DOA Telework Expense Payment Policy
Introduction
In accordance with Department of Human Resource Management (DHRM) " Policy Number 161 - Telecommuting," a teleworker
performs their duties from an alternate work location which may or may not be their personal residence. Teleworkers
may, or may not, be required to work from a remote or alternate location as a condition of employment. Teleworkers
are defined as employees who work at a remote or alternate location a minimum of one day per week or 32 hours per month
while intermittent teleworkers work at a remote or alternate location less than this threshold. This policy governs the
payment of expenses supporting telework arrangements for all teleworkers or intermittent teleworkers.
Policy
When certain expenses are necessary to perform the requirements of the employee's position from an alternate location, agencies may pay for allowable telework expenses either through a direct bill to the agency or reimbursement to the employee.
In determining what telework expenses are justifiable, agencies must consider the nature of the work responsibilities documented in the Employee Work Profile (EWP) and the telework agreement (e.g., telework as a working condition, telework frequency, proportion of business versus personal use, etc.). Agency-paid telework costs must be consistent with the employee's work requirements and telework agreements. Different work profiles and different telework arrangements may produce different expense justifications.
Voluntary teleworking is viewed primarily as a personal convenience; and the savings in employee commuting time and costs generally render financial reimbursement unnecessary.
Telework Expenses
The following telework expenses are allowable (i.e., agency-paid) for teleworkers and intermittent teleworkers subject to the justification criteria outlined in this policy:
- Office supplies and operating expenses supporting Commonwealth-owned or issued equipment such as personal computers, communications devices or other necessary teleworking equipment. Any incidental or occasional use of the Commonwealth-owned/issued equipment and the associated connectivity services must comply with DHRM "Policy Number 1.75 - Use of the Internet and Electronic Communications Systems".
- A single telephone service connection for each employee for either Commonwealth-owned/issued or employee-owned telephone equipment. Includes connectivity services or fees (including activation fees) for cell or land-line telephones, personal digital assistants (PDA), Blackberry's and similar communication devices.
- A single internet service connection for each employee for either Commonwealth-owned/issued or employee-owned computing equipment. Connectivity services or fees (including activation fees) include cable broadband, cellular service (including Broadband Air Cards), Digital Subscriber Line (DSL), Fiber-Optic service, Integrated Services Digital Network (ISDN), Satellite data service, Wireless Fidelity (Wi-Fi), Worldwide Interoperability for Microwave Access (WiMAX), dial-up modem access, and similar communication services. Use of non-Commonwealth devices for telework must comply with the Commonwealth IT Standard Use of Non-Commonwealth Computing Devices to Telework (SEC 511-00) (07/01/2007).
- 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 employees to compensate for employee-incurred telework connectivity expenses supporting employee-owned or Commonwealth-owned/issued 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 (e.g., telework as a working condition, telework frequency, EWP requirements, actual connectivity costs, proportion of business versus personal use, etc.) and fully supported by a sound business case. Allowances may not be advance-paid and must be re-evaluated in writing every 12 months.
The following telework 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 facsimile (fax) machines, telephones, cell phones, printers, computers, paper shredders and similar devices and equipment. Commonwealth-owned/issued equipment may be deployed for telework subject to appropriate controls governing such assets.
- Advance payment reimbursements for allowable connectivity services. While many internet service providers require payment in advance of receiving the service, agencies should only reimburse employees for these services after the services have been received. Advance payments made directly by agencies are allowable when required by the service provider.
These lists of allowable and prohibited expenses may not be all inclusive. Agencies are encouraged to consult with the Department of Accounts, Director of General Accounting to discuss the justification for other costs. Agencies may establish more restrictive policies for the payment of telework expenses.
Documentation Requirements
Telework expenses may be paid directly by the agency to the service provider or reimbursed to the employee subject to the following:
- The employee telework arrangement must be supported by a written, signed and dated agreement describing the terms and conditions for the telework agreement as required pursuant to DHRM "Policy Number 161 - Telecommuting".
- The telework arrangement must adhere to all applicable policies and standards issued by other State agencies such as the Virginia Information Technologies Agency, DHRM and DOA.
- The justification for payment of teleworking expenses must be supported by a documented business case with appropriate consideration to the justification criteria outlined in this policy and approved by the agency fiscal officer.
- Payments or reimbursements must be supported by the original invoice from the equipment, supply and/or connectivity provider and should be pro-rated for any partial month service.
- Agencies must have in place adequate controls to ensure that Commonwealth-owned/issued assets, such as PC's, laptops, communication devices and other similar items, that are issued to employees are adequately protected. An example of appropriate controls would be an employee termination check-list to record the return of such assets and cancellation of any future agency-paid phone and internet connectivity expenses.
Income Reporting Requirements
Cell phone connectivity costs paid directly by the agency 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". Accordingly, agencies must generally report such connectivity costs as taxable income to the employee. Under IRS regulations, agencies requiring employees to submit detailed documentation supporting business versus personal use of employer-paid cell phone service and who require the employee to pay the proportional costs of personal use may exclude such employer-paid cell phone connectivity costs from taxable income.
Internet connectivity costs paid directly by the agency that are used with personal equipment or reimbursed to the employee are generally considered by the IRS to be a taxable fringe benefit. Accordingly, agencies must report such connectivity costs as taxable income to the employee. Under IRS regulations, the documentation rules governing cell phones outlined above do not apply to internet connectivity costs as there is no practical way to account for, or limit, the use of the internet connectivity provided directly to the employee's home or alternate work location. Air cards and associated monthly service fees paid by agencies for Commonwealth-owned/issued laptops is 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. Agencies must report such allowances as taxable income to the employee.
