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| - | Overview of Fleet Policies & Procedures | + | Overview of Fleet Policies |
| - | • As policies may be specific to particular vehicles and applications, so too, may they be specific to the company or government agency that is responsible for the vehicle. Many times two different fleet managers will develop the same policy but they are expressed in completely different ways. This may be a result of the style of the writer and as much if not more so the desire to blend the essence of the message to mirror existing company or agency policy in structure and tenor. This guide will not provide instruction on how to write policies and procedures, but rather is will provide suggestions which will enable the fleet manager to construct clear and effective communication. When establishing a new policy or procedure the fleet manger may realize an advantage to concentrate first on the substance, expressing the message clearly, then to craft it into the profile of other communication that is in place with the Company. In this method the fleet manager concentrates on the substance first and then integrates the communication into a style consistent with other company or agency communication. After reviewing this guide, the fleet manager may realize that there may be significant opportunities to protect the safety and well being of the employee, the company and the equipment.
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| - | == Eligibility for Company Car/Vehicle ==
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| - | Eligibility for Company Car/Vehicle
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| - | • The eligibility for a Company vehicle may be predicated by a variety of reasons including but not limited to:
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| - | Need based. The vehicle is assigned to a driver because it is an integral tool in the performance of their job. This may include a sales representative, a technician who may be on call after hours, a specialized or officer of rank, or other such scenario. This may or may not provide for take home privileges.
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| - | Non-need based. This is typically reflective of senior management or special performance-based recognition in which the vehicle is not an integral part of that person's job requirements. In this instance the type, cost, level of equipment and term of eligibility may vary widely from company to company. Prior to implementing new policy in this area, The fleet manager will eliminate a significant amount of angst to ensure senior management has reached an absolute consensus regarding the specifics of and potential loss of eligibility.
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| - | == Use of a Personally Owned Vehicle ==
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| - | Use of a Personally Owned Vehicle
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| - | • Will the use of a personal vehicle be authorized and compensated for to make occasional business specific errands ? Will a personal vehicle be used each day to go to the post office box before arriving at the corporate office each morning ? While these examples may be at the extreme end of the spectrum, these scenarios clearly exist. If a crash or loss were to occur have expectations been clearly spelled out and understood ? Have the following concerns been addressed :
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| - | Does the employee understand that they will need to notify their automobile insurance carrier of the frequency or annual work related mileage which may result in a raise in their insurance premium ?
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| - | Has your company established minimum insurance levels which may be significantly higher than that of which the employee would typically have in force ?
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| - | Does the employee understand that regardless of a flat rate or per mile compensation, they will be responsible for all maintenance, repairs and losses due to crashes and other occurrences ?
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| - | Has your company established minimum standards regarding the exterior and mechanical condition of a personal vehicle used for business purposes ? As one can well imagine, given the nature of the position and many other factors this point is akin to the dress code of a specific company and the clients that they interact with on a routine basis. How will this be enforced ?
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| - | If the employee's vehicle experiences downtime due to significant repair, does the employee understand that they will need to bear the cost of a rental vehicle regardless of their compensation ?
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| - | == Authorized Cars/Vehicles & Optional Driver-Paid Equipment ==
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| - | Authorized Cars/Vehicles & Optional Driver-Paid Equipment
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| - | • Similar to who is eligible for a company vehicle, The breadth and depth of vehicles and optional equipment can quickly be daunting unless controls are established.
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| - | Who can, and specifically who cannot drive a company vehicle ? Are there exceptions and how are they addressed ?
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| - | If an employee is assigned a vehicle and it is taken home and parked in the driveway Friday evening, Saturday morning the employee's son with a valid drivers license wants to shoot basketball in the driveway and moves the car and backs into the neighbor's mailbox, what are the consequences ? Can the spouse of the employee use the vehicle to make a quick run to the store ?
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| - | Is the employee allowed to take the vehicle on a vacation with his family ? Is he required to pay the company mileage for personal use ? If the answer is yes (according to clear IRS guidelines) who manages this process and makes the payroll deductions ?
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| - | Does the Company or agency have a selector list of multiple vehicles or different trim levels based on specific criteria ?
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| - | Are driver paid options or upgrades allowed ? If a driver pays for an upgraded stereo and sunroof and is either demoted, fired or losses their license two months after receiving the vehicle, how will this be handled ? Are the cost of driver paid options collected in full prior to the vehicle order being placed ? Was an agreement signed ?
