Car Toppers

It’s not an ‘incentive,’ since you pay less than minimum wage, mileage reimbursement is mandatory under the FLSA, car topper or not.

Furthermore, mileage reimbursement is not income or pay in the traditional sense. It is (under)reimbursement for money the employee already spent bringing their licensed, insured, maintained and fueled vehicle to work. In many if not most cases, drivers are reimbursed less than the actual expenses they incur, so reimbursement is a net loss for them.

If you don’t wear a cartop sign, you don’t work for us. It’s not negotiable. The 6% commission we offer is more than adequate to cover mileage, wear and tear, and depreciation. I’ve been with our local franchisee since 1985, with 3 stints in management along the way. I’ve never felt like I was financially squeezed by the owner, and the money he reimburses us more than offsets all the typical driver expenses. Besides, if you finance a new car every four years, you won’t need to spend a lot of money beyond normal maintenance. A car is a tool, and much like a hammer or a saw, it will wear out and necessitate replacement. If you look at it from this perspective (and all of my veteran drivers KNOW and TRUST me to not lead them astray), the 6% commission offsets car payment, insurance, maintenance, and fuel expenses. The final net figure that remains in my pocket after all related expenses has proven to be roughly 1.6% over the 20 odd years I’ve done this. While I was last a full time driver (most recently in 2005), my typical weekly sales were about $4,400.00. $240.00 x 4.3 weeks per month is roughly $1135.20 per month (tax exempt as it is remuneration for maintaining the vehicle). Take from this a $250.00 car payment ($885.20), a $335.00 commercial insurance payment ($550.20), $40.00 a week in gas ($378.20), one oil change ($50.00 - I use synthetic) ($328.50), and a set of tires and wiper blades (about $400.00 / 12 months = $33.33) leaving a net figure of $295.17 on about $18,920.00 in monthly gross sales.
You’ll notice I don’t count depreciation. It’s a false figure…the car will depreciate anyway (albeit at a faster rate while driving excessive miles) and the choice of profession is optional on the driver’s part, meaning they are driving of their own volition, as do I when I drive…hell, today’s my day to be on the road. I’ve got a whole day of playoff baseball on the road, and whatever management headaches pop up, it’s Jeff’s day to deal with them.
You can spend a lot of time nitpicking about the little inequities we supposedly face at the end of the day, but it remains that if a job is unacceptable, an employee will quit. Personally, I look forward to my driving days as they are easy. The other thing to consider is this: I have a driver who is a terminal squeaker about how badly mistreated he is, and how unfairly compensated he is, and how he should be paid this much and no less, etc., etc. The irony of this penny-pinching clown is that he doesn’t declare all of his tips to the IRS, only the 8% figure that doesn’t trip the red flag for a potential audit. I suppose he figures it’s okay to complain about what he feels “our” fair share should be, but he doesn’t like to pay his own fair share. The other irony regarding this guy is that he wrongly views commission as income, meaning he LOATHES spending that money maintaining the vehicle. Consequently, his beater Audi is not as reliable as I’d like, which translates into me NOT scheduling him when it’s busy. Why should I put my customers (as well as my own stress levels) through the wringer for a guy that’s a terminal griper with marginal reliability?

So how many cents per mile is that? If you don’t know the answer to that, then you really don’t know if it is adequate when compared to vehicle expenses.

That’s nice, but when it comes to minimum wage mileage reimbursement calculations, the law does.

That’s true, but if the “little inequities” are because the employer is breaking the law by not paying minimum wage after expenses are taken to account, then when the employee quits, the illegal practice continues with the next hire.

I’m sorry that you feel that compliance with the law is “nitpicking”, but I’m funny that way. I really don’t see that is too much to ask that an employer comply with the law and pay minimum wage and fully reimburse employees for business use of their vehicle. If a business “LOATHES” complying with full reimbursement and depreciation or any other factors make business use of a vehicle so ‘cheap’, then the business can always purchase and use their own vehicles and ignore the “nitpicking” laws that confound them so.

So how many cents per mile is that? If you don’t know the answer to that, then you really don’t know if it is adequate when compared to vehicle expenses.

Gregster you have stated on this site that you do not know how much it costs you per mile to operate your vehicle. If this is true, knowing how many cents per mile you are being reimbursed will not help. At least in this example the monthly expenses of the vehicle are listed and compared to the reimbursement. In the example given the reimbursement was more than enough to cover the vehicle expenses. Isn’t this exactly what you are fighting for?

He excludes depreciation. The law (and I) do not. Cents per mile is the easiest way to make an apples to apples comparison of reimbursement or vehicle expenses.

While I do not calculate the actual expenses of my vehicle, AAA indicated that with as many miles I drive per year, my vehicle costs about 57 cents per mile to operate.

He includes the car payments which the law doesn’t require. AAA couldn’t even dispatch a driver in the correct state the last time I called them, I’m glad they are able to compute YOUR vehicle expenses for you. You relying on them to give you accurate figures here would be like me relying on the National Restaurant Association to tell me how much I earned when tax time comes around next.

