Cell Phone Stipend: The Benefits of a BYO Program

What work can you do on your phone? Answer emails, make calls, respond to messages, schedule meetings, submit invoices and receipts… the list goes on. How often do employees at a company do this? It’s probably safe to say most of us do at least one of these on a daily basis. But how many receive a cell phone stipend? That would depend on the mobility program your company uses. A corporate liable device program means the company is providing employees with phones. No need for a reimbursement there. On the other hand, a bring your own (BYO) program would require reimbursement. Why would a company choose BYO? And why should they provide a cell phone stipend?

Why BYO?

A company might have any number of reasons to choose a BYO program. Say they’re low on capital. Instead of spending money on devices for entire departments and a carrier plan that covers those devices, they can opt to reimburse for the business use of employee devices. Companies could also choose a corporate-liable program for their sales team, but implement a BYO program for the rest of their business. BYO offers a low-cost flexibility corporate liable doesn’t quite achieve.

BYO may be the choice for a company that already has other reimbursement options. If employees are reimbursed for driving their personal vehicles for work and their personal Wi-Fi to work from home, adding a phone stipend seems a logical inclusion.

Regardless of the scenario, companies should provide their employees with a cell phone stipend. Depending on the state, businesses may be breaking labor laws by not doing so. Which raises the question: what’s the right amount for a fair cell phone stipend?

What’s a Fair Cell Phone Stipend?

According to IRS code, reimbursements must be “reasonable.” Employers have several options when considering a cell phone stipend. Some companies just ask employees to expense their phone bills. Other companies provide a fixed allowance, maybe $50 a month, to cover business use. These options provide employees with payments, but at a much higher cost to the company. Both of these methods lack accuracy.

In order to give an accurate cell phone stipend, costs specific to each employee should be taken into account. This ensures companies aren’t overpaying and employees aren’t under-reimbursed. But calculating those rates specific to each individual… that’s gotta be easier said than done, right? That’s why so many companies choose to outsource their BYO program to arrive at the correct rate.

Determining the Right Rate

When it comes down to it, there are two major factors to consider when calculating an employee’s cell phone stipend. The first is their job role. Are they in a position that requires higher cell phone usage than other employees? Or, are they in a role where a higher stipend might be provided as a perk? Answering these questions should help determine what each employee receives. The other, and more obvious factor, is location.

Costs vary from location to location. Employees working in one area might have the exact same cell phone plan as nearby coworkers, while employees in a different region will see different prices. It’s important to consider differences in cost-of-living when determining an accurate rate. Without this information, stipends lack accuracy.

Evaluating Your Rate

As with many stipends, it can be easy to set a rate and pay it no more attention. If it isn’t causing problems, it can’t be a problem. This logic doesn’t save companies money or help them enable their employees with accurate rates. Here are a few questions to consider when thinking about cell phone stipends:

• When the last time you re-evaluated your rate? A year or two can have a serious impact on whether the cellphone stipends your company provides its employees are enough.
• Is the person who determined it still at the company? It can be easy to lose track of a cell phone stipend when key decision makers are no longer around to update or justify rates.
• How do you know what the right rate is? The right rate should accurately reimburse employees for business use according to their location and job role.  The answer to this shouldn’t be “because no one seems unhappy about it.” Companies with employees expressing frustrations over cell phone stipends have failed to create and communicate the right rate to their employees.
• Should all employees be getting the same rate? Ultimately, this is your company’s choice. With the cost of living accounted for, maybe you want to be sure all employees, regardless of position, receive comparable stipends. Or maybe you want to ensure that employees in roles with more cell phone use receive higher payments. As long as the reimbursements are reasonable, the decision is up to your company.

The Motus BYO Solution

Companies may not have the time, tech or expertise to analyze employees’ carrier and device costs. Using the Motus Platform, we take all these factors into account. With millions of data points, we calculate fair and accurate reimbursements specific to employee locations and configurable to the needs of your company. These reimbursement can be calculated based on availability requirements for job roles, aligning to factors like more data-consumptive role or even international requirements.

One or the other? Why not both?

Managed mobility program? Or bring your own device (BYOD)? Companies often think they can only choose one of the other. Which one works best for the employees of your company? Well, now you don’t have to choose between them. Motus provides both MMS and BYOD offerings. Some employees need corporate devices, others can be enabled to use their own. Now you can support both!

Next Steps

When it comes to cell phone stipends, it’s best to take the right approach. Understanding what that right approach is, for your company and its employees, may take time, meetings and education. So your next step may simply be to better understand what a bring your own program with Motus looks like. Our solution not only empowers employees to use their preferred device for business, it also reduces the administrative burden of a mobility program. Customers gain flexibility by being able to add or remove users as their teams scale and can reduce their capital outlay. Ready to learn more about the Motus BYO solution or how it can work with MMS? Check out our content to learn more!

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