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| - | Is a driver allowed to install items such as a trailer hitch, roof luggage rack, dark tinted windows or bodyside moldings ? Are vehicles allowed to have bumper stickers, license frames, after market fog lights, remote starters or other equipment ? If this is allowed are the employees free to install items themselves which may possibly involve electrical connections or drilling into surfaces ?
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| - | no mention of a drivers daily user log, outlining responsibilities & accountabilities which should accompany any vehicle
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| - | == New Car/Vehicle Delivery ==
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| - | New Car/Vehicle Delivery
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| - | • When a new vehicle is ready for pickup at the dealer, or is delivered directly to the driver by other means, is the driver
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| - | expected to perform the following activities ?
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| - | Perform a walk-around inspection of the vehicle and ensure that it does not have any damage and all optional
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| - | equipment is in place and functional ? What is the chain of communication if discrepancies are identified ?
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| - | Will the driver need to register the vehicle or perform an activity to assist with the registration process ? Are all
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| - | parties clear what expectations are ?
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| - | How and when is the driver to advise the fleet manager that the new vehicle is on road ? This may impact insurance coverage, billing, and or warranty start dates for both the vehicle and any upfitting.
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| - | This may also trigger a “watch clock” on license and registration activities and internal accrual for accounting
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| - | purposes.
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| - | == Car/Vehicle Replacement ==
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| - | Car/Vehicle Replacement
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| - | • Vehicle replacements may be decided by one or more of the following factors: mileage, age, mechanical or cosmetic conditions, suitability for a particular purpose or application, promotion or demotion, accident or other factors. The fleet manager may initiate some replacements while other replacements are communicated to the fleet manager by other members of the organization. Are replacement parameters clear and understood by all parties ?
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| - | == Disposition of Used/Pre-Owned Car/Vehicle ==
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| - | Disposition of Used/Pre-Owned Car/Vehicle
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| - | • Most fleet managers understand that leveraging various remarketing channels may provide for increased residual value and, if employee sales are allowed may provide for enhanced employee relations and lower maintenance due to the fact that the driver usually takes better care of the vehicle if they have an opportunity to purchase at termination.
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| - | Are employee sales allowed ad if so is it open to all employees or just the driver ?
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| - | How is the selling price determined ?
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| - | Are all monies collected up front and are taxes fully understood by employees ?
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| - | Are any warranties provided or expected ? What assumptions are made and by whom ?
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| - | If employee sales are not allowed or no one is interested then what is the best remarketing channel ?
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| - | When are vehicles to be turned in and when ? Are signed receipts required ?
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| - | If employee sales are allowed, are safeguards in place to prevent or detect potential "packing" of repairs or maintenance items. An example would be the vehicle had all tires and brakes replaced 10,000 miles ago but prior to the employee sale they were replaced again. The sale of vehicles should be contingent of "as is - where is" Significant prior repairs may require a vehicle cost adjustment. The same may be regarded for recently found body damage.
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| - | == Personal use of a Company Car/Vehicle ==
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| - | Personal use of a Company Car/Vehicle
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| - | • Personal use of a Company or Agency vehicle may be predicated on many factors including but not limited to the following:
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| - | No use other than strictly business purposes. This is typical of specialty use and purpose-built vehicles such as emergency vehicles, Upfit and specialty trucks and vans and the like. Typically these vehicles have no other purpose other than the task that they were specifically designed to perform and often carry Company inventory, tools or equipment.
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| - | Limited use by the employee that the vehicle is assigned to. This may include transporting immediate or household family members for a limited nature or duration.
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| - | Unlimited personal use by the employee. This may include use of the vehicle for vacation purposes.
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| - | Limited or unlimited personal use by employee and their spouse/partner or immediate household members.
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| - | • If a Company vehicle is not allowed for use of any kind outside of the scope of work are the specifics clearly spelled out?
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| - | • If limited use is allowed, are the following items specifically addressed:
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| - | The number of passengers must not exceed the number of factory installed lap/shoulder and each passenger must properly wear the devices.
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| - | No cargo may be carried on or within the vehicle unless the vehicle is specifically designed and equipped to do so. If personal cargo is to be transported it must be adequately secured to eliminate the possibility the load shifting, possibly injuring the operator, other passengers or creating a hazard. It must be stated clearly that the vehicle is a Company / Agency asset which is designed to further the goals of the company or Agency. As such it is not intended to serve the personal needs of the operator.
