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MOBILE COMMUNICATIONS AND HOME COMPUTING POLICY
Policy Statement
This policy outlines Northwestern University’s mobile communications and home computing
policy. This policy is based upon the current Internal Revenue Code, its regulations and related
guidance issued by the Internal Revenue Service (IRS), specifically addressing whether the
provision of mobile communication services and devices are taxable benefits to the employee.
The determination of whether an employee is eligible to receive a University owned mobile
device and communication services, or is eligible to be reimbursed for expenses associated with
mobile devices and communication services, is assigned to the officials of their school or
department. It is entirely within the discretion of a school or unit to determine whether there is a
business need and funds available to support any expenses associated with mobile devices.
The determination of whether any mobile device or communication plan reimbursement or
allowance is a non-taxable benefit is also assigned to the school and unit. In order to exclude the
value of devices and services from taxes, the school or unit must document a Substantial Business
Reason (SBR). The definition of SBR is:
The employer’s need to contact the employee at all times for work-related emergencies;
The employer’s requirement that the employee be available to conduct University business
when the employee is away from the office; or
The employee’s need to conduct University business with individuals located in other time
zones outside of the employee’s normal work day.
The applicability of these criteria to each employee receiving reimbursement or an allowance on a
non-taxable basis must be documented annually and specifically with respect to the duties and
responsibilities of each employee. A general business need to remain in contact with the
University or monitor ongoing communications related to one’s duties is not a sufficient standard
for exclusion from taxes. In the absence of specific evidence that the employee’s job duties meet
the definition of SBR in order to fulfill their responsibilities, the presumptive standard is that all
reimbursements and allowances for mobile devices and plans will be taxable to the employee.
Employees are not permitted to receive both an allowance and a University-owned mobile
communications device.
Schools and units bear the burden of demonstrating an employee’s SBR for the mobile
communications and should exercise caution in extending nontaxable allowances. Inappropriate
Responsible University Officials:
Senior Associate Vice President for Financial
Operations and Treasurer, Controller
Responsible Office:
Office of
Financial Operations
Orignation Date: January 1, 2009
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characterization of a taxable allowance as nontaxable may result in additional taxes and penalties
applied to the school and unit.
Mobile communication expenses are not normally allowable on research grants. Please consult
the Office of Sponsored Research to determine whether any exceptions are allowable per the
terms of a specific sponsored agreement.
University employees must comply with local regulations concerning use of a mobile device
while operating a motor vehicle.
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Reason for Policy/Purpose
The Internal Revenue Code, regulations and IRS require certain due diligence in situations where
the University purchases or provides funds for an employee mobile device that supports personal
in addition to business use.
Table of Contents
Mobile Communications and Home Computing Policy ....................................................... 6
Additional Pay Request for Nontaxable Allowances ............................................................ 6
Preferred Vendors for Mobile Communication Devices and Plans ....................................... 6
1. Approved Mobile Communication Reimbursement Options ....................................... 7
a) Nontaxable Allowance for Employee-owned Device and Service Plan .................. 7
b) University-owned Device and Service Plan ........................................................ 8
c) Taxable Allowance for Employee-owned Device and Service Plan ....................... 8
d) Reimbursement for Business Use of a Personal Device ....................................... 9
2. Approved Mobile and Home Computing Reimbursements ......................................... 9
a) Multi-functioning Mobile Devices ..................................................................... 9
b) Internet Connectivity – Travel ........................................................................ 10
c) Home Office Expenses ................................................................................... 10
1. Employee-owned Mobile Communication Devices/Plans with a Nontaxable
Allowance .................................................................................................. 11
a) School or Department Authorization and Approvals ..................................................... 11
1) Authorization Based on Employee Job Duties .................................................. 11
2) Not Based on Employee Title or Position ......................................................... 11
3) Annual Review of Departmental Needs ........................................................... 11
4) Signed Agreement ......................................................................................... 11
5) Allowance Amount ........................................................................................ 11
6) Discontinuation of the Additional Allowance ................................................... 12
7) Documentation/Audit Requirements ................................................................ 12
b) Recommended Vendors ................................................................................................ 12
1) Recommended Vendors for Devices and Service Plans ...................................... 12
2) Other Approved Devices/Plans ....................................................................... 12
c) Employee Responsibilities ............................................................................................. 12
1) Select and Purchase Device/Plan ..................................................................... 12
2) Provide Department with Phone Number ......................................................... 13
3) Provide Bill for Verification of the Allowance Amount and Usage ..................... 13
4) Comply with Contractual Obligations .............................................................. 13
5) Employee Responsibility for Care of Device .................................................... 13
6) Notify Department of Inactivation, Loss or Theft .............................................. 13
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d) Employee Allowance .................................................................................................... 13
1) Based on Business Need................................................................................. 14
2) Monthly Nontaxable Allowance, Reimbursement ............................................. 14
3) Initial Device Purchase and Device Upgrade .................................................... 14
