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Cellular Services Stipend Procedures
1. Purpose
Cell phones have become a common business tool, and employees required to travel and work outside the office need to be accessible for business reasons. The Internal Revenue Service Notice 2011-72 indicates that when an employer provides an employee with a cell phone primarily for noncompensatory business reasons, the business and personal use of the cell phone is generally nontaxable to the employee. The IRS will not require recordkeeping of business use in order to receive this tax free treatment. Therefore, the University will provide a stipend to defray the business-related costs of a personal cell phone to those employees determined to have a University business need for cellular service. The stipend is not intended to cover the entire cost of cellular services and is designed to cover approximately 75% of the cost of a basic plan.
2. General Provisions
For purposes of this procedure, cell phone service is any service used to make or receive wireless voice or data calls or interactions on the public cellular telephone networks and cell phones are any device capable of using the services provided by these networks. Devices include:
a. telephones allowing calls to be made and received with additional features including phone number directory, appointment calendar and calculator;
b. more complex devices allowing calls to be made and received while additionally providing text messaging, computer-synchronized directory and calendar data;
c. devices with telephone features and smart phone capabilities including fully synchronized contact databases, calendars, email and web browsing; and
d. computers with cellular phone network cards.
3. Determination of Eligibility
a. An employee’s need for a cell phone stipend will be determined based on the following criteria:
i. The employer needs to contact the employee at all times for work-related emergencies.
ii. The employer’s requirement that the employee be available to speak with students/other employees at times when the employee is away from the office.
iii. The employee needs to speak with students/other employees located in other time zones at times outside of the employee’s normal work day.
b. The University will provide a base reimbursement rate for cellular services at $30.00 per month for voice service only, $64.00 per month for voice and data services. This covers basic plan minutes and coverage.
Additional coverage beyond a basic plan requires justification as to the need for more minutes or coverage. Base reimbursement amounts will be reviewed annually.
c. To qualify for a cell phone stipend, an employee must complete the Cellular Services Stipend Authorization Form clearly detailing why a cell phone is a necessity in adequately performing his or her job duties. The
form must be approved by:
i. Employee’s direct supervisor
ii. Vice President for the employee’s department
d. Once approved, Payroll will notify the employee of the approved monthly stipend and will prepare the necessary payroll documents to initiate the payment.
e. Any additional coverage beyond the authorized coverage requires further justification as to the employee’s need for more minutes or coverage to meet his or her work obligations. If an employee can document that
he or she has for three consecutive months exceeded the approved stipend, the stipend plan for that individual will be adjusted.
f. Employees use their own equipment and select their carrier and plan. The University has a preferred vendor, but employees are not required to use that vendor.
i. The cell phone contract is in the employee’s name.
ii. Payment of the cell phone charges is the sole responsibility of the employee.
g. In rare cases, cell phone services can be directly paid by University funds(contact Procurement Services), if:
i. Devices are shared among individuals in a department and are not assigned to any one individual.
ii. Devices are turned in to the department at the end of work each day.
iii. Devices are not used for personal calls.
4. Payment of Stipend
a. All stipends will be added to the employee’s regular paycheck. Cell phone stipend payments are not paid retroactive. Cell phone stipends will be canceled when an employee changes position numbers. A new
authorization form will need to be completed, if the cell phone stipend is required for the new position. If your cell phone is paid with grant funds, a new application must be done each grant year.
b. The cell phone stipend must not exceed the plan price that the employee pays for the cell phone or the stipend becomes taxable.
5. Use of Device
a. The employee must retain an active cell phone contract as long as the cell phone stipend is in place.
b. Use of the phone in any manner contrary to local, state or federal laws constitutes misuse and will result in immediate termination of the employee’s cell phone stipend.
c. Employees are advised to use discretion when relaying information via cell phone as these wireless communications are not secure.
6. Documentation and Review
a. A copy of each employee’s approved Cellular Services Stipend Authorization Form and the employee’s related cell phone contract must be kept on file in the employee’s University departmental central office. These
files are subject to audit at any time by the Accounting Department or Internal Audit.
b. The Dean, Director, or department administrator is responsible for an annual review of employee business-related cell phone use to determine if each existing cell phone stipend should be continued, amended ordiscontinued.
7. Contract Changes or Cancellations
a. If for any reason an employee’s cell phone contract is changed or cancelled, the employee will bear the cost of any associated fees. This includes an individual’s decision to cancel the contract if his or her employment with the University ends.
Additional Information
To apply for a Cellular Phone Stipend, open the Cellular Phone Authorization Form (PDF) (located on the right, under Files) and complete it. Send the completed file to the Payroll Office, 2nd floor of Sparks Hall.
Please call the Payroll department at 270-809-4129 with any questions regarding the Cellular Phone Stipend form.
You may also wish to read the December 2011 Campus Communication - Cell Phone (PDF) located on the right, under Files.