Mixed-Use Assets and the Blurred Boundary Between Work and Life
The nature of how and where people work has changed. Technology has untethered work from traditional office spaces. As many as 70% of U.S. employees don’t sit behind a desk every day. Instead, they’re enjoying a better quality of life and higher job satisfaction as mobile workers. But the lines between work and personal life? Those are more blurred than ever before. Still, in today’s always-on world, it can be difficult to find time to do the things that matter most. Balancing the demands of work and personal life should be easy and this often means using personal assets for work purposes. With the recent trend of labor laws and related lawsuits, it is critical for employers to get their policy for mixed-use assets right.
The Rise of Mixed-Use Assets
As people create their own blend of work and life, it is common for people to leverage their personal assets for work purposes. One of these assets is your vehicle. While some people drive for work on a daily basis, others may not even recognize all their business mileage. For example, some employees don’t realize that driving to and from the airport for a business trip often qualifies as business mileage.
How does this relate to vehicles?
For many mixed-use assets, it is easier for employers to reimburse employees for business use of an asset rather than give every employee a company-owned asset. What employer would want to give every employee that takes an occasional business trip a company-owned vehicle just so they can drive to and from the airport a couple times a year?
Accurate reimbursement for business use
Companies need to be sure that they are reimbursing employees fairly and accurately for work use of their personal assets. To be truly fair, a reimbursement approach must be accurate, and when an approach is accurate, it is inherently fair. It may seem like a fair approach to pay every employee the same amount. That seems like equal treatment for everyone, right?
Different Locations, Different Costs
Unfortunately, costs are not the same in every region. Even worse, employers often don’t know where to begin to calculate an accurate reimbursement, so many end up choosing a simple option. Like paying everyone the same amount. This approach often ends up being bad for employers and unfair to employees.
Take, for example, California. Fuel costs in expensive areas like California can be 30% higher than the U.S. average. A one-size-fits-all approach can lead to underpaid people in high cost areas and overpaid people in low-cost areas.
Similar to the example of flying somewhere for a business trip, it may be difficult for employers to recognize small amounts of business use. Like a retail worker running an errand for the store they work at.
Labor Law Trends
Expanding beyond federal laws like the FLSA, a growing number of states are adopting laws that require employers to make employees whole when they use personal assets for work purposes. California, Massachusetts and Illinois are frequently mentioned, but New York, Pennsylvania, Iowa, Montana and Washington, D.C. also have laws in place.
California recently made headlines when it signed AB 5 into law, requiring employers in the state to recognize independent contractors as employees by January 1, 2020. Under AB 5, gig-work companies like Uber, Lyft and DoorDash will have to reimburse employees for use of their personal assets. That includes their vehicles. AB 5 is part of a growing trend of labor laws and legal action that underscores how critical it is for all workers receive fair and accurate reimbursement for using their vehicles.
Steps From Here
There’s plenty of opportunity to reimburse mobile employees for their mixed-use assets fairly and accurately. But finding the right programs to ensure a quick and seamless set up? That’s not quite so easy to find. Unnecessary and intensive effort to find and evaluate multiple options before finding the right one may even seem inevitable. It doesn’t have to be. Contact us to learn more about the Motus reimbursement platform and how it can suit the needs of your mobile workforce, for the benefit of both them and your organization.