Cellular Phone Policy and Procedures

Purpose

The IRS considers cell phones to be “listed property.” As such, it requires detailed record keeping (IRS Section 274(d) (4), including (a) the amount of the expense, (b) the time and place of call, and (c) 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 calls were mostly business calls. Receiving a taxable allowance for an individually owned cell phone removes this detailed documentation requirement.

Policy

The university will not own cell phones for the use of individual employees. Employees whose job duties include the frequent need for a cell phone may receive extra compensation, in the form of a cell phone allowance, to cover business-related costs. All other employees may submit infrequent business-related cell phone expenses for individual reimbursement.

Cell phones should not be selected as an alternative to other means of communication -- e.g., land-lines, pagers, and radio phones -- when such alternatives would provide adequate but less costly service to the university.

Beginning January 1, 2007, the University will no longer purchase any new cell phones, nor will any existing cell phone contracts be renewed or extended. The University will no longer make direct payments to cell phone providers, either by check, purchasing card, or any other means.

Procedures

I. Frequent Use of Cell Phones for Business Purposes

A. Establishment and Payment of Allowance

If a university employee's job duties include the frequent need for a cell phone, then the employee is eligible for an allowance to cover cell phone expenses. It may be requested using the Allowance Request Form. The request may be made any time during the fiscal year.

This allowance does not constitute an increase to base pay, and will not be included in the calculation of percentage increases to base pay due to annual raises, job upgrades, etc.

B. Determination of Dollar Amount of Allowance

The dollar amount of the cell phone allowance should cover the employee's projected business-related expenses. These expenses are the cost of basic equipment, and the cost of the employee's monthly cell phone plan. The plan chosen should be the least expensive that provides adequate business-related services. Upgrades to basic equipment (special cosmetic or technical features, etc.) or expected cell phone use unrelated to business cannot be considered. Determination of the dollar amount of the allowance is made at the department level, but must be within the guidelines and dollar limits established under this policy.

C. Use of Phone

The employee must retain an active cell phone contract as long as a cell phone allowance is in place. Because the cell phone is owned personally by the employee, and the allowance provided is taxable income, the employee may use the phone for both business and personal purposes, as needed. The employee may, at his or her own expense, add extra services or equipment features, as desired.

Use of the phone in any manner contrary to local, state, or federal laws will constitute misuse, and will result in immediate termination of the cell phone allowance.

D. Documentation and Review Requirements

The Allowance Request Form and a copy of the employee's most recent cell phone invoice must be submitted to Purchasing Services to initiate an allowance.

The Dean or Division Director is responsible for an annual review of employee business-related cell-phone use, to determine if existing cell phone allowances should be continued as-is, changed, or discontinued. Use the Allowance Change Request Form, and notify Purchasing immediately when employees with allowances leave the University.

E. Fees for Contract Changes or Cancellations

• If, prior to the end of the cell phone contract, a personal decision by the employee, or employee misconduct, or misuse of the phone, results in the need to end or change the cell phone contract, the employee will bear the cost of any fees associated with that change or cancellation.
• If, prior to the end of the cell phone contract period, a departmental decision (unrelated to employee misconduct) results in the need to end or change the cell phone contract, the department 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 department.

II. Infrequent Use of Cell Phones for Business Purposes

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. Such employees may request reimbursement for the actual extra expenses of business cell phone calls (but reimbursement for per-minute "air time" charges is limited to the total overage charge shown on the invoice, i.e., 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.

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