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| - | Are trailer hitches, aftermarket luggage racks or other similar equipment allowed ?
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| - | If personal use includes vacation or similar purposes, is the employee required to reimburse the Company or Agency for personal mileage ? If so at what rate ?
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| - | If use is allowed by members of the household other than the employee, are there hours of use, age, and licensing considerations ? Will MVR's be required on those individuals ?
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| - | If an employee incurs a short or long term disability, up to and including participation in the FMLA program, do they still retain the assignment of the Company vehicle ?
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| - | Personal use rates are handled in several different manners. While few Companies do not require any driver reimbursement, other companies may charge a flat rate per week or month. In this instance a set amount such as $20-$50 per month may be charged by the company to cover the privilege of "occasional personal use". This scenario is typically a nominal amount which takes into consideration inevitable personal use with no bookkeeping. The majority of Companies rely on a structured Personal / Business mileage reporting program whereby the operator provides a report of all personal and business mileage each month. This is promulgated by IRS and Canadian Government regulations. For guidance of US based companies reference <www. IRS.gov> and search for publication 15-B
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| - | Although the IRS provides several methods of accountability, The essence of the program states that Personal mileage is defined as any personal use of the vehicle such as commutes, vacations personal errands, or any use during short term disability. Personal use of a Company vehicle is included as taxable income on the employee's W-2 utilizing IRS formulas which may be adjusted from time to time.
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| - | Additional important information relating to company vehicle and employee provided transportation related compensation scenarios and formulas may be found in publication 15-B and also <http://ecfr.gpoaccess.gov > search <title 26> then select <1.61 - 1.169>
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| - | Also refer to <http://www.irs.gov/businesses/small/article/0,,id=137022,00.html> and <http://www.irs.gov/irb/2006-05_IRB/ar13.html> for further explination of IRS guidelines.
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| - | Need Canadian specifics.
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| - | == Preventive Maintenance, Repairs & Warranty ==
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| - | Preventive Maintenance, Repairs & Warranty
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| - | • Maintenance and repairs of company or agency vehicles is required to varying degrees depending on a variety of factors. Typically the frequency will depend on the manufacture's recommendations and any adjustments based off of time, application or special circumstances. Understanding that maintenance and repairs are one to the three leading cost categories (behind depreciation and fuel) of vehicle operations, excessive operating costs may be quickly realized by either too much or too little maintenance and subsequent repairs. Additionally, when less than prescribed or substandard mechanical attention is applied to a vehicle it may result in significant risk exposure, Company or Agency image and employee satisfaction and retention.
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| - | • Significant opportunities may be lost when vehicle operators are unaware of the specifics and term of the warranties that may cover their vehicle. Manufacturer's warranties may change from year and from model to model. Therefore it is imperative that at the first notice of any concern with the vehicle, the operator advises either the company or person responsible for vehicle maintenance.
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| - | Are vehicle operators and their supervisors clear on the time and or mileage intervals that apply to individual vehicles ? Do vehicle operators know where to take their vehicle for maintenance and repairs and what instruments (maintenance card) need to be used ? Does the repair facility need to request authorizations for repairs if over a specific dollar amount ? Is s the vehicle operator able to request repairs or maintenance that are not authorized ? How are conflicts resolved ?
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| - | What are expectations for adherence to maintenance guidelines ? What steps are taken by management to monitor compliance ? Is there a progressive discipline which will escalate non compliance issues ?
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| - | Are all parties clear on conditions of the base manufacturer's warranty and any extended warranties that may be applicable to specific vehicles ?
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| - | Does the truck, trailer or equipment require annual Safety inspections as regulated by the DOT or other Agencies? What is the frequency and where are the documents to be retained? Who is responsible for subsequent ongoing inspections?
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| - | == Safety Awareness and Training ==
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| - | Safety must be the cornerstone of any progressive fleet. This includes the ability of any operator to know, understand and use not only the safety equipment, but all attributes of the equipment itself.
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| - | Does the vehicle require safety equipment due to DOT, contractual, or environmental regulations?
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| - | Is there initial and ongoing training regarding the appropriate use of all equipment ?
