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Background

Oglethorpe University is establishing a new policy for the use and reimbursement of cell phone and data service with voice devices, which will result in each user having both freedom of choice and personal responsibility for their cell phone or device plan. This policy also facilitates compliance with Internal Revenue Service (IRS) rules regarding the taxability of employee cell phones and devices.

The IRS considers cell phones to be “listed property.” As such, the IRS requires detailed record keeping 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, including all withholding and employer portions of taxes, even if the cell phone or device was mostly used for business purposes. The degree of effort for employees and the university required to comply with these regulations is onerous; therefore, Oglethorpe is converting to a program where each eligible employee will receive a taxable allowance for an individually owned cell phone or device. This change eliminates the detailed IRS documentation requirement.

Policy

The university will no longer own cell phones or devices for the use of individual employees. Instead, employees whose job duties include the frequent need for a cell phone or device may receive extra compensation, in the form of a taxable allowance, to cover business-related costs. Questions relative to this policy should be directed to IT Services at (404)364-8518.

Procedures

A) Allowance Request

If an employee's job duties include the frequent need for a cell phone or device, then the employee may be eligible for an allowance to cover associated expenses. To receive such an allowance, the employee must complete and submit either the attached Cell Phone Allowance Request Form or the Data Service with Voice Allowance Request Form (available on PetrelNet here).

Allowances will be paid each pay period as a stipend to the employee’s normal wages, and this monthly cost will be charged against the employee’s respective department payroll budget. The monthly allowance is taxable income.

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 or benefits based on a percentage of salary, etc.

Under this allowance program, employees will not be required to document monthly detailed usage logs for their cell phones or devices. Moreover, 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.

B) Allowance Approval Process

Supervisors and appropriate senior staff members must approve cell phone allowances.

Approval for devices that include a data plan must also have the approval of the Vice President for Business and Finance. The following criteria may serve as a guideline to identify an employee’s need for a cell phone or device and therefore eligibility for the allowance:

  • 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;
  • Work requiring frequent contact is required on a regular basis outside normal work hours;
  • The employee is required to be on-call 24 hours a day, seven days a week;
  • Job requirements include critical university-wide decision making.

Supervisors are responsible for an annual review of employee business-related cell-phone use to determine if existing allowances should be continued, changed, or discontinued.

The completed Cell Phone or Data Service with Voice Allowance Request (available on PetrelNet here) form should be submitted to IT Services for review and processing.

C) Termination of Existing University Mobile Accounts

During the transition to the new policy, Oglethorpe will be terminating all existing voice and data plans. Employees currently using a university-owned device and approved for an allowance will have the opportunity to transport their Oglethorpe mobile phone number to a private plan. Any applicable fees associated with terminating university accounts will be paid by Oglethorpe. Oglethorpe will not reimburse employees for early termination fees if employees decide, for whatever reason, to cancel any existing personal accounts. If they choose, employees can transfer their existing university phone device to their new private account.

D) Plan Allowance

Employees will be responsible for choosing their own voice or data plan as well as their carrier. Please note that only AT&T and Verizon provide reliable coverage on the campus and in the immediate vicinity. 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 business and personal 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 Oglethorpe 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. As described below, 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 a reimbursement every two years starting from the effective date of this policy for the purchase of a device as described in section (E). Because the employee is now personally responsible for the equipment, any replacement for loss or damage will be at the expense of the employee within the two year expected life span of the equipment. 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.

E) Determination of Dollar Amount of Allowance

The dollar amount of the allowance should cover the employee's projected business-related expenses. The allowance levels are the least expensive that provide adequate business-related services. Determination of the dollar amount of the allowance is made at the department level based on previous and/or projected usage for business purposes, but must be within the guidelines and dollar limits established under this policy.

Plan Monthly

Payment

One-Time Equipment

Cell phones:

450 Minutes

$42.50

$0

900 Minutes

$63.75

$0

1350 Minutes

$85.00

$0

Data Service with Voice:

450 Minutes

$74.50

$125

900 Minutes

$95.75

$125

1350 Minutes

$117.00

$125

Oglethorpe will pay only the approved allowance amount even if actual monthly costs may occasionally exceed the allowance. If the amount of the allowance subsidy needs to be changed because of documented business use, the immediate supervisor and/or the senior administrator will approve the change in the cell phone allowance and submit a new allowance form.

F) Support for Cell Phones or Devices

Support for cell phones and devices will be provided by the carrier. IT Services will provide consultation on the type of equipment to purchase, especially as it relates to devices that enable e-mail and calendar support. Employees who are approved for a data service device should go to:

http://www.oglethorpe.edu/administrative/information_technology_services/

From there, click on the Recommended Cell Phones option for a list of devices known to work with Oglethorpe’s Exchange server for e-mail and calendar functions. IT Services cannot support phones outside the recommended list purchased without prior consultation.

G) Fees for Contract Changes or Cancellations

If a university or departmental 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 by converting it to a personal account, change or cancellation fees will be reimbursed by the department.

If prior to the end of the cell phone contract, a personal decision by the employee (such as leaving the university) 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. However, the employee will be allowed to keep the cell phone equipment.

H) 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 an Oglethorpe 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 to be approved by his or her supervisor. Business calls while on campus should be made from traditional land-line phones, and therefore will not be reimbursed if made on a personal cell phone.

Note 1: IRS Section  274(d) (4)

Note 2: Reimbursement based on AT&T University discounted rate. Prices are subject to change.

Note 3: The One-time equipment purchase is based on a 2 year contract and is provided at time of new contract (documentation required). Lost or broken equipment will be the responsibility of the employee after initial purchase within the 2 year period.

Adopted July 1, 2009

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