If your fleet has a driver toll chargeback policy, then it means that drivers may need to pay for certain costs such as toll violations and personal vehicle use. There are certain rules that need to be followed through the FLSA and state wage deduction requirements, so it’s critical to ensure that your fleet driver chargeback policy is in full compliance.
The problem with not having a formal chargeback policy is that seemingly small costs can really cut into your budget over time. Additionally, these extra activities and expenses can result in driver disputes and liability issues if something goes wrong. In this guide, we are taking a look at the legal framework of having a driver toll chargeback policy and the different types of models that you might consider for your fleet.
What Is a Driver Toll Chargeback Policy?
A driver toll chargeback policy is a written set of guidelines that outlines which toll charges, violations, and administrative fees can be passed back to the fleet drivers. The policy must also outline the conditions that need to be met in order for drivers to be charged for these expenses.
This policy covers anyone in your fleet who is behind the wheel, including employee drivers, contractors, and other team members who are operating the vehicles. The most common types of chargebacks include:
- Missed payment toll charges
- The costs of using the vehicle for personal reasons (after-hours use)
- Violations, especially when there are intentional or repeated fines
The Legal Framework for Charging Drivers
It’s critical that you have a thorough understanding of what is allowed through the FLSA. For example, if you enforce a toll violation chargeback to a driver, then the driver’s pay cannot be reduced below the minimum wage. In addition to complying with this federal requirement, also make sure that you are staying in compliance with state-specific limits.
Also, the driver must be presented with a written version of this policy and acknowledge in writing that they have received and understand how driver chargebacks work. This step should be handled as soon as the driver is onboarded, so that chargebacks are clear in advance.
Can an employer charge a driver for toll violations without written consent? In most states, no, companies are not allowed to charge unexpected fees to drivers when there is no driver toll chargeback policy in place. Also, keep in mind that these policies need to be in writing. Verbal agreements are not enforceable, which means that just because a conversation occurred, you cannot deduct from the driver’s payroll if you don’t have written consent.
The 4 Chargeback Models to Consider
There are several options that you might use if you decide to implement a driver toll chargeback policy. Here are a few ways that you might structure this policy:
- 100% Driver Responsibility: With this type of policy, the driver holds full responsibility for paying both tolls and violation charges. This structure is only legal in certain states, and you must have a signed agreement in place.
- Fault-Based Chargebacks: This tiered approach involves increasing consequences depending on the number of offenses that have occurred. For example, the first chargeback might be a small amount, but the 2nd or 3rd offenses will be more expensive until the driver is paying the full cost of the tolls or violations.
- Personal Use Chargeback: If you are using a geofence-based system, then the driver is automatically charged for any tolls that occur outside the designated zone or when they are operating the vehicle after hours.
- Personal Use Stipend: One solution that fleets use is to allow a flat-rate stipend for personal use, usually around $150 to $200 per month. This allows personal-use costs without the administrative burden of tracking every personal toll that comes through.
7 Clauses Every Driver Toll Chargeback Policy Must Include
When you have a written policy in place that enforces a toll violation chargeback to the driver, it’s smart to include a few specific clauses in the agreement:
- Scope: Include a clear definition of covered vehicles and how the policy applies to which drivers.
- Chargeable Events: The policy should have a detailed list of events that might result in a chargeback, such as tolls, admin fees, late fees, and court fees.
- Personal vs. Business Use: Clarify how it is determined whether the driver is on a personal trip and when the chargebacks will be implemented, usually based on GPS or transponder data.
- Dispute Window: Drivers need a set amount of time, usually 14 days, to dispute any chargebacks. They can provide supporting documentation to show that they shouldn’t be paying the chargeback.
- Deduction Method: Your fleet needs to know in advance how to deduct toll violations from an employee’s paycheck, as well as when the payroll deductions will be coming through.
- FLSA Protection: Include language that reinforces FLSA compliance. For example, the policy should explicitly prohibit deductions that lower a driver’s pay below minimum wage
- Driver Acknowledgment: The policy isn’t complete until the driver has signed their acknowledgment. Make sure that this page is signed as soon as possible when each driver joins the fleet.
FAQ
Can my company legally deduct toll violations from my paycheck?
Yes, your company can deduct toll violations from your paycheck, but only if a driver toll chargeback policy is already in place and the deductions comply with both federal and state wage deduction laws.
What if a driver disputes a toll charge?
A good driver toll chargeback policy will include a defined window of time that allows the driver to file a dispute. Most policies have a 14-day timeframe where drivers can provide documentation to dispute the charge.
Build a Compliant Toll Chargeback Program with Innovative Toll Solutions
If you are planning to implement a driver toll chargeback policy, then it’s critical to have a reliable fleet toll management system in place. At Innovative Toll Solutions, we’re here to help you implement an effective and compliant system that helps you stay ahead of transactions and ensure that recoverable chargeable costs never slip through the cracks.
For more information, contact us to discuss your fleet technology needs.