4) Wages and Ownership ................................................................................... 15
5) University Control of Allowance ..................................................................... 15
e) Fees for Contract Changes or Cancellation ................................................................... 15
1) Employee-initiated Change or Cancellation ...................................................... 15
2) University-initiated Change or Cancellation ..................................................... 15
2. University-owned Mobile Communication Devices/Plans .......................................... 15
a) Authorized University-owned Devices ........................................................ 16
1) Devices Restricted to University Business Use or Included in Pooled Service
Plans ............................................................................................................ 16
2) Devices Required for Effective University Operations ....................................... 16
3) Departmental Shared Devices ......................................................................... 16
b) Annual Departmental Review and Documentation of Business Need ........... 17
c) Departmental Responsibility for Cost and Contract Obligations ................. 17
d) Documentation/Audit Requirements .......................................................... 17
e) Employee Responsibility to Reimburse the University for Personal Use ...... 17
f) Recommended Vendors ............................................................................. 17
3. Employee-owned Mobile Communication Devices/Plans with a Taxable
Allowance ................................................................................................ 18
a) School or Department Authorization and Approvals ............................................... 18
1) Authorization ............................................................................................... 18
2) Discontinuation of Additional Compensation ............................................... 18
3) Documentation/Audit Requirements ........................................................... 18
4) Signed Agreement ...................................................................................... 18
b) Recommended Vendors ............................................................................................ 18
c) Employee Responsibilities ........................................................................................ 19
1) Select and Purchase Device/Plan ............................................................... 19
2) Provide Department with Phone Number .................................................... 19
3) Provide Bill for Verification of Allowance Amount and Usage ..................... 19
4) Comply with Contractual Obligations .......................................................... 19
5) Employee Responsibility for Care of Device ............................................... 19
6) Notify Department of Inactivation, Loss or Theft ......................................... 19
d) Employee Compensation .......................................................................................... 19
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1) Monthly Taxable Allowance ........................................................................ 20
2) Initial Device Purchase and Device Upgrade .............................................. 20
3) Wages and Ownership ................................................................................ 20
4) University Control of Compensation ............................................................ 20
e) Fees for Contract Changes or Cancellation ............................................................. 20
4. Business Use of a Personal Mobile Device ........................................................ 21
Nontaxable Allowance Amounts ....................................................................................... 22
Annual Mobile Communications Agreement for Employee-owned Devices and Service Plans
with a Nontaxable Allowance ..................................................................... 23
Annual Mobile Communications Agreement for University-owned Devices and Service
Plans.......................................................................................................... 24
Annual Mobile Communications Agreement for University-owned or Employee-owned
Devices and Service Plans with a Taxable Benefit ....................................... 25
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Who Approved This Policy
Provost
Executive Vice President
Who Needs to Know This Policy
Employees who use mobile communications and home computing to support business activities
of the University.
Website Address for this Policy
The Mobile Communications and Home Computing Policy and Procedures are located on the
Financial Operations website http://www.northwestern.edu/financial-operations/policies-
procedures/policies/MobileGuidelines.pdf.
Contacts/Responsibilities
Mobile Communications and Home Computing Policy
Amanda J. Distel
Senior Associate Vice President of Financial Operations and Treasurer
847-491-7350
E-mail: [email protected]
Additional Pay Request for Nontaxable Allowances
Payroll & Records
847-491-7362
Preferred Vendors for Mobile Communication Devices and Plans
Purchasing & Strategic Sourcing
847-491-8120
E-mail: [email protected]
Definitions
de minimis
So small or minimal in difference that it does not matter or the law does not take it into
consideration.
Internet Service
Internet service is considered a common utility service purchased for personal use and is not
reimbursable unless it meets one of the following conditions:
Is essential to the employee’s job duties and cannot reasonably be fulfilled with campus
resources
Meets reasonable accommodations tests for those special cases governed by the
American Disabilities Act
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Mobile and Home Computing
Mobile computing includes laptop computers, Internet connectivity – home and travel, and
home computing.
Mobile Communications
Mobile Communications include:
Cellular or mobile telephone including prepaid devices/plans
Personal Digital Assistants (PDAs)
Smartphones, iPhones
Related service plans, such as texting, Internet, email access, and group calendaring
University Business Use and Substantial Business Reason
Primarily for noncompensatory business purpose, as specified by the IRS Notice 2011-72,
means there are substantial business reasons for providing the employee with a mobile device
other than providing compensation to the employee.
Per the IRS, such business use (Substantial Business Reason) should be consistent with the
following examples: the employer’s need to contact the employee at all times for work-related
emergencies, the employer’s requirement that the employee be available to conduct University
business when the employee is away from the office, or the employee’s need to conduct
University business with individuals located in other time zones outside of the employee’s
normal work day.
General business use is specifically in support of, but not limited to, use in scholarly, research,
academic, and clinical activities and in business operations supporting these activities.
