This Policy establishes when the University will provide payment for employee use of mobile communication devices (MCDs) when required to support business activities of the University, along with related administrative requirements. It is drafted with the intention of complying with Internal Revenue Service (IRS) and other applicable statutes, regulations and guidance.
I. Policy Statement and Purpose
In general, the University does not purchase Mobile Communication Devices (MCDs) for personal use by employees, nor does it pay directly for employee service plans related to personal use of such devices.
In situations where employees’ job duties require the frequent use of MCDs for Substantial Non-Compensatory Business Reasons (see Section III.A.1), a nontaxable MCD allowance may be provided to employees for use of their personally-owned devices to accomplish University business. This MCD allowance program is maintained centrally by the Division of Business Affairs. Departments are responsible for determining, documenting, funding, and annually reviewing the business justification for MCD usage.
In limited situations, departments may choose to purchase University-owned MCDs for use by their employees if proper business justification exists. These devices must be managed by the issuing department.
For incidental business-related usage of personally-owned MCDs, employees who are not already receiving an MCD allowance and who are not issued a University-owned MCD may request reimbursement under the University’s normal business expense reimbursement procedures.
For the purpose of this Policy, the following definitions apply:
A. Mobile Communication Devices (MCDs) include cellular (“cell” or “mobile”) telephones (including cell phones with two-way “push-to-talk” communication capability), smartphone devices (e.g., iPhone, Samsung Galaxy S4), tablet devices (e.g., iPad, Samsung Galaxy Tab), PDAs, pagers, wireless cards, and any other device that enables mobile electronic communication and has associated service plan costs.
B. Departments refer to those units designated at the Level 4 Organization Code (“Org Code”) on the Banner Organization Code/Financial Manager Chart, as maintained by the Financial Systems Support department in Financial Services. Most Departments have sub-departments (Org Code Level 5) and also ‘roll up’ to a College or Administrative Unit (Org Code Level 3). See Supplemental MCD FAQs for examples of Departments.
C. Department Heads are those designated as the Department-level Financial Managers on the Banner Organization Code/Financial Manager Chart as maintained by the Financial Systems Support department in Financial Services. (Note that designated Financial Managers are not the same as “business managers.”) Department Heads usually hold positions at the Director, Department Chair, or Associate Provost level or higher. Department Heads maintain fiduciary responsibility for the funds within their Department and are responsible for ensuring that its Department’s financial resources are managed in accordance with University policies and the intended purpose of the funds.
1. Substantial Non-compensatory Business Reasons: Per OSBM Budget Manual §5.11.3, “Employee-owned Devices,” an MCD allowance may be provided only to employees required to maintain personal devices for “substantial non-compensatory business reasons.” Examples of required substantial non-compensatory business reasons include:
For employees who are required to maintain MCDs for substantial non-compensatory business reasons (which is to be judged and documented by each employee’s supervisor and Department Head), the University will allow the following allowances, subject to the related requirements:
2. MCD Service Allowance: The University will provide MCD service allowances in amounts that are structured to compensate employees for business use of their personal MCDs when employees incur service plan costs associated with the device. An appropriate allowance amount should be selected to cover only the employee’s anticipated business-related MCD service charges. MCD service allowances must be renewed each year per the Mobile Communication Device Supplemental Procedures (see Section IV).
In keeping with OSBM requirements, the University does not provide MCD equipment allowances to employees.
3. Allowance Amounts: The current standard MCD allowance amounts are set forth in the Mobile Communication Device Supplemental Procedures (see Section IV). These amounts are subject to change and are reviewed annually. Any exceptions to established allowance amounts must be approved by the Vice Chancellor for Business Affairs or his/her designee and by OSBM.
4. Required Approvals: Requests for, and any changes to, an MCD plan allowance must be approved by the employee’s supervisor and Department Head.
5. Documentation: To receive an MCD allowance, employees must submit specific documentation to the Human Resources Department as set forth in the Mobile Communication Device Supplemental Procedures (see Section IV).
