Managing an organization´s company cars and trucks is just one of the many tasks that can fall under the HR umbrella. Even when HR doesn´t have direct responsibility for the corporate fleet, it´s very likely that developing, communicating and ensuring compliance with the organization´s fleet policy comes under HR´s purview.

Given those realities, developing a fleet policy that is clear, concise, easily understood and is enforceable is a critical task that will set the overall parameters for managing the organization´s fleet. Many organizations partner with their fleet management company, which is well-positioned to provide needed expertise  during the policy development process. At Univar USA, for example, we leverage the specialized resources and information systems of Wheels, Inc., a leading fleet management services firm, to help monitor policy compliance and to communicate regularly with drivers.

Whether going it alone or working with a fleet services provider, if you don´t already have a well-written policy in place, the best time to develop one is now. And, if your company already has a fleet policy, it can be well worth your time to assess it carefully to ensure that the policy is creating a culture of drivers that comply with the organization´s stated policies.

Essential Fleet Policy Topics

At a baseline level, it is recommended that fleet policies should cover the following topics: 

• Eligibility
• Selecting a company-provided vehicle
• Vehicle replacement
• Driver-paid options and upgrades,
• Personal use
• Driver assistance
• Safety and insurance
• Non-compliance consequences

Eligibility and Vehicle Selection/Replacement

A fleet policy must clearly define who is eligible for a company-provided vehicle and the criteria used to determine eligibility. In addition, the policy should state the type of vehicle necessary for various levels of eligibility. Variables such as the average miles driven for a job function, whether the vehicle will carry equipment, and whether the vehicle is part of a compensation package or a tool for the job are typically considered when determining the appropriate vehicle for a specific function. And, if the fleet policy allows drivers to pay for an upgraded model or to add features to the vehicle during the acquisition process, it must also state whether drivers receive any return for the increased value of the vehicle at the time of resale. Finally, guidelines may be set for vehicle replacement so drivers know when to turn in vehicles and how to order a new one.

Personal Use 

If the organization´s fleet policy enables drivers to use the company-provided vehicle for personal use-and this should be specifically stated-the policy should also provide information on:

• The amount an employee will be charged by the organization for personal use of the company vehicle and the method by which the charge will be levied. The charge is typically made via payroll deduction, but the organization may choose to levy a one-time charge at year-end.
• Responsibility for tracking all personal and business miles and for reporting those miles to the organization. The IRS recommends that taxpayers keep a log to sufficiently document personal and business miles and this log may be subject to IRS audit. This is another scenario where a fleet management firm can be of help. Wheels, for example, offers a Mileage Collection product that makes it easy for drivers to log their mileage
• Reconciliation of personal use charges. Under IRS regulations, employees must be charged for personal miles driven on their company-assigned vehicle or the value of the personal miles must be shown as income. Univar typically uses the most common method for charging for personal miles which is the Annual Lease Value Method. This is a calculation where the IRS assigns a value to the vehicle based on its initial cost and is prorated based personal miles driven and the days the vehicle was in the driver´s possession. A fuel charge of $0.055 is also charged for the personal miles driven.

The Univar USA fleet policy calls for personal use charges to be reconciled at year-end. If the charge for personal miles exceeds the total payroll deductions for the year, the difference is included on the employee´s W-2 as income. No refunds are given if the personal mileage calculation is less than total payroll deductions.

Some fleet policies allow other family members to use the company-provided vehicle. If this is so, be sure to specifically define which members of the employee´s family can drive the vehicle and any stipulations about when it may be driven. 

Operational Policies

In case of emergency or for roadside assistance, as well as for general questions, the policy should provide instruction on who the driver should contact. Information on preventative maintenance and service, including the grade of fuel to be used, should also be provided.

In addition, it is recommended that specifics about driver safety and insurance be outlined.  Our firm´s policy, for example, includes:

• Requirement to maintain a good driving record and a valid driver´s license at all times. Motor vehicle record (MVR) checks are performed for every new employee and are subsequently performed annually.
• Prohibitions against:
• Driving under the influence of alcohol, medication or any substance that is hazardous or illegal
• Picking up hitchhikers
• Carrying firearms or weapons
• Pushing or pulling another vehicle or towing a trailer or boat
• Using radar or laser detectors
• Distractions including eating, drinking, reading or checking maps or appointment books while driving.
• Requirement to wear seatbelts
• Cell phone usage guidelines-drivers must use a hands-free model if talking while driving. In addition, they must: limit conversation and not get involved in heated discussions. Dialing numbers, looking up numbers and taking notes while driving are prohibited as is using the cell phone in heavy traffic or hazardous weather conditions.
• Accident reporting and vehicle repair guidelines.

