Everyone knows that cell phone use while driving must be “hands free” as of July 1, 2008, but many employers may be unaware of the potential liabilities created by the proliferation of cell phones and other electronic devices used by employees. While business owners and managers often are benefited by employees who make use of electronic devices off-site and after hours, employers should also be aware of the potential hazards that can arise when employees pick up that cell phone for work-related purposes.
Wage and Hour Implications of “Off the Clock” Cell Phone Use
Although the law is not new in this area, some employers may forget the potential wage and hour liability risks that cell phone use can have. As a reminder, under California law, all non-exempt employees must be paid overtime – at least time and a half of their regular rate of pay – for all hours worked over 40 in a workweek or eight hours in a single work day. Now consider an employee who regularly makes or receives work-related phone calls on their drive to or from work when they are technically “off the clock.” Although a ten minute conversation may not seem like a big deal, it can become a very big deal when multiplied over time. Assuming the employee is never compensated for his or her phone conversations, and should have been, the employer can be liable for unpaid wages under California’s Labor Code, plus waiting time penalties and penalties for violation of California’s “pay day” requirements. Simply put, California law can turn a relatively small wage payment violation into a potentially much bigger liability for the employer.
Employer Liability When Cell Phone Use Results in an Automobile Accident
Consider the same scenario as above – an employee is driving to or from work while talking on his cell phone – but this time the employee gets into an accident, and worse, injures someone else. First, the employee’s injuries may be compensable under the employer’s worker’s compensation policy. Second, and perhaps more importantly, the employer may be liable to the injured third party. An employer can be held liable for the acts of its employee when those acts occur in “the scope of employment.” Whether an employee is acting within “the scope of employment” depends on the facts, but if an employee is engaged in a work-related call while driving, this may create a problem.
And for those employers that think they are immune from such issues because they use independent contractors, consider the ramifications if the employer has inadvertently misclassified their independent contractor. The general rule is that a person is an independent contractor if the employer has the right to control or direct only the result of the work and not the “means and methods” of accomplishing that result. Whether a person has independent contractor status again depends on all of the facts, and if it turns out the employer is wrong, the employer can face substantial penalties (including, for example, penalties for missed contributions to social security, Medicare, and unemployment insurance, among others), not to mention potential liability for that car accident.
Minimize Potential Liability Exposure With Policies In Employee Handbooks That Are Published, Followed, And Enforced
It may not be possible to eliminate all of the risks associated with employee use of the myriad modern conveniences that allow us to work 24-7, but there are things an employer can do to minimize them. First, regarding the employee who talks on his or her cell phone at all hours, whether officially “off the clock” or not, make sure all employees regularly record all hours worked. Second, institute a policy that is outlined in an Employee Handbook, whereby employees must obtain prior approval for all overtime, including after-hours cell phone conversations. Even better, prohibit employees from making or taking such calls altogether, and enforce these policies by disciplining those who violate them. To avoid cell phone related mishaps while driving, employers can also add a clause to the policy that prohibits cell phone use while driving (except, for example, in the case of emergencies). With such well-defined and enforced policies on the employer’s books, the contingent liabilities arising out of after-hour use of cell phones, pagers, and the like can be minimized.