Each time a request is made for an MCD allowance, the business justification for the allowance must be documented and approved by the employee’s supervisor and Department Head.
6. Public Records Law: Records that are made or received on an MCD in the transaction of public business, regardless of whether an allowance is made, are subject to the public records law N. C. General Statute Chapter 132. Employees are responsible for retaining MCD bills and statements in accordance with the Mobile Communication Device Supplemental Procedures (see Section IV).
7. Reimbursement for Additional Charges: Employees receiving MCD allowances may not otherwise be reimbursed for MCD-related charges. In addition, in accordance with OSBM Budget Manual §5.11.3, an employee receiving an MCD allowance may not be reimbursed for business or personal calls made while in travel status, unless an exception is requested and granted for international travel.
B. University-owned MCDs
In limited situations, Departments may determine that there is sufficient business need to maintain University-owned MCDs with associated service plans. Examples may include devices required to be shared by employees while on duty and data-collection devices needed for research purposes. If a Department wishes to purchase University-owned MCDs for use by their employees, the Department must comply with the Mobile Communication Device Supplemental Procedures (see Section IV) related to University-owned devices.
1. Required Approvals: The Department issuing MCDs must document the business justification for any University-owned MCDs and receive prior written approval from the Department Head and the Vice Chancellor for Business Affairs or his/her designee. This documentation must be maintained on file.
2. Documentation: Departments must retain records of all University MCDs and to whom they are assigned. All monthly statements and related information are subject to review by Internal Audit and must be retained by the Department in accordance with the University’s document retention policies.
This section is applicable only to devices with associated service plan costs. For devices without associated service plan costs, Departments should follow normal purchasing policies and procedures.
C. Reimbursement for Incidental Use of MCDs
For incidental business-related usage of personally-owned MCDs, employees who are not already receiving an MCD allowance and who are not issued a University-owned device may request reimbursement under the University’s normal business expense reimbursement procedures, as maintained by the Controller’s Office in Financial Services. Also refer to the Mobile Communication Device Supplemental Procedures (see Section IV) and OSBM Budget Manual §5.10.5.
D. Other Considerations Related to the Use of MCDs
1. Use of devices: Employees receiving an MCD allowance must provide the mobile number assigned to that device to their supervisor. Employees are required to keep the device available for business use during their work hours or as otherwise directed by their supervisor. Compensable offsite or after-hours work is prohibited for FLSA-subject employees unless expressly pre-approved by supervisors in advance of the work. For FLSA-subject employees who are deemed by their Supervisor to need an MCD for Substantial Non-Compensatory Business Reasons (see Section III.A.1 above), the Supervisor is advised to consult with Human Resources to determine if the employee should be paid for on-call status, in accordance with PIM Number 52, “On-Call Pay,” and to receive guidance on properly accounting for time worked outside of the normal business hours. The University is obligated to compensate FLSA-subject employees for all hours worked. Supervisors are responsible for ensuring that all timekeeping requirements are adhered to (see PIM Number 54, “Completing and Retaining Employee Weekly Time Records For FLSA Subject Employees”) and are advised to consider the financial impact of a FLSA-subject employee receiving an MCD (in terms of additional overtime and/or compensatory time obligations) prior to making such a request.
2. Security: All employees using an MCD for University business purposes are required to comply with the University’s information security policies, standards, guidance, and procedures related to mobile devices. See University Policy 311, Information Security and related standards and guidelines.
3. Motor Vehicles: University employees must comply with local and state regulations concerning the use of MCDs while operating a motor vehicle.
4. Research: Many research grants may not allow MCD-related expenses. Employees using MCDs in research under grants should check with Grants and Contracts Administration to confirm eligibility.
IV. Roles and Responsibilities
The Vice Chancellor for Business Affairs is responsible for implementing procedures supplemental to this Policy, setting forth appropriate allowance amounts and related administrative processes. Such procedures must comply with existing law, IRS regulations, and guidance from the North Carolina Office of State Budget and Management (OSBM) and The University of North Carolina. The supplemental procedures and related documents are as follows:
Responsible Office: Business Affairs