Do Employers Have to Reimburse Cell Phones?

When you owe a phone stipend (and when you don't)

Federal law usually does not require you to reimburse personal cell phones. The only broad federal rule is that required work costs cannot push pay below the federal minimum wage. If employees work in California or Illinois, required personal-phone use is a real reimbursement duty — even on unlimited plans. Montana, North Dakota, South Dakota, and New Hampshire also have broad expense rules; most other states do not.

If you never call, text, or route work apps through personal phones, and you issue company devices, you usually do not create a phone-use claim. If you expect people to answer personal numbers for jobs, dispatch, or client messages, treat that as required use in duty states.

How to stay out of trouble

• List every role that uses a personal phone for work calls, texts, or apps.
• In California or Illinois, set a written monthly phone stipend or pay a documented share of the bill this pay cycle.
• Unlimited data, family plans, and "no extra minutes" do not erase California duty.
• Prefer company phones when the job is fully phone-dependent and you want to avoid percentage fights.
• Track where people work — duty follows work location, not headquarters.

What usually blows up

• "They have unlimited data, so we owe zero" in California.
• Remote managers on personal phones with no stipend in California or Illinois.
• A quiet salary bump labeled "covers phone" with no clear reimbursement amount.
• Telling W-2 employees to "just deduct it" — that federal deduction path is largely gone.

Pay for required phone use in duty states

If the job needs a personal phone, write the rule and fund it where state law requires it. Start with California and Illinois, check whether anyone works in Montana, North Dakota, South Dakota, or New Hampshire, and keep a simple audit trail of who uses a phone for work and what you paid.