Do you need a cellphone policy for your workplace? And should cellphones be subsidized?
It seems that the majority of respondents to our recent poll believe that they do need a cellphone policy. Last September we asked you: Does your company have a cellphone policy? 289 (61.75 percent) respondents out of 468 said they do; 163 (34.83 percent) respondents indicated they did not have a cellphone policy; and 16 believed they did not need one.
So do you need one or not?
There is no legislation in Canada that specifically requires organizations to have a policy that deals with cellphone use (sometimes called a distracted driving policy).
However, did you know that talking on a hand-held cellphone and using other portable/mobile electronic or wireless devices while driving is banned in all jurisdictions in Canada? And did you know in Alberta this includes activities like texting, reading, writing and personal grooming?
Did you know that a collision or an incidence of bad driving caused by the use of a phone can result in charges under a number of laws, including those related to dangerous driving, careless driving, and criminal negligence causing death or injury?
Did you know employers can be held liable for employees involved in an accident if they were talking on a company cellphone while in the course of employment?
When you allow employees to use cellphones while driving, and they conduct business at the same time, there is a serious risk of vicarious liability for employers: a driver talking on cellphone has an accident, and the employer is sued.
The legal principle is invoked when a driver is at fault for causing an accident and cellphone use is a factor. If there is any evidence that the call was made while the driver was conducting business or considered at work, or the call was work-related, the driver's employer could be held liable for damages resulting from the accident. Thus far, all of the cases on record where employers have been sued under this principle have taken place in the United States. Although there is no reported Canadian case on record, the principle of vicarious liability nonetheless applies here. This means that employers have been found liable for damages caused by the negligent or wrongful conduct of their employees acting in the course and scope of their duties. Whether the employee was acting in the course of his or her duties at the time of the incident is always a question of fact to be determined in each case.
While the courts in Canada have yet to deal with employer liability in this specific context, do not be surprised if a court finds the employer liable for an accident caused by driver inattention while talking on a cellphone.
Businesses should consider monitoring when and how employees use their cellphones while on the road for business purposes, with the knowledge that they could be liable if an accident occurs, to the point that hand-held cellphone use should be banned altogether, if necessary. Employers should establish policies regarding the use of cellphones while on company business, safe cellphone practices and providing employees with hands-free devices.
Considering a cellphone policy is crucial for those employers that have employees constantly on the road, such as trainers, installers, sales representatives or those who are on their cellphone while constantly travelling for business purposes, among others.
But creating a policy is just the beginning. Employees also need to be aware of it. So communicate your policy to all employees not just the ones on the road or traveling. Monitor to ensure employees are respecting and complying with the policy. If there are any violations, do not hesitate to investigate and apply warnings and disciplinary measures.
Does your organization or company subsidize the cost of employees' personal cellphone for work use?
Cellphones are a business essential for employees in numerous fields and industries. Many businesses recognize this need and either provide their employees with company-issued cellphones or reimburse those workers for some or all of their cellphone expenses. It makes for a more connected, more accessible and more efficient workforce.
The most common example is where the employer needs to contact the employee at all times for work-related business or emergencies. Another is if the employer requires the employee to be available to speak with clients when the employee is away from the office.
118 respondents out of 260 respondents do subsidize the cost of employees' personal cellphone for work use. Of those, 48 had a policy in place. 142 out of 260 indicated that they did not subsidize the cost of employees' personal cellphone for work use.
If you provide your employee with a cellular phone or other handheld communication device to help carry out his or her duties, the business use is not a taxable benefit. Cellphones/pagers must be used for business purposes only in order for the reimbursement to be considered a non-taxable benefit. That means that workers are typically responsible for paying all charges related to personal use of their cellphones/pagers. If the employer is paying for workers' personal usage such reimbursement could be considered as taxable income by the Canada Revenue Agency.
If part of the phone use is personal, you have to include the value of the personal use in your employee's income as a taxable benefit. Generally, the CRA will not consider your employee's personal use of the service to be a taxable benefit if all of the following apply:
- The plan's cost is reasonable
- The plan is a basic plan with a fixed cost
- Your employee's personal use of the service does not result in charges that are more than the basic plan cost
According to the CRA, you, as the employer, are responsible for determining the percentage of business use and the fair market value. You have to be prepared to justify your position. You must also include any GST/HST that applies in the value of this benefit.
However, subsidizing the cost of employees' personal cellphone for work use can be costly.
Many human resources/payroll professionals and unions believe that if employees are required to have cellphones/pagers for work purposes, the employer should fully subsidize or reimburse employees for related costs and expenses. These include:
- The full cost of the cellphone/pager upon receiving proof of purchase.
- 100 percent of all costs associated with the operation of the cellphone/pager, including but not limited to the following:
- All monthly fees including 911 and service access fees
- Ongoing activation fees
- Voice mail and call display
- Long distance calls and associated roaming fees
- The extra per-minute charge, should the number of total usage minutes be greater than the monthly allowance
- Hands-free cellphone equipment
- Text and data charges, including all applicable taxes
Many add to their employment contracts or collective agreements that the employer will pay the full costs associated with the replacement of cellphones/pagers every three years or sooner in the case of equipment failure, loss or theft. And that the choice of cellphone/pager provider rests solely with the individual employee.
Original receipts are required if you are audited by the CRA. Keep a file of all your employer-related expenses, including cellphone/pager bills and reimbursements, for seven years in case you are audited.
If you do not subsidize but require an employee to have a cellphone for work purposes, employer should provide a T2200 income tax form, “Declaration of Conditions of Employment.” The T2200 form allows workers to deduct employment expenses, including cellphone/pager expenses, from their income. In order for an employee to be able to deduct expenses the employer must first fill out the form.
Cellphones have become just as vital to business as a land line, which makes cellphone use a legitimate, deductible business expense.
So do you need one or not?
So, as I mentioned, it is up to individual employers to decide whether they need or want a cellphone use policy, but regardless of your business, with an increasingly mobile workforce, it is a very good idea to take employees' use of cellphones and other digital devices into consideration and formalize your expectations and the costs you are willing to cover.
If you want to know more about the rules surrounding the ban on cellphone use in your jurisdiction, please consult the following First Reference publication, The Human Resources Advisor, Ontario, Western or Atlantic Editions. To know how to draft a cellphone use policy, and cover all your bases, consult the Human Resources PolicyPro, Alberta, British Columbia, Manitoba & Saskatchewan, Ontario, Atlantic Editions.