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Fleet Vehicle for job California

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  • Fleet Vehicle for job California

    I am a road warrior for a company in MA. When hired, I had to use my car and was reimbursed for mileage. 6 months into job, I was told company providing fleet vehicle and gas card. Oh, and every month, I have $220 taken out of my check for the use of their car. Is this legal in CA? Why am I paying them to use their car to do my job for them? I dont get it. I had just bought another car shortly before all of this and now have essentially two car payments. I live in an apartment with one parking space and when I asked how to handle this, they said sell your car. ????? REALLY! So, time goes on and I let them do this because I need my job. Someone hits me on frwy and drives away. Im told to go to emergency room, which I do. Next day, car is picked up to be repaired. Since I leased my vehicle to someone else (relative...) to offset my expenses, I had no transportation to doctors, etc. I had to depend on rides. They returned the car two weeks later -- never offered to get rental car, etc. Now, they are coming to get car. Apparently since I have been on disability going on 45 days, they have the right to do this. Now, I will once again have to depend on rides to doctors, etc. Anyone know anything about this -- should i be paying for THEIR car? And since I am, shouldnt it be available to me to go to doctor, etc. Many people that work for this company did sell their vehicles because they couldnt afford "two" cars and had no place to park two cars. I decided against that -- if I lost my job or quit, I didnt want to be vehicleless. Anyone who can help; greatly appreciate it. Thanks.

    I forgot to mention that I was told I have to pay this to company because they assume the car will be used for personal use. They allot a certain number of miles for this. However, I live in So. CA and find myself frequently having to tell someone else to drive so I dont go over alloted miles. If I go over their alloted miles, they take more out of my check. This just seems a little insane.... even if I never use the car for personal use, this is the requirement. I dont have a say in this. I cant use my car either.
    Last edited by kgburt; 09-14-2010, 02:47 PM. Reason: addition

  • #2
    You raise a huge number of points (probably not your intention). I am going to pick off a few off them.
    - IRS has rules on employer provided cars. You said that [the employer] assume the car will be used for personal use. Actually that would be IRS making that assumption, not your employer. Per IRS, any time an employer provided car is involved, the employer is legally required to assume that ALL mileage not formally documented as business is in fact personal, and is legally required to be imputed as income to the employee. The actual rules can be found in IRS publication 15B (Fringe Benefits) and the rules are complicated. I have no idea based on what you have said if the employer is correctly following these rules are not, but these are real rules that must be followed.
    - Regarding the company providing the car in the first place, I sort of agree with you but probably not for the same reasons. Speaking as a long time payroll/accounting person, maintaining employer provided cars is a REALLY BAD IDEA for many reasons. Both companies I worked for who had them got rid of them for that reason. HOWEVER, it is perfectly legal to require an employee to take a company car. IMO, really dumb on many levels, but many employers do things that I consider really dumb. You can try fighting this, but this has been legal for everyone else for as long as there have been employers and cars. So you are sort of looking to be the first person in the history of the world to win on this issue. Good luck.
    - Maybe however I can find you some good news. You are in CA, meaning that you are subject to California Labor Code section 2802, which basically says CA employers are required to reimburse business expenses for CA employees. So short answer is they cannot make you pay for work related expenses BUT they can make you pay for personnel expenses AND per IRS every single mile that you drive that you cannot document as a business mile is taxable. CA looks at this slightly differently. Look at total business miles (which does not include commutes). Price out these miles at the current IRS maximum mileage rate. The math gets tricky but if IRS says the car is worth $500/month (pub 15B), your employer is deducting $220/month for personal miles, then the employer is basically saying that the remaining $280/month is for documented business miles. Last I checked, maximum IRS mileage rate for 2010 was $0.50/mile, meaning 560 business miles. What gets complicated is CA and IRS rules are sort of pulling on different ends of the same rope. IRS has rules that say payments in excess of a certain amount for documented business miles are taxable, while CA is saying business expenses (not just mileage) must be reimbursed. Not the same thing at all, and the point where these two laws cross gets a bit muddy.
    http://www.irs.gov/newsroom/article/...216048,00.html

    Past that, you are raising a lot of issues that are outside of my expertise, and which I having trouble separating into understandable pieces.

    CLC 2802.
    (a) An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful.
    (b) All awards made by a court or by the Division of Labor Standards Enforcement for reimbursement of necessary expenditures under this section shall carry interest at the same rate as judgments in civil actions. Interest shall accrue from the date on which the employee incurred the necessary expenditure or loss.
    (c) For purposes of this section, the term "necessary expenditures or losses" shall include all reasonable costs, including, but not limited to, attorney's fees incurred by the employee enforcing the rights granted by this section.