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| - | * If the vehicle or equipment is equipped with a fire extingusher, safety triangles or flares, is the proper use of these items clearly communicated to the operator ?
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| - | * Is there a structured audit of safety equipment and their condition?
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| - | Has the operator fully read and understands the owner's manual for the vehicle and any additional equipment?
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| - | Are additional manuals available for quick reference?
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| - | Are supervisors familiar with all manuals? Is there a mechanism which ensures all new hires or transfers become familiar with all safety devices and equipment ?
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| - | Are there policies which, at a minimum, provide guidance for the change of a tire, jumpstarting or emergency refueling?
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| - | Are interlock or other devices installed by the OEM to prevent injuries? Are these inspected upon the initial delivery and on an ongoing basis with supporting documentation?
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| - | Are DOT manifests or logbooks required? Who will be responsible for auditing and retention?
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| - | == Accident Reporting ==
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| - | Accident and Crash Reporting
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| - | It is important to understand that in the context of this guide, an accident and crash are treated as an unplanned activity. The advancement of the fleet management lexicon has changed from using the word "accident" to now using the word "crash". This is typically used when one vehicle is involved in an unplanned collision, whether it is another vehicle, object or person. While it is important to refer to a "collision" as a "crash", unfortunately there are other scenarios which may create either significant personal injury, liability or risk exposure. If an employee is using a piece of equipment that is either part of or even detached form the actual vehicle, or the employee injures themselves in or on the vehicle without the involvement of another vehicle, person or object, the fleet manager may consider some of the following points which may be applied in variety of applications. Therefore while using the correct terminology is important, this guide will attempt to engage thought for most situations regardless of the type of vehicle or equipment that may be involved.
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| - | • It is important to clearly communicate that each vehicle operator must report all accidents immediately, regardless of fault, minimal or lack of visible damage, or details. Extreme situations such as a catastrophic loss or a fatality further underscores the need for immediate communication regardless of the situation or condition of those involved. The importance of this activity cannot be understated and many Companies or Agencies have conveyed this urgency by the directive or instructions having been communicated by the President, Commanding Officer or the senior most person within the company or agency.
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| - | • If a Company or Agency recruits the best operators, provides the best initial and ongoing training and maintains the safest vehicles to the highest degree, regrettably there will be accidents. Accidents may range from a simple low speed "fender bender" in a parking lot to a situation where one or more fatalities are involved with the Company or Agency vehicle, the other party, or both. The manner and urgency in which a sequence of events that are internally set in motion will have a direct impact upon the ability of appropriate personnel to respond appropriately. In extreme cases this will have a profound effect in regard to human suffering,
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| - | Do all vehicle operators and their immediate supervisors fully understand the need to immediately report any vehicle or equipment activity that was either unplanned or unwanted ? Has Senior Management or Command agreed upon and will immediately enforce significant disciplinary actions to operators who do not report information as soon as practicably possible ?
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| - | When information is received who is responsible for reviewing and investigation reported activities ?
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| - | Depending on the seriousness of the situation, is there a clear hierarchy of immediate notification within the Company or Agency to Senior Management, Command, Human Resources or Risk personnel ?
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| - | Does the Company or agency have a disaster recovery plan in the event of a catastrophic occurrence ? Has this been rehearsed internally ? Have allowances been made for the absence of key personnel during vacation, offsite meetings or after hours notification ?
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| - | If the incident involves a fuel or other hazardous material leak or spill is there a recovery plan in place ?
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| - | Does the Company or Agency have a policy which only allows pre-identified people to or Departments to solely respond to media or press inquires and that no other employees are permitted to make statements on the employers behalf?
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| - | Is there a clear process in place to investigate and respond to allegations of unsound or unsafe vehicles or equipment in which the operator claims was a result or contributed to the cause of the accident ?
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| - | Is there a daily, weekly, monthly or yearly visual inspection which will identify potential "unknown" or " unattended" damages ? Are the discovery of which reported with the same urgency as known activities.
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| - | Is employee assistance or counseling available to employees who have been directly or indirectly involved a catastrophic activity ?
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| - | == Motor Vehicle Records and Violations ==
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| - | Motor Vehicle Records and Violations
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| - | • The ability for an employee to posses and maintain a valid operators license, including applicable endorsements or supplemental licenses is creates the very essence of their eligibility to operate a Company or Agency vehicle. While obtaining Motor Vehicle Reports may be a function of the Fleet Department, many times this falls under the auspices of the Human Resources Department and is often a product of a third-party vendor which may provide economies associated with background checks.
