Cell Phone and Data Service with Voice Policies and Procedures
Effective January 2009
For the purposes of this policy, the term cell phone or devices will include; cell phones, smart phones, two way communication devices with cell phone capabilities, internet data services, etc.
This policy is being implemented for Rider University employees who are currently reimbursed or have a University provided cell phone in order to comply with Internal Revenue Service (“IRS”) rules regarding the taxability of employee cell phones and similar devices.
Under IRS Code Section 274(d), the IRS considers cell phones to be “listed property.” As such, the IRS requires detailed documentation for every call placed on a University owned device, including the amount of the expense; the time and place of call; and the business purpose for the call. The IRS can declare that all undocumented use is personal and should be taxed as wages, even if the cell phone or device was primarily used for business purposes. The degree of effort required for employees and the University to comply with these regulations is onerous; therefore Rider will provide eligible employees with a taxable allowance for an individually owned cell phone or device and plan. This change eliminates the detailed IRS documentation requirement, which would require employees to provide detailed information on every cell phone call each month.
The University will no longer own cell phones or devices for the use of individual employees, with limited exceptions as defined below. Instead, employees whose job responsibilities include frequent business or emergency response need for a cell phone or device may receive additional compensation, in the form of a taxable allowance, to cover business-related costs. The allowance does not constitute an increase in base pay, and will not be included in the calculation of percentage increases to base pay for annual raises, job upgrades or benefits based on a percentage of salary, etc.
Under this allowance program, employees will no longer be required to document and submit monthly detailed usage logs for their cell phones or devices and employees will no longer have potential adverse tax consequences as a result of the use of a cell phone or device funded by the University. Since these phones will be the property of the employee, the phones and devices may be used for personal calls and be combined or enhanced with other personal plans.
The only exception where Rider will continue to provide and pay for cell phones and devices is for employees who require specific equipment or technology to perform university functions and never expect to use these phones for personal use. Exceptions must be approved by the Associate Vice President for Information Technologies and the Senior Associate Vice President for Finance and Controller, in consultation with the requesting employee’s Division Head. These individuals will be required to submit to the Disbursements Office monthly documentation in the form of a copy of their respective phone logs, agreeing to the monthly billing statement from the provider, verifying the business use for each call. Immediate supervisors will be required to approve all charges each month, attesting that all calls were business related.
Failure to keep current with this documentation requirement will result in the employee returning the phone or device to the University and cancellation of the University provided monthly plan. Rider reserves the right to switch any employee to the allowance program if excessive personal calls are made or if required documentation is not submitted in a timely manner. If a personal call inadvertently occurs, repayment of related charges must be made to the University prior to the next billing cycle.
If a University employee’s job responsibilities include frequent business or emergency response need for a cell phone or device, the employee may be eligible for an allowance to cover associated expenses. To receive an allowance, the employee must complete the Office of Information Technology Cellular Authorization Form and submit the form for approval to the Associate Vice President Information Technologies.
The allowance will be granted upon the approval by the respective Division Head, Associate Vice President for Information Technologies and the Associate Vice President for Finance and Controller. The following criteria may serve as a guideline to identify an employee’s need:
- Safety requirements indicate having a cell phone or device is an integral part of meeting the requirements of the job description.
- More than 50% of work is conducted off-campus.
- Required to be contacted on a regular basis outside normal work hours.
- Required to be on call (24/7).
- Job requirements include critical university-wide decision making.
Supervisors and Division Heads are responsible for an annual review of employee business-related cell phone and device use, to determine if existing allowances should be continued, changed, or discontinued.
Employees will be responsible for choosing their own voice or data plan as well as their carrier. The University has established the dollar amount for cell phone or data service taxable allowances at levels that should cover the employee’s projected business-related services and the incremental tax associated with this benefit. The current taxable allowance amounts are $75 per month and $135 per month for voice service only and for voice and data service, respectively. These amounts will be reviewed and adjusted annually, if necessary. Exceptions to the taxable allowance amounts based on service required to meet business needs will be reviewed and approved by the President’s cabinet.
Because the employee is now personally responsible for the account and the allowance provided is taxable income, the employee may use the account for both personal and business purposes. The employee may also, at his or her own expense, add extra services or equipment features as desired. The University does not accept any liability for claims, charges or disputes between the service provider and the employee.
Recipients of this allowance must notify their supervisor of the cell phone number and must continue to maintain the cell phone or device while in receipt of the allowance.
Employees will also be responsible for choosing their own equipment. There is no additional allowance for cell phones, since most carriers offer a number of phones free in connection with a new service plan. Employees approved for a data plan will receive an initial reimbursement for the purchase of a pre-approved and University supported device, as well as reimbursements for replacement devices based on evaluation of the device’s useful life. Because the employee is now personally responsible for the equipment, any replacement for loss or damage will be at the expense of the employee. Use of the phone or device in any manner contrary to local, state, or federal laws will constitute misuse, and will result in immediate termination of the allowance.
Fees for Contract Changes or Cancellations
If a University decision results in the need to end or change the cell phone or device contract, the University will bear the cost of any fees associated with that change or cancellation. For example, the employee’s supervisor has changed the employee’s duties and the cell phone is no longer needed for business purposes. If the employee does not want to retain the current contract, change or cancellation fees will be reimbursed by the University.
If prior to the end of the contract, a personal decision by the employee or employee misconduct/misuse of the phone results in the need to end or change the cell phone or device contract, the employee will bear the cost of any fees associated with that change or cancellation.
Reimbursement for Business Calls on Personal Cell Phone
If a University employee’s job duties do not include the frequent need for a cell phone, the employee is not eligible for an allowance or a University provided cell phone. Such employees may request reimbursement for the actual extra expenses of business cell phone calls. Reimbursement for per-minute “air time” charges is limited to the total overage charge shown on the invoice; expenses for minutes included in the plan will not be reimbursed. The individual should make personal payment to the provider, and then should submit a request for reimbursement. The reimbursement request needs to include documentation that verifies the business use for each call.