Policy
1. Approved Mobile Communication Reimbursement Options
There are four IRS-compliant options for reimbursement of mobile communication charges
as follows:
a) Nontaxable Allowance for Employee-owned Device and Service Plan
Schools or units can provide a nontaxable allowance for mobile communication devices
and service plans if there are Substantial Business Reasons necessitating their use.
No record keeping of business and personal calls is required for IRS or central
University purposes. However, record keeping requirements or review procedures may
be established at the school or unit level.
The dollar amount of the mobile communications nontaxable allowance should cover
the employee's anticipated business-related expenses. The cost of basic equipment and
the employee's use related to University business should be considered when
determining the nontaxable allowance amount. Equipment upgrades, such as special
cosmetic or technical features, or expected equipment usage unrelated to University
business use must not be considered. Determination of the dollar amount of the
nontaxable allowance is made by the school or unit taking into account the guidelines
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and dollar limits established in this document. The mobile communication bill must be
included with the Annual Mobile Communications Agreement to substantiate the
allowance amount.
The maximum allowable mobile communications device and service plan nontaxable
allowance to support mobile communications service appears in Appendix A of this
document. This amount is subject to change and will be reviewed annually. Any
exceptions to this amount must be approved by the appropriate Dean, Vice President or
his/her designee.
The department head must review business needs and allowance amounts annually.
Following such annual review, the Annual Mobile Communications Agreement for
Employee-owned Devices must be completed by the department head, and the
department head and employee must sign the Agreement. See Appendix B.
Additional Pay Request forms must be submitted to Payroll to establish a recurring
monthly nontaxable allowance for a service plan or, as needed, a nontaxable allowance
for the purchase of a communications device.
See the procedures outlined in the Mobile Communications Procedures section of this
document.
b) University-owned Device and Service Plan
Schools or units may pay for an employee’s mobile communications device, service
plan, and/or tablet device (e.g. iPad) only if there are Substantial Business Reasons
necessitating their use.
Any personal use of the University-owned device will be treated as a de minimis fringe
benefit. However, the unit’s management should review the bills monthly to note
significant variances in charges.
The department must review business needs annually. Following such annual review,
the department head must complete and sign the Annual Mobile Communications
Agreement for University-owned Devices. If applicable, the employee must also sign
the Agreement. See Appendix C.
c) Taxable Benefit for University-owned or Employee-owned Devices and Service
Plans
If the definition of Substantial Business Reason is not met for the mobile
communication devices and service plan or if a tablet device (e.g. iPad) is needed, a
department may, at its discretion, elect to provide a University-owned mobile
communications device and/or tablet device or an allowance for the employee’s mobile
communications device, service plan and/or tablet device. Because the Substantial
Business Reason criteria are not met, the value of the University-owned device or the
allowance is a taxable benefit and must be recorded as taxable compensation on the
employee’s W-2 form.
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No record keeping of business and personal calls is required for IRS or central
University purposes. However, record keeping requirements or review procedures may
be established at the school or unit level.
The maximum allowable mobile communications device and service plan nontaxable
allowance to support mobile communications service appears in Appendix A of this
document. This amount is subject to change and will be reviewed annually. Any
exceptions to this amount must be approved by the appropriate Dean, Vice President or
his/her designee.
The department head must review compensation amounts annually. Following such
annual review, the Annual Mobile Communications Agreement must be completed by
the department head, and the department head and employee must sign the Agreement.
See Appendix D.
Additional Pay Request forms must be submitted to Payroll to record the taxable benefit
for the University-owned devices or establish a recurring monthly taxable allowance for
a service plan or, as needed, a taxable allowance for the purchase of a communications
device.
d) Reimbursement for Business Use of a Personal Device
If there is business use of a personal mobile communications device but not Substantial
Business Reasons for the device and the employee therefore does not qualify for a
nontaxable allowance, the employee may submit reimbursement requests for business
use of a personal device that causes the employee to exceed his/her base service plan
and incur additional charges. A copy of the service plan bill, detailing the business-
related individual calls and roaming (out-of-area) charges must accompany the
reimbursement request. Any excess usage which results in charges above the base
service plan is reimbursable.
See the travel policy for reimbursement of phone calls while on business travel.
2. Approved Mobile and Home Computing Reimbursements
a) Multi-functioning Mobile Devices
The standard is for the University to provide one computer device (either an onsite
desktop personal computer or a laptop with an onsite docking station), based on the
employee’s business need by role/function. For ongoing need for portability, a school
or department may provide a laptop with a docking station as a standard office
computing platform.
If need for a multi-functioning mobile device (such as a laptop or tablet) is occasional or
temporary, a department may provide the device to a faculty or staff member during a
particular period, such as for presentations, limited travel or weekend or evening work at
home, as needed. The occasional or temporary use of the multi-functioning mobile
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device should be limited solely to business use and such limited use should be
documented by both the unit and the employee.
