It is becoming more common for employers to require employees to use their personnel motor vehicles for business use. Reimbursement for business use is commonly by way of a kilometre/mileage allowance or a general motor vehicle allowance for the year.

Did you know that you can be found vicariously liable for the acts and omissions of your employees driving while driving a motor vehicle for work related business?

Even an innocuous journey to pick up the daily mail can be fraught with risk!

I this day and age employees cannot always be relied upon to exercise discretion and common sense. It is therefore important that you take some human resource risk strategies to ensure that any risk is mitigated or at least as much as possible.

Normally a business motor vehicle policy should set the boundaries of employee use such as;

• Is the employee required to use their personal motor vehicle, when and under what circumstances,

• Does the employee have comprehensive and replacement insurance for their and any third party damage,

• How is the employee to be reimbursed,

• Is the reimbursement subject to state or federal taxes,

• Does the employee warrant that they hold a valid drivers license for driving a motor vehicle,

• What is your company policy for an employees’ loss of drivers’ license. This may be due to potential substance abuse, driving under the influence of alcohol or another offence.

• Does the employee loosing their license mean termination of employment as driving the motor vehicle is part of their tools of trade?

• Is the employee required to advise you of any license restriction and demerit points accrued?

• Do you have a company policy that states that no parking fine, infringement, traffic violation or any other impost federal, state or local will be paid by the company?

By taking time to develop key human resource policies and procedures and by inducting and training your employees you can reduce the potential business and financial risk to your company.

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Philip Lye is the Director of Biz Momentum providing strategic human resource management to help your business grow. Philip is also a qualified accountant. Biz Momentum assist small to medium businesses. Visit http://www.biz-momentum.com for other helpful articles and to subscribe to Biz Momentum's free monthly newsletter and receive a free Employee Performance Appraisal.

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