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| - | Are MVR's obtained for new hires as well as transfers and promotions? Are they verified annually? What actions are taken when and by whom when concerns are detected? Is there a "grading" of minor and major moving offences which may result in either probation or loss of eligibility to operate a vehicle? Does the Company or Agency impose a duty for the employee to immediately notify their supervisor or Human Resources of any change or adverse change of their license ? Is there a provision while an employee challenges or disputes an adverse action against them through legal or court remedies?
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| - | Is the license adequate for class of vehicle that the employee will or may operate? This could include endorsements, class, grade, or supplemental licenses. Specific license requirements may be predicated by not only the State that issued the operators' license, but also the type of vehicle or Gross Vehicle Weight Rating (GVWR) of the vehicle that will be operated.
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| - | While there are minimal State by State variations for passenger cars and vehicles with a GVWR of under 10,000 lbs., Vehicles between 10,001 and under 26,000 GVWR, Vehicles towing a trailer with a with a Gross Combined Weight Rating (GCWR) of 10,001 Lbs. And under 26,000, or vehicles that carry 16 passengers or more usually require an endorsement, class change or in certain States, a Chauffeur's license.
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| - | Specifically regarding vehicles with a GVWR or GCWR of 10,001 Lbs. or more that are solely within one State are regarded as intrastate are subject to the laws of the state that the vehicle is registered in. If the vehicle crosses any State line then it is classified as an interstate vehicle and both the vehicle and the operator are subject to basic Federal Department of Transportation (DOT) regulations. In this instance the following regulations apply.
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| - | The operator must posses a valid medical card
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| - | The operator must posses a drivers log or manifest
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| - | The vehicle must be identified with a DOT number
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| - | The vehicle must have a record of an annual DOT Safety inspection
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| - | The vehicle must have specific safety equipment
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| - | The Company or Agency must perform specific activities regarding the following:
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| - | Be familiar with and conversant in applicable DOT rules and regulations applicable to their operation
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| - | Maintain a separate driver's qualification file and perform prescribed activities
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| - | Maintain an accident log per DOT regulations.
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| - | Even if a vehicle does not cross a State line, and therefore is engaged in intrastate operations, each state may adapt all or part of the Federal DOT regulations. This means that what applies to one vehicle that is operated solely in one State may be entirely different to that of the same vehicle operated in an adjoining State.
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| - | When an employee operates a vehicle with a GVWR of 26,001 Lbs. or more, tows a trailer and has a GCWR of 26,001 Lbs. or more, or carries more than 16 passengers, they are required to posses a Commercial Drivers License (CDL) which is a Federal requirement administered through each State's licensing agency. When a CDL license is required, the Company or Agency, vehicle operator and the individual vehicle(s) are held to significantly higher standard of regulations, recordkeeping and performance than that of other vehicle configurations. The depth and breadth of requirements, qualifications and penalties associated with CDL related operators and vehicles are substantial and complex. Fleet Managers of equipment that falls under these guidelines should refer the Federal Motor Carrier Safety Regulations.
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| - | == International Travel ==
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| - | == Personal Property Taxes ==
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| - | == Insurance ==
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| - | Insurance
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| - | Many fleet operations, whether they be a corporation or agency, are self-insured while other fleets purchase a commercial policy through either an agency or broker. Insurance activities may be administered in one degree or another through different departments such as Risk, Loss Prevention, Insurance, Fleet or other Departments. Regardless of the means of acquisition or method of administration, it is important that several departments work together in a seamless fashion. While the intricacies of this subject may arguably be one of the most important facets of fleet management, the items listed represent mere "high points" of very large components.
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| - | Insurance cards
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| - | Has a "backward timeline" been established for the distribution of insurance cards for individual vehicles?
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| - | How is the distribution achieved? If they are sent to each individual driver how are current addresses verified? Who and how is this formation communicated to a business partner if this is outsourced?
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| - | Is there a mechanism to provide immediate replacement cards to vehicles when they are lost?
