Did you know that those in the workforce under 40 (Gen Z and Millennials) spend 32% of their time working on their smartphone or tablet devices?
Providing employees freedom of choice in the tools they use on their day-to-day to get the job done is vital to their satisfaction and engagement.
Source: Gartner’s 2021 Digital Workplace Experience Survey 1
Providing a car allowance to your employees can put your company at risk of non compliance labor codes because this program fails to account for the actual number of business miles driven by an employee.
You may not be paying your employees enough for the mileage of their business trips, let alone depreciation and other costs. This could result in class action lawsuits and large settlements.
One-size-fits-all programs such as a flat stipend or company-provided vehicles are many times offered as company perks, but are they really fair to your employees?
A fixed car allowance makes large assumptions that the cost to own and operate a vehicle is the same everywhere in the country and that every trip is the same distance; while giving every mobile worker the same car does not take into account comfort or even personal preference.
The best way to ensure employees receive fair and accurate reimbursements is providing payments that match the costs of vehicle ownership in their specific location, which can be done with a FAVR program, the only IRS-recommended methodology.
This methodology takes into account the two types of vehicle ownership costs: fixed and variable. Fixed costs include consistent prices, like registration and insurance. Variable costs include shifting prices like fuel and vehicle maintenance.
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