In addition, the policy requires drivers with company vehicles to participate in a driver safety program on a periodic basis.

Relevant information about insurance coverage should also be addressed in the fleet policy.  Our firm, for example, is self-insured and coverage is limited to liability. All property damage claims are paid outright and there is no deductible. These are facts that employees must be cognizant of at the time they accept responsibility for a company vehicle.

Non-Compliance 

What happens when employees are non-compliant with the stated policy? This is when HR is often required to step in, even when the HR department is not directly responsible for fleet management.

First, it is key to address non-compliance, as well as how compliance will be measured in the fleet policy document.  Repercussions for non-compliance and identifying who will enforce the company´s fleet policy and who will handle infractions must be clearly communicated. It is vital to have a plan in place to handle potential violations before they occur and to monitor compliance on an ongoing basis. Typical areas of concern include:

• Fuel card usage
• Moving violations
• Vehicle maintenance
• Accident management
• Registration and renewal
• Safety

Results of non-compliance vary widely and are organization-specific. Depending on the area and level of non-compliance, repercussions can run the gamut from taking refresher courses in driver safety through losing eligibility for a company vehicle, having responsibility for vehicle repair or even termination. 

Expert Help and Automation

Compliance monitoring is an area where a fleet management firm can offer services and expertise that can prove invaluable. Univar USA, for example, provides fuel cards that can only be used to purchase fuel and no other items. Card usage is monitored by Wheels and online exception reports are available for our review. Similarly, the Wheels system automatically identifies employees with vehicles that are overdue for maintenance and emails reminders to those employees based on parameters set by our firm. And, Wheels also manages registration and renewal processes to ensure drivers remain in compliance and to provide notification about employees who are not cooperating with the process.

Fleet management firms can also provide assistance in other areas such as vehicle resale.  For years, Univar USA had an informal resale program in place which basically consisted of providing employees with a quote on the vehicle price when the vehicle was ready for resale. Wheels has made it possible to expand that program so that the employee is allowed 10 days to decide whether he or she wants to purchase the vehicle. If the employee chooses to opt out of purchasing, the vehicle becomes available to anyone in the company via a link to the Wheels website for used vehicle sales-a change that has proven very popular and has made the entire resale process much smoother from an HR perspective. Wheels also provides access to a variety of other resale channels to ensure Univar receives the best possible value for every vehicle resale, thus lowering overall vehicle depreciation.

And, keep in mind that a fleet management firm can be a major information resource as policies evolve to address new circumstances and technologies. When Univar USA was reviewing its cell phone policy, Wheels provided cell phone policies of multiple companies as examples of what was working in other environments.

Communicate...Communicate...Communicate 

Once the fleet policy is developed and written, it must be communicated effectively to every employee.  Questions to be considered when developing the policy communications plan include:

• Who must approve the policy before it is implemented?
• Who must be informed about the fleet policy?
• What media will be used to communicate the details of the policy?
• Who will employees contact when they have questions about the policy?
• Who administers the acknowledgement of the policy with employees?
• How will ongoing communications be handled?

Our company´s stance is that the HR area is a key component of communicating  the fleet policy. HR provides eligible employees with the policy when they join the company and/or become eligible for a company vehicle and HR ensures that the employee formally acknowledges being made aware of the policy via a signed document. HR is also involved in ensuring that appropriate communication about the policy takes place when there are major organizational shifts such as a merger or acquisition. And, the fact that fleet management is part of the HR area means that we typically have relationships established with operational managers, resulting in smooth communication when non-compliance issues arise.

However, even in those organizations where HR doesn´t directly manage the fleet, it is essential to be involved in reviewing fleet policies, communications and systems on a regular basis. This will minimize confusion and support successful resolution of those difficult scenarios when HR is inevitably called in to ensure appropriate enforcement of non-compliance consequences. The bottom line is that a fleet policy that covers all of the bases and includes systems for monitoring and enforcement via regular communications with drivers will provide HR and your organization with a solid foundation for effective fleet management.

Linda Jennings is Human Resources/Fleet Manager at Univar USA. Headquartered in Kirkland, Wash. Univar USA is the leading chemical distributor in the U.S.