General Policy Statement
The purpose of this policy is to: a) define when an employee qualifies for payment of cellular business expenses, either through a supplemental compensation allowance or direct reimbursement; b) discontinue departmentally-owned cell phones that are exclusively used by one individual; c) transfer the ownership and responsibility for contracts and equipment from the University to the employee; and d) reduce administrative burden associated with processing these expenses.
Except for circumstances noted under "Special Situations", the University will no longer reimburse employees for on-going business expenses related to cellular devices (cell phones or Personal Digital Assistants with cellular capability (PDAs), such as Blackberry or Treo). Instead, University employees who meet the eligibility requirements will be given a predetermined amount of supplemental compensation to cover the approximate monthly cost of either a cell phone or cellular PDA, but not both. The eligibility requirements will determine which supplemental amount an employee will receive.
University employees who qualify for and receive supplemental compensation will be responsible for acquiring and maintaining their equipment. In addition, contracts entered into by qualifying employees will be personal contracts that are the responsibility of the employee, not the University.
For those who qualify, this policy authorizes a $65 monthly supplemental taxable compensation for cell phones, or a $130 per month supplemental compensation for cellular PDAs, such as Blackberry or Treo. The payments will be spread across pay periods. Employees who receive monthly supplemental compensation may not also receive reimbursements for any cell phone or cellular PDA expenses.
Departments and colleges are not allowed to establish policies that differ from this University wide policy.
Eligibility Requirements
The guiding principle for eligibility is that the use of a cell phone or cellular PDA by an employee is for the benefit of the University, rather than the convenience of the employee.
Specifically, University employees are eligible to receive supplemental compensation if they meet all of the following criteria:
- The employee's job requires him or her to be readily accessible for frequent contact with the public or with University faculty, staff or students; and
- The employee's job limits his or her access to regular land-line telephones that would satisfy the required business communication needs; and
- Monthly usage for business purposes is consistently:
- 67% or more of total contract minutes for a cell phone; or
- 90% or more of total contract minutes/data transfer for cellular PDA contracts.
The department should review prior billings to confirm monthly usage for initial and on-going eligibility.
Authorization for supplemental compensation must be reviewed and renewed annually and must be authorized by a Dean or VP or their designee.
Direct Billing of Employee Expenses
Departments may no longer allow employees to have their monthly cell phone or cellular PDA expenses billed directly to the University, such as via a University purchasing card. This is because of the administrative burden associated with providing sufficient business documentation for IRS tax purposes, as well as the desire to standardize the payment methods. Employees who have significant business use of cell phones or mobile technology devices should work with their managers to determine if they qualify for the monthly supplemental compensation.
Employees who do not qualify for the supplemental compensation may submit expense reimbursements for occasional, incremental business expenses. Incremental business expenses are those calls that result in additional costs that are above and beyond the employee's normal calling plan (e.g., excess minutes, roaming charges).
In all cases, the billing for expenses for non-departmental phones should be directed to the employee for payment.
Sponsored Funds
This supplemental compensation may not be charged to sponsored accounts. In instances where a PI or project has met all of the requirements, including budgetary and sponsor approval to direct charge cellular expenses as a direct expenditure on a grant, the PI or other research personnel should acquire a separate contract with a cellular vendor, and use the existing process of billing and charging the sponsor for these expenses.
Please note there are specific additional restrictions on the use of Sponsored Funds to pay for cell phone services. Contact your grant administrator for additional information.
Equipment Costs
This policy discourages departments from paying for cellular or cellular PDA equipment. Employees who are eligible for supplemental compensation are expected to absorb the cost of the equipment (most cellular carriers offer numerous contracts with free or low cost phones).
If, in a rare case, a department determines that the cost of the equipment poses a hardship on the employee, then the department should make a one-time taxable payment to the employee through the payroll system for the cost of the equipment. When applicable, these types of reimbursements may not be made more than once every two years. In all cases, the employee assumes ownership and all maintenance responsibility for the equipment.
Departments are not allowed to establish policies that differ from this University wide policy.
Special Situations
- Departmentally Owned Contracts
- Certain units may have special needs that justify departmental ownership of cell phones. Delivery drivers, maintenance personnel, custodians, security, parking ramp personnel and police officers are examples, where phones are assigned or rotated among employees. This would also include organizations that have multiple employees sharing a single cellular phone for on-call rotations. Faculty and staff may qualify for only intermittent and temporary use of departmentally owned cell phones, when the department determines there is a valid documented business need.
- Employees should not use departmental cell phones for personal calls.
- Pagers
- Some departments currently use pagers for their communication needs. Since the cost of pagers is very nominal ($3.50 per month) and because potential personal use does not pose a financial risk to the University, it is recommended that departments pay for pagers directly therefore eliminating the reimbursement of these expenses.
- Exceptions
- Employees who do not qualify for the supplemental compensation may submit an expense reimbursement request for occasional, incremental business expenses. Incremental business expenses are those calls that result in additional costs that are above and beyond the employee's normal calling plan (e.g., excess minutes, roaming charges).
- When requesting reimbursement, the telecommunication expenses incurred by employees must be additional (incremental) costs, and must be substantiated and documented with a copy of the bill in accordance with University policy and applicable federal and state laws and regulations.
- An example of a bona fide policy exception would be occasions where employees are traveling for University business and make calls to home or work that involve roaming charges. The University will reimburse those employees for their additional out of pocket roaming charges.
- International Expenses
- For employees that receive supplemental compensation, this policy allows for reimbursement of incremental expenses incurred when international travel is involved for official business calls and data transfer.
The purpose of this policy is to:
- Provide direction on what costs the University will pay for related to cellular phones and cellular PDAs.
- Explain what constitutes appropriate business use of cellular phones and cellular PDAs.
- Reduce administrative burden and transaction costs associated with frequent employee expense reimbursements.
- Ensure regulatory tax compliance relating to cell phones and PDAs. The current tax laws require documentation of all business use of cell phones and PDAs when paid for by the University. This policy will effectively remove this documentation requirement when a taxable allowance is provided to the employee rather than the University paying for these benefits directly. Accordingly, this policy will minimize the compliance risks associated with state and federal tax laws and regulations.
- Cellular Devices
- Those telecommunication devices that are mobile in nature (cell phone, cellular PDAs such as Blackberry or Treo). PDAs without cellular capabilities are not covered by this policy.
- University Employee
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- Responsible for equipment and cellular device contract payments.
- Responsible for properly documenting reimbursable expenses if not receiving supplemental compensation.
- Responsible for providing detailed cell phone bills for determining eligibility annually.
- Responsible for maintenance and security of cellular devices.
- Supervisory/Management Personnel
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- Determine, document, and recommend the initial and annual eligibility of employees to receive the supplemental compensation. Ensure updates to payroll are made for supplemental compensation, as appropriate.
- Review and approve individual reimbursement requests from non-qualifying individuals.
- Vice President or Dean (or designee)
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- Approval of all supplemental compensation allowances.
- University Auditors
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- Conduct periodic reviews for policy compliance.
- Amended:
- June 2008 - Policy completely revised to address the Enterprise Financial System rollout.
- Effective:
- April 2006
Created new policy to address Cellular Device Business Expenses. Allow for supplemental compensation for those who qualify, and clarifying conditions for employee reimbursements for business use of cellular devices (cell phones/Blackberries).
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