Units are not obligated to provide multiple computers, mobile communications devices,
or multi-functioning mobile devices to accomplish a business purpose. Due to the
financial cost, substantiation burden, and security concerns, it is recommended that units
exercise caution in extending multiple computers and devices. Beyond one computing
device, one mobile communications device and one tablet, it is the presumption that the
additional computer or device is a taxable benefit. Exceptions apply to desktop personal
computers issued for University business use that remain on University premises.
b) Internet Connectivity – Travel
See Travel Policies & Procedures at http://www.northwestern.edu/financial-
operations/policies-procedures/policies/travel.pdf
c) Home Office Expenses
The University provides campus office space, furnishings and computers as required for
faculty and staff job duties. Home office expenses are not reimbursable except as
necessary to meet reasonable accommodations tests for those special cases governed by
the American Disabilities Act.
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Procedures
1. Employee-owned Mobile Communication Devices/Plans with a Nontaxable Allowance
a) School or Department Authorization and Approvals
1) Authorization Based on Employee Job Duties
Schools and departments are responsible to determine the budgetary impact of this
program, and to determine whether or not an employee's job requires the use of a
mobile communications device for Substantial Business Reasons. The University
allowance for the purchase of personally owned devices and service plans must be
directly linked to the employee's job duties and responsibilities.
Authorization procedures are documented in the Annual Mobile Communications
Agreement for Employee-owned Devices, Appendix B.
2) Not Based on Employee Title or Position
The University allowance for employee-owned communication plans is not to be
based on a particular title or position. Use should be based on the actual job
requirements of a faculty or staff member. For example, an individual with a
"Computer Administrator" title may perform his/her work entirely in the field and/or
may be on call after hours. Department heads are responsible for determining when
mobile communications services are warranted.
3) Annual Review of Departmental Needs
It is the department head's responsibility to review mobile communication needs in
his/her department on at least an annual basis to determine if any monthly allowance
amounts should be changed or discontinued.
4) Signed Agreement
Each year, following the annual review of departmental needs, the department must
complete an Annual Mobile Communications Agreement for each authorized
employee, outlining the Substantial Business Reason, device and service plan
requirements, and allowance. The employee and the department head must sign the
completed agreement.
See Appendix B of this document, Annual Mobile Communications Agreement for
Employee-owned Devices.
5) Allowance Amount
Department heads are responsible for determining and approving the appropriate
allowance amount for an employee based on job responsibilities. The determination
should include the appropriate device and service plan with consideration of number
of plan minutes, long distance calling options, and other plan features that are
required for the performance of the employee's job responsibilities.
For current guidelines, see Appendix A, Nontaxable Allowance Amount.
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The approved allowance amount must be documented in the Annual Mobile
Communications Agreement for Employee-owned Devices, Appendix B. The
mobile communication bill must be included with the Agreement to substantiate the
allowance amount.
6) Discontinuation of the Additional Allowance
The department should notify Payroll immediately if the allowance is to be
discontinued. Notification can be made by modifying the End Date on a copy of the
original Additional Pay Request and submitting the modified form to Payroll
specifying that additional pay should be discontinued.
7) Documentation/Audit Requirements
For employee-owned devices and plans, copies of the approval forms/ agreements
used to process the University allowance, as well as receipts or other valid evidence
of device purchases and service contracts, must be retained for eight years for
internal or external audit purposes.
b) Recommended Vendors
1) Recommended Vendors for Devices and Service Plans
Departments and employees should, where possible, purchase mobile
communication devices and service plans that are available from approved vendors
participating in University preferred vendor programs. In most cases, contracted
discounts are available to employees. However, the employee discount amounts
may vary, depending on the selected vendor. Check the Purchasing & Strategic
Sourcing Web Site at
http://www.northwestern.edu/procurement/purchasing/purchasing-strategic-
sourcing/index.html for preferred vendors.
2) Other Approved Devices/Plans
Notwithstanding the Recommended Vendors section above, an employee may
purchase any communication device or service plan that meets the job requirements
specified by the department head, regardless of price. However, the employee will
be responsible for any additional expenses above the University allowance approved
by the school or department.
c) Employee Responsibilities
1) Select and Purchase Device/Plan
The employee is responsible for the selection and purchase of a device and
enrollment in an appropriate mobile communications service plan. The plan must, at
a minimum, cover the requirements identified and approved by the department
head. The employee may select service from any vendor whose service meets the
requirements of the employee's job responsibilities as determined by the department
head. Insurance or accessories not required by the Agreement are the responsibility
of the employee.
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2) Provide Department with Phone Number
An employee receiving an University allowance for mobile communications service
must provide his/her department with the phone and/or PDA number of the
communication device within five (5) working days of activation.
