Michigan State University
Controller's Office

Administration Bldg
426 Auditorium Rd, Rm 305
East Lansing, MI 48824
517 355-5020

SECTION 79: Mobile Phones Used for Both Business and Personal Purposes

Last updated: June 2017

I. Definitions

NOTE: This Policy is for all smartphones/cellphones and related service contracts used for both business and personal purposes (mixed-use). Mixed-use phones and service contracts are to be employee-owned.

In the rare case where a phone and service is used exclusively for business purposes (and therefore university department owned), please refer to Section 78.

This Policy governs:

  1. Access Plans (service contracts) for mobile phone access and data;
  2. Devices (phones) and accessories (phone cases, cables, etc.);
  3. Data connectivity for tablets and laptops. Tablets and laptops are, by definition, necessary business tools and typically can rely on Wi-Fi for satisfactory business use connectivity. If an addition to a mobile phone service contract for tablet or laptop connectivity is necessary, it is governed by this policy. The tablet and laptop devices themselves are not governed by this policy.

II. Policy

In the course of carrying out job responsibilities, many employees may need to rely on mobile phones. Thus, use of university funds for mobile phones and service is allowed. Simple convenience is not a criterion for such expenses. Expenses may be authorized if at least one of the following criteria is met:

  1. The job function of the employee (during the employee's normal working hours) requires considerable time outside of the assigned office or work area and it is important to the University that the employee is accessible during this time.
  2. The job function of the employee requires them to be accessible outside of scheduled or normal working hours (while at home, out of town, etc.).

III. Departmental Approval

An appropriate administrator (Chairperson/Director or delegate) or Dean/Assistant Vice President, may authorize expenditures for mixed-use mobile communications service and/or equipment. As verification of business purpose and authorization, a Mixed-Use Mobile Phone Allowance Agreement must be approved by the appropriate administrator (or higher) and maintained on file in the department.

Executive Officers, Vice/Associate Provosts, Assistant Vice Presidents, Non-Academic Directors, and Deans, by virtue of their positions, are deemed to be automatically authorized for such expenditures. An agreement form need not be on file for these employees. However, all terms of this policy must be followed.

IV. Payment for Devices, Access Plans & Accessories

With appropriate business need (see section II above) and departmental approval (see section III above), expenses for phone, service and accessories may be paid via an additional pay allowance or reimbursed via a disbursement voucher as follows:

  1. Additional Pay Allowance – a taxable allowance to pay the approximate business purpose portion of an employee's personally owned phone, service and accessories. It is not necessary to maintain detailed usage substantiation records to support both business and non-business usage of the service. This will save time and eliminate the extensive effort of documenting all calls and other uses. In this case, the device and access plan contract is personally owned by the employee and may therefore be used for both personal and business purposes. While the amount of the allowance paid is at the discretion of the employee's supervisor, the following allowance recommendation is strongly encouraged.

    Allowance Recommendation - takes into consideration ALL costs: Access Plan (service and data), Device (iPhone, Galaxy, etc) and necessary accessories (spare charger, etc.):

    1. The recommended monthly allowance to employees is $40 per month ($45 if additional devices (e.g., tablet) data is necessary) or less.
    2. While not common, a unit may deem a higher business use percentage (e.g., frequent international travelers). If higher is elected and the monthly allowance exceeds $45, the Pay Allowance form must note the reason.

    Allowances must be submitted to Payroll using an Additional Payments Form for academic employees or a Special Payment Authorization Form for non-academic employees. Forms should be prepared and submitted according to Payroll guidelines with a special designation of "CEL" as the earnings type. The frequency in which a department processes a form for an employee's allowance is at the discretion of the Unit Administrator. The options are annually (recommended), semi-annually, quarterly, and monthly (not recommended due to administrative burden).

    Note that once an allowance is paid, it becomes income to the employee and MSU is not entitled to a refund in the event of termination or transfer to another University department.

    Note: Mobile phone allowances are generally not allowed on federal contract and grant accounts. Please secure Contracts and Grants approval prior to processing.

    The allowance is included in the employee's pay. The allowance shows as a separate line item on the employee's earnings statement.

    This allowance does not increase the employee's base salary and will not be included in the calculation of any University benefits.

    The allowance is subject to all applicable taxes. Because the allowance is taxable, the actual amount that an employee receives may be less than the selected allowance amount.

    Employees receiving an allowance are required to provide their mobile phone number to their supervisor and to maintain an active service contract for the life of the allowance.

  2. Disbursement Voucher – For infrequent/non-recurring business usage on employee-owned devices, MSU will reimburse the employee only for incremental charges that exceed the employee's personal base service plan cost. The employee shall submit a copy of the bill indicating the cost and minutes of the base plan, and identify the business calls (use) and related usage costs that resulted in the charges in excess of the base plan.

    Mobile communications-related reimbursement vouchers may not be processed for employees already receiving a mobile communications allowance.

    NOTE: A University Purchasing Card may not be used to pay for mixed-use mobile communications service.

V. Departmental Records

A copy of the completed Mixed-Use Mobile Phone Allowance Agreement must remain on file in the employee's department for the duration of the allowance.

The employee's supervisor is responsible for an annual review of the business need for an allowance to determine if allowances should be changed or discontinued. The supervisor is to initial and date the bottom of the agreement form as evidence of this annual review. If an employee is terminated, resigns, transfers, or is no longer eligible for an allowance, the employee's supervisor is responsible for notifying the appropriate unit administrator to discontinue processing future allowances.

All service contracts are to be between the employee and the service provider. As such, if prior to the end of a service contract, the employee for any reason needs to change or end the service contract, the employee will bear the cost of any associated contract termination fees.

VI. Exhibits/Forms