And does the 57 cents per mile that AAA calculates adjust at all when the vehicle has been completly depreciated? How much of that 57 cents is depreciation? How much “depreciation” have you applied to your vehicle? More than the purchase price?

yeh but I’m sure Gregster thinks that car payments should be included as well. I’m just waiting for him to include the costs of hiring someone to driver the car for him as well.

gregster will not accept anything other than the IRS deduction for business expense. No U.S. Agency agrees with this interpretation. There have been lawsuits filed so common law may change things. But as it stands, the employer pays what they want, the employee can deduct the IRS amount in excess of the compensation for his mileage, and the tips are used to justify the lower tip minimum wage. Until a either the courts or the executive branch decide otherwise, that is the way things are no matter how many times we go round and round.

countdown to plethora of links for some handbook or something else to prove you wrong…10…9…8…7…6…5…4…3…2…1…

Except the DOL. Last time I checked, The U.S. Department of Labor was still a “U.S. Agency” :roll:

No, the law states the employer must fully reimburse the employee for any business expenses to bring their net wage up to minimum wage.

The law already states we must be fully reimbursed for the business expenses we incur; the only thing in question is the method and the amount. Seeing as these are federal cases and the DOL has already given guidance as to what methods and amounts are acceptable, it’s just a matter of time and paperwork until the ‘liberal’ justice system will make the ‘greedy’ capitalist business owners pay the ‘poor’ underpaid and exploited pizza drivers. IMHO

Since business’ are already required to (but they don’t) document any deductions from pay needed to justify paying only ‘actual’ vehicle costs, the only option left is to pay a standard rate. Since the DOL already recommends that the IRS rate be used, and that it is a tried and true rate already acceptable and ingrained into federal law, and is also the rate used for reimbursing federal employees, why wouldn’t the courts affirm what the DOL already says is recommended?

For gregster’s information, when tips, wages, and commission are all taken into account, it frequently adds up to between $17.00 (and believe me brother, that’s scraping the bottom of the barrel) and $26.00 per hour, with a current average of about $21.50. No matter how creative the accounting is, that exceeds minimum wage. Believe it or not, I have a couple of drivers who nitpick like that. Both, in my humble opinion, are narcissistic prima donnas who believe the world should operate according to their specifications. Both drivers put themselves through much unnecessary suffering by clinging tenaciously to this delusion. Even if they believe their coworkers agree with them, no one else steps forward to mimic their concerns. As much as they’d like to be self styled revolutionaries, nobody quite equates them with that. Proletariat “suffering” aside, I wouldn’t waste a pay raise on them because they’re both far too interested in staying (I think they both view the process as a game of chess and are completely unwilling to “lose” to the bourgeoisie) to actually quit to find greener pastures. Because of this, the more helpful and cooperative crew members tend to get the raises. Why on earth should I reward someone when they cause me grief? Because the law says so? I think not, as they are already earning far beyond minimum wage. As far as legality is concerned, I meet (and exceed by a comfy margin) the minimum allowable reimbursement, and I’m also providing a job that allows a driver to harvest anywhere from $7.00 to $15.00 per hour in tips, some of whom claim very little. I suppose it’s okay for them to work the system, but not okay for the system to work them.

My personal advice to drivers is as follows:

** Buy a vehicle that gets good mileage. This pretty much excludes any vehicle with 6 or 8 cylinders and it pretty much excludes all trucks. My car is a Hyundai Elantra with a 5 speed. I get about 25 in town, meaning roughly 3.5 to 4 gallons per shift. They’re also cheaper to insure and cheaper to maintain. A couple of years ago, my franchisee saw that I’d bought a new car. He said, with a wink, “So you re-upped for four more years?”

** Be early to work, your management, your co-drivers, and the customer will appreciate it. This holds especially true in inclement weather. If you’re late, you inconvenience the customer, AND your co-workers. It’s selfish and inconsiderate.

** Carry all sundries (crushed red peppers, parmesan cheese packets, plates, napkins, plastic ware, and menus) in your car just in case someone needs them. You’ll make a good impression and cultivate repeat business.

** Don’t have a big head…Nobody (including the management) is irreplaceable. A little humility and a lot of patience go a long way in this industry. Drivers are a dime a dozen…GOOD drivers are harder to find.

** Have a thick skin and a short memory. Stress often brings out the worst in people and it’s not necessarily personal. If you owe an apology, then apologize. It’s not a sign of personal weakness, but rather a sign of personal integrity.

** Don’t badmouth your boss while you’re cashing his paycheck…this is dishonorable and shows weakness of character on your part. We need a fifth column like we need a hole in the head.

** Have a full tank of gas and a full stomach.

** Don’t scam! Your co-drivers are your family too. Scamming them is NO different than taking money out of their wallets.

** Don’t say, “That’s not my job.” Your job is anything that gets the pies out more efficiently. Most of my drivers are willing and able to jump on the makeline and bang out a few pies. This gets them out the door more quickly and customers LOVE getting their food quickly.