3) Provide Bill for Verification of the Allowance Amount and Usage
The employee must provide a recent mobile communications bill with the annual
Agreement. The employee must be able to show, when requested by their
department head, that the monthly bill for mobile device usage, including taxes and
fees, is at least the amount of the University allowance. The employee should
maintain copies of monthly bills so they can be provided if requested by their
department head. The employee must inform the department head if the monthly
bills do not on average, equal or exceed the amount of the allowance. If the
monthly bills do not on average, equal or exceed the amount of the allowance, the
department head must adjust the amount of the allowance to a lower amount or
discontinue the allowance for the employee's service. If the allowance exceeds the
service plan, the employee must return the excess funds within 90 days.
For device purchases or upgrades, the employee must furnish a copy of the receipt
and return any amount in excess of the allowance provided within 90 days from the
date of the purchase.
4) Comply with Contractual Obligations
The employee is personally responsible for complying with any contract entered
into with a service provider including payment of all expenses incurred (including
long distance, roaming fees, taxes, and any penalties). In the event that an employee
leaves the position, or the device is lost or stolen, he/she continues to be responsible
for the contractual obligations of the service plan.
5) Employee Responsibility for Care of Device
Employees are expected to take reasonable care of their required mobile
communications device. Device maintenance is the responsibility of the employee.
University staff may provide tech support, but the University cannot be held liable
for any damages to device. If an employee's required device is lost or destroyed
through gross negligence, the employee may be required to replace it at their
expense, per department head discretion.
6) Notify Department of Inactivation, Loss or Theft
An employee receiving the University allowance toward the purchase of mobile
communication devices or services must notify his/her department head as soon as
possible and in no case more than five (5) working days beyond inactivation of the
service or loss or theft of the device.
d) Employee Allowance
If the University requires an employee to carry a mobile communications device for
Substantial Business Reasons in order to perform his/her duties, the employee, with
approval of the department head, will obtain a personal mobile communications service
plan and device and will be reimbursed by the University within approved limits. This
allowance must be justified by business requirements which necessitate the use of a
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mobile communications device to perform official University business where such
business cannot be accommodated by the use of a land-line phone, pager, or other
communication device. Approved procedures must be followed when providing an
allowance for this purpose. If the University requires an employee to carry a mobile
communications device for business purposes but the definition of Substantial Business
Reason is not met, the allowance should be treated as taxable.
1) Based on Business Need
Department heads must determine the business mobile communication needs of the
employee. Department needs should dictate the type of plan and level of service
required. Because the device is owned by the employee, it may be used for personal
as well as business use, but must be available for the performance of responsibilities
as designated by the department. In general, this means in possession of, and turned
on during those times specified by the department head.
The employee may obtain a more expensive plan if desired for personal use, but will
only receive the allowance amount agreed upon for University business
use. Payment of bills for the service plan and device are the responsibility of the
individual, not the school or department.
2) Monthly Nontaxable Allowance, Reimbursement
Department heads shall select a monthly nontaxable allowance based on anticipated
monthly University mobile communications device business use.
A recurring monthly nontaxable allowance for a service plan must be processed
through Human Resources Payroll department via the Additional Pay Request form.
The form can be used to specify the nontaxable allowance for a maximum of 12
months and it must be renewed annually. Specify an Earning Code of MAN Mobile
Allowance Nontaxable, Earnings Begin and End Dates, the monthly Earnings
Amount, and the Goal Amount, the total for the period (monthly amount x number
of months with a maximum of 12 months). See the HR Payroll website for the form
and instructions at http://www.northwestern.edu/hr/policies-forms/forms/payroll-
administration/index.html.
If business use results in a billed amount that is more than the nontaxable allowance
amount, reimbursement may be sought with appropriate documentation through
regular expense reimbursement procedures. If increased business use will continue,
the monthly nontaxable allowance can be revised by modifying the Earnings and
Goal Amounts on a copy of the original Additional Pay Request and submitting the
modified form to Payroll specifying that the monthly nontaxable allowance should
be increased.
3) Initial Device Purchase and Device Upgrade
The school or department will contribute toward the activation of a service plan and
the purchase or upgrade of a device, if such purchase or upgrade is necessary for the
performance of the employee's job duties. The department may also contribute
toward the replacement of aging or non-functioning devices, provided the
employee's job responsibilities continue to require the use of a mobile
communications device at the time of replacement.
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For purchase of a communications device, a separate Additional Pay Request form
may be submitted to Payroll, specifying an Earning Code of MDN Mobile Devices
Nontaxable. For exempt employees, specify Earnings Begin and End Dates (the
start and end dates for the month the device purchase is to be made), the Earnings
Amount (the device nontaxable allowance amount), and the Goal Amount (same as
the Earnings Amount for the one-time device purchase). See the HR Payroll
website for the form and instructions at http://www.northwestern.edu/hr/policies-
forms/forms/payroll-administration/index.html.