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| - | Many States require the electronic transmission of proof of insurance which either validates or invalidates the registration of the vehicles in that State. Who is responsible for ensuring that all information is provided in acceptable forms and how is this verified? While some States are arguably more difficult to work with than others, woe is the fleet manager who receives a notice that all of the vehicles in a specific State have been suspended due to the erroneous belief of "insufficient proof of financial responsibility". This may also have a detrimental effect on the morale and trust of the vehicle operator who receives a citation because the state does not have a record of financial responsibility and the registration of the vehicle has been revoked, even though the operator possesses what appears to be a valid insurance card.
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| - | Regardless of circumstances or fault, timely and accurate information regarding an accident is paramount.
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| - | Are policies in place regarding who reports and accident and when? Is there significant penalties for failure to report or covering up an accident regardless of the agreement "That's OK, it was only a tap, no harm done" by both drivers at the scene, then several weeks, months or even years later legal positions are claimed by the other party?
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| - | Is there a clear chain of command regarding the handling of catastrophic or fatal activities during regular business hours and at all other times?
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| - | Does the company or agency have a dedicated spokesperson in unique or special circumstances?
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| - | Are resources available to respond to HAZMAT containment and removal?
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| - | Has a mock rehearsal been performed? Does a representative from Human Resources or another Department notify the next of kin? What verification of facts are involved?
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| - | Is employee assistance or counseling readily available to those who were involved either directly or indirectly with catastrophic activities?
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| - | == Equipment Transfer ==
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| - | == Rental Cars and Pool Cars ==
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| - | ==Light, Medium, and Heavy Duty Vehilces==
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| - | When a fleet operation includes cargo or passenger vans, pickup trucks, vehicles pulling a trailer or vehicles and equipment larger than those mentioned, the Fleet Manager should be familiar with the confusing terminolgy of vehicle classifcation and what matters to which agengy and under what circumstances.
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| - | Intrastate operations:
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| - | On the State level, each State may adopt all or part of the Federal Regulations (395 CFR). As such, ajoining States may may have significantly different rules and regulations regarding the vehicles that operate upon their roads. While a few States classfy a vehicle by the gross weight or the declared gross weight, the majority of States classify vehicles or equipment by the Manufacturer's Gross Vehilce Weight Rating (GVWR). This can usually be found on the manufacturer's data decal on the driver's door jamb. If the vehilce tows a trailer then a simple equation is required. Add the GVWR of the towing vehicle to the load capacity of the trailer (found on the manufacturer's data plate or title) The total of these two values is referred to as the GCWR (Gross Combination Weight Rating). If the GVWR or the GCWR is 1,001 Lbs. or more, the vehicle has the seatig capacity of 16 or more, it may be regulated by a particular State. Some States begin regulation at 10,001 Lbs. while a select few begin regulations between 10,001 and 26,000 Lbs. The Fleet Manager should be aware of the specifics of the States that the vehicles operate in which may include drivers license upgrades, compliance with vehicle safety equpment, registration and permitting. If a vehicle operates solely within a specific State, then it is regulated by the laws of that State even though they may differ significantly than that of another State.
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| - | Interstate operations
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| - | If a vehicle has a GVWR, GCWR or has a seating capacity of 16 or more and cosses a State line, then it automatically falls under Federal Regulations as stipulated by the Department of Transportation (DOT), regardless of the State that it is registered in. In this instance the vehicle is referred to as a Commercial Motor Vehicle. Commercial Motor Vehilces must are required to have the following: The Operator must posess a DOT Medical Card, the Vehicle must have DOT Annual Safety Inspection be equipped with DOT approved safety equipment and display a DOT number. The employer must also maintain appropriate driver files and maintenance records including the following: Accident Register (per DOT guidelies), Pre-hire and annual review of the drivers license, and driver's logbooks including their retention of a rolling six months.
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| - | If the GVWR or GCWR is 26,001 Lbs or greater then additional regulations are imposed in addition to those outlined above. The additional regulations include the following: Pre-hire and random drug screening and posession of a Commercial Driver's License by the vehicle operator.
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| - | If any configuration of these vehicles is operated, is the Fleet Manager and the orginization aware of the stringent and confusing rules and regulations and equipped to complu with both State and Federal regulations?
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This is the current working draft of NAFA's new book on fleet policy development. All changes and additions must be made before November 1, 2007, when this forum will be closed and the draft will be sent to the editorial committee. Please log in to contribute or create a user name for yourself by clicking the link in the upper-right of this page.
