CCJ

June 2017

Fleet Management News & Business Info | Commercial Carrier Journal

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32 commercial carrier journal | june 2017 M any commercial and private fleets have employees who use personal nonspecial- ty vehicles for work to make sales calls and rush deliveries, among other activities. Companies oen use a standard IRS mileage rate, currently at 53.5 cents, to reimburse their employees tax-free for their business miles. Another common practice is to pay a monthly flat allow- ance so employees won't have to keep track of their mileage. Both methods are a one-size- fits-all solution that can be risky, especially in California. According to the Golden State's Labor Code Section 2802, employ- ees must be reimbursed for all of their expenses when performing job duties. That may seem straight- forward, but "employers have the burden to show they are accurately reimbursing employees," says attor- ney Danielle Lackey, general counsel for Motus, which offers a vehicle management and reimbursement technology platform. In California, 61 active lawsuits allege Section 2802 violations against employers, Lackey says. One recently settled case was against a marketing services firm for not parsing out expense reimbursements in its payroll, she says. Employees who used their personal vehicles for work were paid higher base salaries and higher commission rates, but that was not enough. The company was ordered to pay $7 million to settle the lawsuit. The least risky method for vehicle reimbursement is also the most ac- curate. Motus and other companies offer software that automates the use of the Fixed and Variable Rate method for reimbursement. FAVR uses a calcu- lated rate based on the lifecycle costs for a type of vehicle that is reasonable for the job, and not necessarily the actual vehicle a worker uses. A salesperson may drive a Chevy Suburban, but the company can reim- ONE SIZE FITS ALL?: Solutions to reimburse employees tax-free for their business miles can be risky. CRITICAL TELEMATICS: Data is becoming central to withstand and respond to compliance inquiries. TECH CAN HELP: Software can automate the Fixed and Variable Rate method for reimbursement. MAKING THE LATEST TECHNOLOGY DEVELOPMENTS WORK FOR YOUR FLEET BY AARON HUFF Personal or business use? Tech brings employee vehicle programs into compliance The Motus platform helps com- panies automate the process of tracking mileage and reimburs- ing employees for business use of personal vehicles. Telogis' Logbook app supports commercial drivers and other workers who drive a vehicle for both personal and business use.

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