4) Wages and Ownership
All such allowances will be reported as nontaxable wages. The employee will own
the device. The allowance for the purchase or upgrade of a mobile communications
device should be sufficient to purchase a device supporting the device use required
for the performance of the employee's duties. The employee may select a more
expensive device but will not receive an allowance in excess of what is required to
perform his/her duties.
5) University Control of Allowance
The University allowance for the communication device and plan is not considered
an entitlement, is not part of an employee's base salary, and may be changed and/or
withdrawn by the University at any time. It will be paid in monthly installments
from departmental funds as authorized by the department head.
e) Fees for Contract Changes or Cancellation
1) Employee-initiated Change or Cancellation
If, prior to the end of the service contract, a personal decision by the employee, or
employee misconduct, or misuse of the device, results in the need to end or change
the service contract, the employee will bear the cost of any fees associated with that
change or cancellation.
In extenuating circumstances, a department head may choose to waive this
requirement.
2) University-initiated Change or Cancellation
If, prior to the end of the service contract period, a University decision (unrelated to
employee misconduct) results in the need to end or change the service contract, the
University will bear the cost of any fees associated with that change or cancellation.
If, for example, the employee's supervisor has changed the employee's duties and
the device is no longer needed for University purposes and the employee does not
want to retain the current contract, change or cancellation fees will be reimbursed by
the University.
2.University-owned Mobile Communication Devices/Plans
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a) Authorized University-owned Devices
1) Devices Restricted to University Business Use or Included in Pooled Service Plans
Certain devices are limited in functionality to internal University business use. At
the department's discretion, University schools or departments may elect to purchase
and provide mobile devices such as "push-to-talk" devices to faculty and staff. No
documentation of usage is required since these devices are restricted to business use.
Though the preferred solution is individual plans, devices may be owned by the
school or department with an accompanying school/department-paid pooled service
plan if:
The unit head determines that it is essential for a designated group of
faculty or staff in the unit to be available via mobile communication
devices and
The unit can demonstrate cost savings with a pooled service plan
Any personal use of the University-owned device will be treated as a de minimis
fringe benefit. However, the unit’s management should review the bills monthly to
note significant variances in charges.
2) Devices Required for Effective University Operations
There are certain departments within the University that have specific
responsibilities for safety, security and/or effective operations of the University
community at all times. These units include University Police, Facilities
Management, Information Technology, and selected employees in other key offices.
Subject to their appropriate Vice President approval, these units may implement
appropriate mobile communication plans that address the number of employees
required to carry mobile equipment, the volume of calls, and the most cost effective
means of addressing the requirements. These units are required to maintain
documentation regarding the business purpose of all mobile communication devices,
all tablet devices, the employees to which they are assigned, and show evidence that
the devices are provided for Substantial Business Reasons. These plans should be
updated annually. See Appendix C for the required form.
Any personal use of the University-owned device will be treated as a de minimis
fringe benefit. However, the unit’s management should review the bills monthly to
note significant variances in charges.
3) Departmental Shared Devices
With Vice Presidential approval, departments may obtain a mobile communications
device and service plan for departmental use when the device will not be
specifically assigned to one individual. The department is required to maintain
documentation regarding the business purpose of any mobile communication
devices, any tablet devices, the employees to which they may be assigned, and show
evidence that the devices are used for Substantial Business Reasons. These plans
should be updated annually. See Appendix C for the required form.
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Any personal use of the University-owned device will be treated as a de minimis
fringe benefit. However, the unit’s management should review the bills monthly to
note significant variances in charges.
b) Annual Departmental Review and Documentation of Business Need
It is the department head's responsibility to review mobile communication needs and
budgetary impact for University-owned devices in his/her department on at least an
annual basis. Each year, following the annual review of departmental needs, the
department must complete an Annual Mobile Communications Agreement for
University-owned Devices for each authorized device, outlining the business need and
device and service plan requirements.
If a device is to be assigned to an individual employee, both the employee and the
department head must sign the agreement. For shared devices, any employee that will
use the device is required to read and sign the agreement prior to its use.
See Appendix C for the Agreement form.
c) Departmental Responsibility for Cost and Contract Obligations
Because departmental devices are designed to be used for University communication
only, the department will be responsible for the cost and contract obligations of the
service plan. In this case, the devices remain the property of the University and the
employee must surrender the device immediately to the department upon termination of
employment or cessation of the department need.
d) Documentation/Audit Requirements
Copies of the approval forms/ agreements, receipts or other valid evidence of device
purchases and service contracts, and documentation of device usage shall be retained for
eight years for internal or external audit purposes.
e) Employee Responsibility to Reimburse the University for Personal Use
Any unusual or excessive personal mobile communications device use of a University-
owned mobile communications device must be paid to the University by the responsible
employee(s) based on documented device usage within 90 days. Charges above the
monthly plan are an indication of unusual or excessive use and the employee must
explain or justify such use if payment by the employee to the University for the excess
charges is to be avoided. This applies to University-owned devices issued for
Substantial Business Reasons.
f) Recommended Vendors
Departments should, where possible, purchase mobile communication devices and
service plans that are available from approved vendors participating in University
preferred vendor programs. Check the Purchasing & Strategic Sourcing Web Site at
http://www.northwestern.edu/procurement/purchasing/purchasing-strategic-
sourcing/index.html for preferred vendors.