    --------
    CA DLSE Enforcement Manual

    29.2.4 IRS Mileage Allowance. DLSE has opined that use of the IRS mileage allowance will satisfy the expenses incurred in use of an employee’s car in the absence of evidence to the contrary.
    Last edited by DAW; 09-14-2010, 05:38 PM.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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    • #3
      Thank you.....

      Your response was amazingly complete and as soon as I get a minute to really read it as thoroughly as you answered, I will. Lots of people viewing this, but you are the only one responding so far. Thank you so much for taking all this time to do this.

      Yes, not meaning to bring up so many issues....yikes! I did realize it would likely be complex though. BTW, does it matter that this company is in MA and I am in CA? Cuz, they use that excuse to address other issues and I have been told the laws in CA apply to me.

      Which issues did you feel you didnt address because they are out of your expertise and maybe I can narrow this down a bit and make my side more understandable....not sure, but worth a try.

      Thanks again for your help. I really appreciate it.

      Comment


      • #4
        Originally posted by kgburt View Post
        BTW, does it matter that this company is in MA and I am in CA?
        No. As long as we are talking labor law, then the law of the state where the work was done is applicable. IRS rules (IRC law) is obviously applicable everywhere, but for state labor law (laws imposed by the government on employers and employees), the state where the work done is applicable.

        Contract law (employer agrees to do "x" if you do "y") can maybe be a function of MA law, but only if CA agrees. But this is not a contract law website. Contract law answers are always "take the contract to a local attorney who has to actually read it". Thinks like IRC (federal taxation law) and CLC (CA labor law) are imposed on the parties by the government. As in "not contract law".


        Originally posted by kgburt View Post
        Which issues did you feel you didnt address because they are out of your expertise and maybe I can narrow this down a bit and make my side more understandable....not sure, but worth a try.
        Pretty much everything else. Things like Someone hits me on frwy and drives away may be some type of law but they are not labor law. I stay with what I actually know something about. My knowledge of and interest in non labor law matters is pretty minimal.
        "Reality is that which, when you stop believing in it, doesn't go away".
        Philip K. **** (1928-1982)

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        • #5
          Are you sure they are deducting $220 from your check? Are you sure they are not adding in, taxing it, then removing it? This is what we do for PUCC. The employees do not "pay us" for personal use of the company car but pay tax on the value associated with IRS rules for PUCC.

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          • #6
            Christa, could be either. They may be estimating "personal use" and figure it's worth $220 per month. If they deduct that amount, and they're right, there would be no imputed income.
            I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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            • #7
              Interesting. We were told that those with Company cars only had to pay tax on the value. They do not actually pay the company money.

              Comment


              • #8
                Eliminate the word "car" for the moment. The employer gives the employee some expensive machine to use. The machine can be used for business purposes or the machine can be used for personal purposes. One problem is that until/unless the actual business usage of the machine is documented, the entire FMV value of the machine is taxable to the employee. HOWEVER, if the employee pays the employer the FMV of the personal usage, then there is no remaining value to be taxed. Alternatively, lets say that the FMV is $300 per month and the employer can document 70% business usage. That means $210/month is not taxable to the employee, but $90/month is. Lets say that the employee pays $50/month. Taxable value is now $40/month. The general valuation rule is always that the taxable FMV of the "thing", less any payments made, become taxable wages to the employee.

                Cars are a problem because there are actual car specific rules that are a lot more complicated then what I just said. But the general rule is still true. Figure out the FMV by whatever rules IRS uses for the personnal value of the "thing" and the taxable wages is FMV less any payments made by the employee.

                The problem with the OP's example is that the personal usage of the car is exactly $220/month. Not very likely. It sounds like the employer is maybe not actually bothered to document business miles. A.k.a. as guessing. IRS supports guessing for some fringe benefits but personnal usage of company cars has it's own set of rules (publication 15B) that must be followed. Really ugly rules.
                "Reality is that which, when you stop believing in it, doesn't go away".
                Philip K. **** (1928-1982)

                Comment


                • #9
                  Lots of people viewing this, but you are the only one responding so far.

                  Just as an FYI, and this may seem really obvious but sometimes it needs pointing out, not everyone who views a question will know the answer, and they won't know if they know the answer until after they view it. Additionally, the long time responders here know one another's strengths pretty well, and might, after viewing a question, realize that it is better suited to someone else to give you a good answer. I was one of the early views, but knew after reading the question that DAW or Patty would be better suited to answering it than I would, so I did not reply. The number of views is not really indicative of how many people who KNOW the answer are reading your question.
                  The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

                  Comment

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