** Promise less and deliver more.

** Be industrious. If I’m driving and it’s a slow night, I make sure the trash is out, the recycling is out, and the dishes are done.

** Don’t be a “clubhouse lawyer” Maintaining an antagonistic approach will diminish your value to the company you CHOSE to work for. We disclosed the terms and finances when you were hired, so if you’re unhappy, you have no one to blame but yourself. If you make a conscious choice to stay in a situation that you deem unacceptable, then you are indeed an idiot.

Drivers who keep these tenets in mind become a tremendous asset to the store. They’ve got my back and they know I’ve always got their back. They’ll get the best shifts and I’ll cut them the most slack. All but two of my crew “get it” and when I’m facing a real crusher of a night, I usually like my odds.

D-No, I agree with the majority of what you said. You appear to be exceeding minimum wage and meeting mileage reimbursement so I got no beef with you on that. My problem is with any employer that steals from employees by not meeting minimum wages laws or fully reimbursing for vehicle expenses.

I was originally hired at min wage and got several raises since then. My mileage was however dismal, but I never cared at the time. I as you suggest ‘accepted the conditions I signed on to’ and made the best of it. Since then, my employer changed to a tip credit pay system and cut my pay and raised mileage to partially compensate. It was this act that caused me to ‘get smart’ on the law and realize that my employer was likely (in my opinion) breaking federal minimum wage laws due to reimbursement being too low. I am in a continuing battle with my employer trying to right the wrongs I believe they have done.

Since this all occurred I have become a very vocal advocate and take every opportunity to educate drivers and owners about what the FLSA laws say and what they mean in terms of pay and reimbursement. Many posters here find my posts on the subject unwelcome. I feel that they do not want the information disclosed as it would cost them money if they were forced to comply with the law as it is written.

Problem is that the DOL does not even enforce it’s own laws and guidance on this matter and until recently, no drivers knew enough about the law to take action. That is all changing.

While your drivers’ compensation does appear to meet or exceed minimum wage requirements, for the record, the commission you pay is mileage reimbursement, not wages. It is repayment for money the driver already spent bringing their licensed, insured, maintained, and fueled vehicle to work. It is unfair to characterize reimbursement as wages. At best reimbursement is a wash. In many if not most cases in the industry, it is at a loss.

Except where tip credit is applied, tips are the sole property of the employee and do not count towards meeting minimum wage requirements.

Stating that drivers earn $17.00 to $21.50 an hour is misleading because it does not reflect the expenses they incur.

Actually Greg, tips DO apply to minimum wage. Mileage is a tax exempt compensation for wear and tear on the car, so it is NOT a wage, thusly does not apply to driver’s minimum wage. Tips are a normal, everyday occurrance and just like waitstaff, bartenders, hair dressers, bellhops, cabbies, and doormen, should be both declared and considered part of the employee’s income. Maybe it’s different in Virginia, but in Vermont, the minimum wage for tip receiving employees (meaning the employee had to earn at least $120.00 in tips for the month) is $3.91 per hour. If the employee doesn’t make enough tips to achieve the Vermont minimum wage of $8.06, the employer is required to make up the difference. I’ve never had a night, not EVER, where my wages and tips weren’t in excess of minimum wage. http://labor.vermont.gov/Portals/0/Wage%20Hour/C-9%20Info%20on%20Tipped%20and%20Service%20Employees.pdf Since most drivers think of their mileage as money they receive, it is frequently considered (by the driver) a part of their earnings. Since none of my crew keep a log, they just commingle that money with their wages and tips. I prefer to simplify my life by thinking of my money like this: Wages, tips, mileage, and profit share essentially equals gross income. Gross income minus expenses yields net income. Life is only as hard as you make it.

Tips can only be applied to offset wages paid if an employer takes advantage of the “tip credit” provision of the FLSA and local laws. Tips are not wages. Wages are the money paid by the employer to the employee for work performed.

It is tax exempt, because it is not income. After mileage is offset by expenses, there is no net income to tax.

You see here, you get it right, tips are income and are therefore taxed as wages are which is also taxed.

Virginia follows the federal min wage laws. Minimum tip credit wage is 2.13 per hour under federal law.

Sadly, this is true for the vast majority of delivery drivers. As long as they bring home cash each night, they rarely stop and figure out what their expenses are compared to reimbursement and even less ever know what the laws says about the situation. I am working to change that.

When employers across the country big and small take advantage of employees’ ignorance of the details of their pay and profit by under paying and/or reimbursing drivers, the devil is in the details. Drivers ignore that at their own peril. Many owners bank on it. Literally.

D-no
There is no point in trying to educated gregster. He is a labor lawyer, CPA, IRS agent, and a DOL agent when he is not delivering for someone that is underpaying him or trolling on this forum.

It seems that since you can’t argue with the points I make, you must attack the messenger. :roll:

Been There Done That. You just don’t get it! You are taking many things way out of context and many things you are pontificating on are so far beyond your expertise that you have made yourself the laughing stock of the Think Tank.

I stand on what I said in my previous post. If you can refute what I have said, have at it.