Company Car Policy

by Practical Law Labor & Employment

A Standard Document that provides a model workplace policy for private sector employers regarding employee use of company vehicles. This Standard Document addresses critical issues such as auto safety, accident reporting, and the legal risks associated with unsafe driving. It establishes protocols for identifying authorized drivers, defining permissible uses, and outlining strict safety standards. A significant focus of this policy is navigating the tax implications of providing a company car, including fringe benefit rules under the Internal Revenue Code (IRC). This Standard Document is structured to qualify as an "accountable plan," detailing substantiation requirements and reimbursement procedures for expenses like fuel and maintenance. It helps employers manage the use of company-owned, -rented, or -leased cars in compliance with federal law, while also noting that state or local laws may impose additional requirements. This policy is a vital tool for employers looking to minimize risk and ensure tax compliance for their vehicle programs.