Car Allowances & Cell Phone Allowances

I am the HR Manager of a small manufacturing co in NJ and I am trying to get a sense of common practices regarding car allowances & cell phone allowances.  First what level of employee are generally granted car allowances?  cell phone allowances?  Directors? Owners? Outside Sales? Inside Sales?  Next how are these allowance paid - Car Allowance - In the form of a monthly predetermined allowance or receipts and mileage?  Cell phone - do employees have company paid phones or are they reimbursed for business usage on personal phones?  Any input would be very helpful to me.


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  • Outside sales are often provided cars because travelling is such an integral part of the job. As for inside sales, maybe only the head would get a car. It's possible that directors might get a car, but certainly owners, VPs, and very high level execs.
    Companies are more liberal with cell phones, becasue employees often need them to do their jobs. You
     Passenger sudans are the most popular cars - $18,000 to $40,000. Though I have noticed some trucks and especially SUVs in the last few years. Three year leases are very common. You could allow the employee to get a more expensive car than is usually provided if gthis is what they want, along with a salary adjustment - or offer an incentive to get the less expensive car.
    Things to remember in putting together your policy: what restrictions are there on the use of the car (family members, personal use), who is responsible for maintainance, checking driver's licenses and checking their driving history, who pays for fuel, conditions under which the car may be taken away. 
    There has been a general trend toward perquisites such as cell phones, automobile use, home computers, calling plans, and club memberships that are less obvious than the old time perquisites like private jets,,,, modern perqisites assist the executive in carrying out his or her job functions with greater efficiency and ease, while maintaining a better level of overall health.

    You might want to include the following provisions in your policy :Employees who use hand-held cellular phones while on company business should refrain from making or receiving business calls while driving.  If an employee needs to make or receive a business phone call while driving, the employee should make sure the vehicle is stopped and that he or she is parked in a proper parking area for the call. Employees who use hands-free telephones must keep business conversations brief while driving, and must stop the vehicle and park in a proper parking area if the conversation becomes involved, traffic is heavy, or road conditions are poor.


    Also, include a provision on using cell phone for personal use. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

  • I work for an IT company.  All of my Directors, Managers, Outside Sales (Account Execs), and Network Engineers have company provided cell phones (actually they are all blackberries).  For those driving to and from customer sites and appointments we have mileage reimbursement at the current government rate.
  • Generally, it's not the level of employee that determines who gets a company cell phone, but rather the need for the phone to perform the job.

    You should have a written cell phone policy and outline what discipline will be used for violations.

    There are a lot of things to consider:
      Who will be responsible for the contract--the company or the individual--and in whose name will the contract be placed?? 
      Are employees limited to a certain provider, plan , or duration under the company's master plan?
      Can individuals add services or pay for extra services that are not provided under the company plan?
      Will you ban camera phones?

    Since you are a smaller company, abuse may not be a problem, but you should still make someone responsible for "spot checking" cell phone bills.



  • Any employee who drives their own vehicle while on company business is reimbursed at the then current IRS business mileage rate.

    We own about three dozen cell phones which are assigned to those who need them to perform their job.  We have restrictions on personal use.  We get substantial discounts due to volume of phones and use.

    There are a few employees who need cell phones occasionaly.  They have their own private cell phones and we reimburse them $25-$30 per month to help pay their cell phone bill.

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