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Administrative Policy #100:
The purpose of this policy is to define clothing or uniform options for university faculty and staff and what implications there are for supplying clothing for faculty and staff on taxable income. The general rule under IRS regulations is that clothing given to employees, suitable for general usage as ordinary clothing, is a taxable fringe benefit. Clothing provided for volunteers is not subject to this policy.
Clothing given to a UW-Parkside employee as a prize, award or gift must follow UW System Administrative Policy 330 Prizes, Awards, and Gifts. Clothing given to employees without a legitimate business purpose would be considered a gift.
Clothing – A shirt or outer garment with an approved logo and department name on it, not intended to be worn outside of the workplace; however, this is not a limitation.
Required Clothing – Clothing worn as a condition of employment and typically given to personnel when it is a requirement for this person to be identified with the department, but not necessarily by name.
Provided Clothing – Clothing typically given to personnel when it is deemed to be in the best interest of the department for this person to be identified with the department, but not necessarily by name.
Uniform - Typically supplied by a contractor and provided to employees working in an environment that requires special clothing or clothing that can be easily damaged. Examples include plastic clean room coats, safety glasses, hard hats, protective footwear, and safety vests. Uniforms can contain approved logos, department names and an employee name affixed to the garment.
All clothing and uniforms for personnel must be approved by the department chair or director, must have a documented business purpose, and deemed necessary to carry out department responsibilities. Purchases should follow normal procurement procedures established by the University.
Provided Clothing - The value of provided clothing must be documented and added to the employee’s taxable income, unless the value is forty dollars ($40) or less and is considered de minimis. Examples of de minimis clothing are T-shirts or polos with the word STAFF printed on them that are provided to employees for a special event.
Required Clothing and Uniforms - Not taxable when specifically required as a condition of employment. Required clothing and uniforms must be worn for business use only and not adaptable to general usage as ordinary clothing. It is not enough that the employee does not wear the work clothes away from work. The clothing must not be suitable for taking the place of their regular clothing.
According to the Uniform Guidance for Federal Awards §200.445 Goods or Services for Personal Use, the costs of goods or services for personal use by employees of a non-Federal entity are not allowable regardless of whether the cost is reported as taxable income to the employees. With this restriction, federal funds cannot be used to purchase clothing.
Documentation describing the nature of the clothing being purchase and how the clothing will be used must be sent to the Purchasing Department along with the purchase requisition.
In addition, for provided clothing exceeding $40 per item, a separate list must be provided identifying the employee’s name, employee ID number, and corresponding value of the clothing being ordered for each employee. This list should be submitted to the Purchasing Department along with the purchase requisition.
Foundation funds should not be used to purchase uniforms and required clothing. If Foundation funds are used to purchase provided clothing, a separate list must be provided identifying the employee’s name, employee ID number and corresponding value of the clothing being ordered for each employee. This list should be submitted to Business Services
100.07 Policy Review
This policy shall be reviewed annually.