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3. Employee-owned Mobile Communication Devices/Plans with a Taxable Allowance
a) School or Department Authorization and Approvals
1) Authorization
If the definition of Substantial Business Reasons is not met, a department may, at its
discretion, elect to provide an allowance for the employee’s mobile communication
device, service plan and/or tablet device. Schools and departments are responsible
to determine the budgetary impact of this program, and to determine whether or not
an employee's circumstance requires the use of a mobile communications device
and/or a tablet device.
2) Discontinuation of Additional Compensation
The department should notify Payroll immediately if additional compensation is to
be discontinued. Notification can be made by modifying the End Date on a copy of
the original Additional Pay Request and submitting the modified form to Payroll
specifying that additional pay should be discontinued.
3) Documentation/Audit Requirements
For employee-owned devices and plans, copies of the approval forms/ agreements
used to process University compensation must be retained for eight years for
internal or external audit purposes.
4) Signed Agreement
A recurring monthly taxable allowance for a service plan must be processed through
Human Resources Payroll department via the Additional Pay Request form. The
form can be used to specify the taxable allowance for a maximum of 12 months and
it must be renewed annually. Specify an Earning Code of MCA Mobile
Communications Taxable Allowance, Earnings Begin and End Dates, the monthly
Earnings Amount, and the Goal Amount, the total for the period (monthly amount x
number of months with a maximum of 12 months). See the HR Payroll website for
the form and instructions at
http://www.northwestern.edu/hr/payroll/administratorpayments.html.
See Appendix D of this document, Annual Mobile Communications Agreement for
Employee-owned Devices with a Taxable Allowance
b) Recommended Vendors
Departments and employees should, where possible, purchase mobile
communication devices and service plans that are available from approved vendors
participating in University preferred vendor programs. In most cases, contracted
discounts are available to employees. However, the employee discount amounts
may vary, depending on the selected vendor. Check the Purchasing & Strategic
Sourcing Web Site at
http://www.northwestern.edu/procurement/purchasing/purchasing-strategic-
sourcing/index.html for preferred vendors.
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c) Employee Responsibilities
1) Select and Purchase Device/Plan
The employee is responsible for the selection and purchase of a device and
enrollment in an appropriate mobile communications service plan. Insurance or
accessories not required by the Agreement are the responsibility of the employee.
2) Provide Department with Phone Number
An employee receiving University compensation for mobile communications
service must provide his/her department with the phone and/or PDA number of the
communication device within five (5) working days of activation.
3) Provide Bill for Verification of Allowance Amount and Usage
The employee must be able to show, when requested by their department head, that
the monthly bill for mobile device usage, including taxes and fees, is at least the
amount of the University allowance. The employee should maintain copies of
monthly bills so they can be provided if requested by their department head. The
employee must inform the department head if the monthly bills do not on average,
equal or exceed the amount of the allowance. If the monthly bills do not on
average, equal or exceed the amount of the allowance, the department head must
adjust the amount of the allowance to a lower amount or discontinue the allowance
for the employee's service.
4) Comply with Contractual Obligations
The employee is personally responsible for complying with any contract entered
into with a service provider including payment of all expenses incurred (including
long distance, roaming fees, taxes, and any penalties). In the event that an employee
leaves the position, or the device is lost or stolen, he/she continues to be responsible
for the contractual obligations of the service plan.
5) Employee Responsibility for Care of Device
Employees are expected to take reasonable care of their mobile communications
device and tablet device (if applicable). Device maintenance is the responsibility of
the employee. University staff may provide tech support, but the University cannot
be held liable for any damages to device. If an employee's required device is lost or
destroyed through gross negligence, the employee may be required to replace it at
their expense, per department head discretion.
6) Notify Department of Inactivation, Loss or Theft
An employee receiving University compensation toward the purchase of mobile
communication devices, service plan or tablet device must notify his/her department
head as soon as possible and in no case more than five (5) working days beyond
inactivation of the service or loss or theft of the device.
d) Employee Compensation
The allowance is a taxable benefit and must be recorded as taxable compensation on the
employee’s W-2 form. Approved procedures must be followed when providing
compensation.
Page 20
1) Monthly Taxable Allowance
Monthly taxable allowances received by the employee will be reported as taxable
wages on the employee’s W-2.
