month. But Jack lives in a state where insurance premiums and personal property taxes are
much higher than where John lives, yet they still receive the same reimbursement. Jack may be
incentivized to visit fewer clients or make fewer business stops knowing that his reimbursement
falls short of the true costs of driving for business, whereas John may be incentivized to drive
more often to increase his monthly reimbursement amount.
Flat car allowance and cents-per-mile policies aren't fair or accurate — and they aren't
beneficial for your employees or your business.
iii. The Importance of a Fair and Compliant Mileage
Reimbursement Policy
Now that you understand the drawbacks of one-size-fits-all mileage reimbursement policies,
apply that same thinking to implement a fair and compliant mileage reimbursement policy.
California Labor Law 2802 states that employees should be reimbursed for all expenses they
incur while driving for business. Many organizations have failed to abide by this law and it's cost
them millions of dollars in class-action lawsuits. And it's not just California — other states in the
U.S. have adopted some of the language and framework from 2802, forcing businesses to be
more careful about how they reimburse their mobile employees.
To avoid costly legal repercussions, it's important to evaluate tax-free, personalized mileage
reimbursement policies that reimburse employees based on the actual costs of driving for
business. A personalized reimbursement program is fair because employees are reimbursed
Source: TechValidate
74% 74%
searched for a vehicle program provider because they
were looking to create a fair and accurate program.
of surveyed
Motus customers Motus customers
Motus.com 7
The HR Leader's Guide to Implementing New Policy
