Payment of Telework or Remote-Work Expenses
University Policy Number 2113
Related Law & Policy:
- Policy 2202: Flexible Work
- Policy 2104: Inventory Control of Office and Educational Equipment and Furniture
This policy applies to all George Mason University units and all faculty, classified, and non-student wage employees at all locations. Provisions of this policy are applicable to payments made by George Mason University or by the George Mason University Foundation, Inc. to or on behalf of University employees.
Payments made by the George Mason University Foundation, Inc. to or on behalf of University employees are subject to IRS compensation rules, because such payments are considered to be made in connection with University employment for tax purposes. Therefore, the Foundation follows this policy for purposes of payment or reimbursement of the costs described herein.
II. POLICY STATEMENT
The purpose of this policy is to ensure that telework or remote-work expenses paid by George Mason University are justifiable and that the University complies with federal income tax rules applicable to payment of expenses necessary to perform the requirements of an employee’s position from an alternate location.
Telework or remote-work costs must be consistent with the employee’s work requirements and telework or remote work agreement. Different faculty contracts or employee work profiles and different telework or remote-work arrangements may produce different expense justifications.
A signed telework or remote-work agreement must be on file in Human Resources before telework or remote-work costs may be paid or reimbursed, except for instructional faculty and members of the President’s Council, whose job responsibilities naturally include an expectation of teleworking. The flexibility provided by voluntary teleworking or remote working is viewed as having a personal work/life benefit to the employee, a business benefit to the University and an environmental benefit to the region. The University accrues benefits through reduced traffic congestion and reduced demand for parking. Savings in commuting time and costs accrue to the employee, generally rendering financial reimbursement unnecessary.
Telework or remote-work expenses paid or reimbursed by the University must be fully supported by a sound business case. Written justification must be included with all payment or reimbursement requests. Factors to consider include personal convenience, telework frequency, contract or EWP requirements, actual connectivity costs, and proportion of business versus personal use.
Subject to the documentation criteria outlined in this policy, payment or reimbursement for the following expenses is allowable:
- Office supplies and operating expenses supporting University owned equipment such as personal computers, communications devices or other necessary telework or remote-work equipment.
- A single telephone service connection for each employee for either University owned or employee-owned telephone equipment. This includes connectivity services or fees (including activation fees) for cell or land-line telephones, personal digital assistants (PDAs), and similar communication devices.
- A single internet service connection for each employee for either University owned or employee-owned computing equipment. Connectivity services or fees (including activation fees) include cable broadband, Digital Subscriber Line (DSL), dial-up modem access, and similar communication services. Where internet or telephone services are bundled with non-business-related costs (e.g., cable and FIOS TV), the original service provider invoice must show the charges for each service separately in order to determine the amount to be paid. Where discounts are provided for bundled services the pro-rata share of the discount should be applied to the allowable payment.
- A nominal flat monthly or annual connectivity allowance may be paid to teleworking or remote working employees to compensate for employee-incurred telework or remote work connectivity expenses supporting employee-owned or University owned equipment such as cell phones and computers. The amount of the allowance must be determined by a documented methodology with appropriate consideration to all of the justification factors outlined in this telework expense policy. Allowances may not be advance-paid and must be re-evaluated in writing every 12 months.
The following telework or remote work expenses are prohibited:
- Private worksite or employee home expenses such as utilities, insurance, home maintenance, home modification for office purposes or other similar personal expenses.
- Purchase costs or maintenance expenses associated with employee-owned telephones, cell phones, facsimile (fax) machines, printers, computers, paper shredders and similar devices and equipment. The University uses state contracts to purchase cell phones and PDAs for business use only. University owned equipment may be deployed for telework or remote-work use, subject to University Policy 2104: Inventory Control of Office and Educational Equipment and Furniture.
- Advance payment reimbursements for allowable connectivity services. While many internet service providers require payment in advance of receiving the service, the University may only reimburse employees for these services after the services have been received. Advance payments made directly are allowable when required by the service provider.
Remote Work: A work arrangement where an employee spends most or all of his/her working hours outside of the traditional place of work. Remote workers differ from teleworkers in that they work from their home located far enough away from a University campus that commuting on a daily basis is not possible, or their position is designed for off-site work. Visits to the campus are infrequent but may be regularly scheduled.
Telework: A work arrangement where an employee of the University works at an approved alternate work site for an agreed period of time, with most of the work week spent at a University work site.
Faculty, classified and non-student wage employees: Faculty, classified and non-student employees who request payment or reimbursement are responsible for submitting requests for payment that are in compliance with this policy.
Supervisors: Supervisors are responsible for analyzing payment justification to ensure the payment is necessary and a sound business case is documented before approving requests for payment or reimbursement.
Payroll: The Payroll Office is responsible for processing connectivity allowances and interpreting IRS rules related to taxable employee compensation. The Payroll Office is available to answer questions related to the potential taxability of payment of telework or remote work expenses.
Accounts Payable: Accounts Payable is responsible for reviewing requests for payment or reimbursement to comply with this policy.
George Mason University Foundation, Inc.: The George Mason University Foundation, Inc. is responsible for reviewing all requests for payment to comply with this policy.
V. TAXABLE FRINGE BENEFIT
Telephone or cell phone connectivity costs paid directly or reimbursed to the employee are generally considered to be a taxable fringe benefit according to guidance provided in the Internal Revenue Service (IRS) “Taxable Fringe Benefit Guide Publication 15-B”. Connectivity costs may be reimbursed only when supported by an itemized list of telephone calls included in the billing period. The business purpose of each call must be documented. Reimbursement for data charges on a cell phone or PDA will follow the business percentage of voice charges incurred during the billing period.
Internet connectivity costs paid directly by the University that are used with personal equipment or reimbursed to the employee are generally considered by the IRS to be a taxable fringe benefit. Under IRS regulations, there is no practical way to account for, or limit, the use of internet connectivity provided directly to the employee’s home or alternate work location.
Air cards and associated monthly service fees paid for University owned laptops are not considered a taxable fringe benefit to the employees who use this connectivity product.
Connectivity allowances are considered by the IRS to be a taxable fringe benefit. The University must report such allowances as taxable income to the employee.
VI. EFFECTIVE DATE AND APPROVAL
The policies herein are effective January 1, 2009 and were revised March 15, 2009. This policy shall be reviewed and revised, if necessary, annually to become effective at the beginning of the University’s fiscal year, unless otherwise noted.
Maurice W. Scherrens
Senior Vice President
Peter N. Stearns
Date approved: October 31, 2008
Revision Approved: March 12, 2009