A recurring monthly taxable allowance for a service plan must be processed through
Human Resources Payroll department via the Additional Pay Request form. The
form can be used to specify the taxable allowance for a maximum of 12 months and
it must be renewed annually. Specify an Earning Code of MCA Mobile
Communications Taxable Allowance, Earnings Begin and End Dates, the monthly
Earnings Amount, and the Goal Amount, the total for the period (monthly amount x
number of months with a maximum of 12 months). See the HR Payroll website for
the form and instructions at http://www.northwestern.edu/hr/policies-
forms/forms/payroll-administration/index.html.
2) Initial Device Purchase and Device Upgrade
The school or department will contribute toward the activation of a service plan and
the purchase or upgrade of a device, if the circumstances warrant the purchase.
For purchase of a mobile communications device or a tablet device, a separate
Additional Pay Request form may be submitted to Payroll, specifying an Earning
Code of MCD Mobile Communications Device. For exempt employees, specify
Earnings Begin and End Dates (the start and end dates for the month the device
purchase is to be made), the Earnings Amount (the device taxable allowance
amount), and the Goal Amount (same as the Earnings Amount for the one-time
device purchase). See the HR Payroll website for the form and instructions at
http://www.northwestern.edu/hr/policies-forms/forms/payroll-
administration/index.html.
3) Wages and Ownership
All such compensations will be reported as taxable wages. The employee will own
the device. The employee may select a more expensive device but will not receive
compensation in excess of what is specified in the Mobile Communications
Agreement.
4) University Control of Compensation
University compensation for the mobile communication device, service plan and/or
tablet device is not considered an entitlement, is not part of an employee's base
salary, and may be changed and/or withdrawn by the University at any time. It will
be paid in monthly installments from departmental funds as authorized by the
department head.
e) Fees for Contract Changes or Cancellation
If, prior to the end of the service contract, a personal decision by the employee, results in
the need to end or change the service contract, the employee will bear the cost of any
Page 21
fees associated with that change or cancellation. In extenuating circumstances, a
department head may choose to waive this requirement.
4. Business Use of a Personal Mobile Device
If there is business use of a personal mobile communications device but not Substantial
Business Reasons for the device and the employee therefore does not qualify for a
nontaxable allowance, excess business use minutes and roaming charges resulting in
additional charges above the base plan are reimbursable.
Reimbursements for business use of personal mobile devices must be submitted to Accounts
Payable via an approved Expense Report with the service plan invoice attached to the
accompanying Expense Receipts page(s).
Page 22
Appendix A
Nontaxable Allowance Amounts
The allowed allowance for mobile communication devices and service plans must be based on
the mobile communication requirements of the employee's position. The annual maximum
mobile communications device and service plan nontaxable allowance is $1,200.
Page 23
Appendix B
Annual Mobile Communications Agreement for Employee-owned Devices and Service
Plans with a Nontaxable Allowance
Annually, the department head must create an agreement that:
1. Documents the employee’s Substantial Business Reason for mobile communication
services.
2. Defines the conditions under which the employee’s device must be available for
business use as defined by the department (e.g., for on-call use).
3. Outlines the requirements the employee will observe in obtaining a device and service
plan that meets department requirements.
4. States the monthly nontaxable allowance amount to be provided to the employee for a
service plan that meets the business need for mobile communications.
5. States the one-time nontaxable allowance, if any, for purchase of a mobile
communications device.
The department head and employee must both sign the completed agreement and the employee
must provide a recent mobile communications bill with the agreement.
The form is available at http://www.northwestern.edu/financial-operations/policies-
procedures/forms/MobileAgreeEmp.pdf
Page 24
Appendix C
Annual Mobile Communications Agreement for University-owned Devices and Service
Plans with Nontaxable Benefit
Annually, the department head must create an agreement that:
1. Documents the department’s/employee’s Substantial Business Reason for mobile
communication device, service plan, and tablet device.
2. Defines the conditions under which the device must be available for business use as
defined by the department (e.g., for on-call use).
The department head and employee must both sign the completed agreement. For a shared
departmental device, each employee must sign the agreement prior to use.
The form is available at http://www.northwestern.edu/financial-operations/policies-
procedures/forms/MobileAgreeUniv.pdf
Page 25
Appendix D
Annual Mobile Communications Agreement for University-owned or Employee-owned
Devices and Service Plans with a Taxable Benefit
Annually, the department head must create an agreement that:
1. Documents the employee’s need for mobile communications device, service plan, and/or
tablet device.
2. For employee-owned devices, outlines the requirements the employee will observe in
obtaining a device and service plan that meets department requirements.
3. For employee-owned devices, states the monthly taxable allowance amount to be
provided to the employee for a service plan that meets the business need for mobile
communications.
4. For employee-owned devices, states the one-time taxable allowance, if any, for purchase
of a mobile communications device or tablet device.
The department head and employee must both sign the completed agreement.
The form is available at http://www.northwestern.edu/financial-operations/policies-
procedures/forms/MobileAgreeTaxable.pdf
Page 26
History/Revision Dates
Origination Date: January 1, 2009
Last Amended Date: June 17, 2016
Next Review Date: March 1, 2017
