own PCs, too, to do their work.

So, these cheap companies stop buying smartphones for their employees but tell them they need to be accessible by phone, forcing the employee not only to buy the device but pay the whole service cost. These companies would save money anyhow by letting employees buy their own devices if desired and splitting the plan cost. But they're so cheap, they want to pay for none of it, while still reaping the benefit.

These are the employers affected by the court ruling. As they say, as goes California so too goes the nation -- you can expect more states to follow this ruling.

The practical effect of the new ruling, which confirms several lower court rulings, is fairly minor, as it technically covers only voice plans, not data ones. But the principles will likely apply to data plans as well. The ruling also only affects employers that require employees use personal cellphones for work -- employees who choose to use their phones for work purposes, but aren't obligated to do so, are not entitled to a reimbursement.

Of course, the ruling's practical effect on abused employees is not as black-and-white as it first may appear. Many industries require employees to pay for materials they need at work. Requiring that employees pay for their uniforms is common, as is expecting teachers to buy their own classroom supplies. In a perverse bit of case law, the U.S. Labor Dept. says such costs should be considered an employer business expense, not an employee one. But in a 1960 federal case, U.S. v. Klinghoffer Brothers Realty, the Second U.S. Ciruit Court ruled that employers could deduct such costs from employees' income as long as the employees' income did not fall below minium wage as a result (which is why they take the cost of uniforms and so over several weeks) -- perverse, but true.

The Klinghoffer logic is the essential legal argument made to transfer the costs of required cellphone plans to the employee. That argument didn't fly in consumer-friendly California. But state courts aren't federal courts, and even in the federal system, no one has taken Klinghoffer to the Supreme Court. As a result, the legal waters remain technically unsettled.

What's likely to happen is that companies doing business across the United States will follow the California ruling, because following one (higher) standard ultimately costs less and is less risky than following multiple standards. Some employers will do just the letter of the law: Reimburse all or part of the phone portion of employee bills. Others will follow the spirit: Reimburse all or part of the whole bill, for both voice and data.

Of course, companies that want to be effective will have already put in place a sensible reimbursement program for employee activities such as using personal devices that make their business work better. They know that employees are the company, and making it easier to do better is a win-win for employer and employee alike.

It's sad that it takes court rulings to remind so many employers of that.

This article, "Pay up: The free ride is over for corporate BYOD," was originally published at Read more of Galen Gruman's Smart User blog. For the latest business technology news, follow on Twitter.

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