Company Assets for Contractors: Is It Okay to Provide Phones or SIM Cards for Work?

Company Assets for Contractors and Vendors

Can any employer give a company asset to any contractor or vendor for official use, like a mobile phone or SIM card?

Normally, it is not permitted. However, for any particular job or exceptional job performed by him, you can allow the use of a mobile phone/SIM card with special approval from management.

Dear Sreerupa, yes, you can hand over the company's assets like tools, instruments, gadgets, etc., to the employees of the contractors. However, you need to mention the following in the contract agreement:

a) Request for the allotment of the company asset. This request should come from the contractor. You need to devise the standard form for the allotment. This form should be placed as Appendix A of the contractor agreement.

b) You should devise one more form for the allotment of the company asset. The format of the form should also be part of the contract agreement. This form should be placed as Appendix B of the contractor agreement. In the form, you should clearly mention the type, make, model, product serial number, etc. Additionally, you need to mention the recipient's details, the value of the asset, and the date of allotment.

c) The assets allotted to the contractor's employee are not transferable. If the situation merits transfer, then the authorization has to come from the contractor. However, a fresh form, as mentioned in Appendix B, has to be filled.

d) In the contractor agreement, you should clearly specify the rules of recovery for (i) damages caused to the assets out of negligence, (ii) loss out of negligence, or (iii) theft of the asset.

e) If the recipient of the assets quits employment without proper handover of the assets, then the depreciated value of the asset can be recovered from the contractor. However, you need to include a clause to this effect in the contract agreement.

f) Allotment of the SIM card may be done to the contractor's employee; however, you need to take an undertaking from the recipient for using it for official telephone calls and not personal calls. Secondly, recovery of the dues for international calls or charges incurred beyond specified limits also has to be mentioned.

You need to hire a consultant for the inclusion of the various clauses on the transfer of assets.

Thanks,

Dinesh Divekar

As such, there is no law stating that assets like tools, instruments, gadgets, etc., cannot be given to the vendor or contractor. As rightly said by our senior member, Dinesh Divekar, the PE should mention this in the agreement. I will further say that the PE should justify giving such assets to the vendors or contractors.

Why should the PE provide all such gadgets to his vendors or contractors?

Please bear in mind, any mischief or crime committed by the person who has possession of the gadget may render the owner liable.

As an addendum to my earlier answer to your query, please avoid allowing your contractor or his employees to use company-owned mobiles or SIM cards. Instead, consider granting a mobile allowance, with the ceiling to be restricted by company management based on usage.

Why even grant a mobile allowance to a contractor or their employees? I personally feel it is a wrong practice to provide such allowances to contractors, vendors, or their employees. The decision rests with you.

Thank you.