Unified Grocers Auto Reimbursement Program
1.0 SCOPE Scope. Unified Grocers auto reimbursement program is available to all regular, full-time employees who drive an automobile on company business in the normal completion of their work assignment. This policy and procedure is adopted effective June 1, 2003 and supersedes all prior plans, practices, agreements, and procedures. 1.1 Purpose. To define the requirements for participation in the automobile reimbursement program and outline the benefits provided for employees who are eligible for automobile reimbursement. 1.2 Policy. Weekly automobile reimbursement will be paid to all regular, full-time employees who meet the eligibility requirements. Automobile reimbursement is considered a reimbursement for the business expenses associated with operating a vehicle, and as such, will not be subject to income tax withholding. 2.0 ELIGIBILITY 2.1 Regular, full-time employee. Regular, full-time employees who work 30 hours or more per week are eligible for automobile reimbursement. Company officers, employees of Grocers Development Center, employees who are provided a company-owned vehicle at no cost, and employees covered by a collective bargaining agreement are not eligible for auto reimbursement. Employees who are on a Leave of Absence, who are otherwise eligible for auto reimbursement, will not receive reimbursement for the weeks when they are on inactive status. 2.2 Drive 750 miles per month. Auto reimbursement is provided to eligible employees who regularly drive at least 750 miles per month in the completion of their assigned duties. This requirement to drive 750 business miles per month will be determined based on monthly expense reports, showing the business miles driven. It is essential that expense reports are submitted each month with the total miles driven. Commuting distance to the office or to the first work site during the day and travel from the office or last work site to the home will not be considered toward this 750 mile per month minimum. 2.2.1 Newly hired employees who are expected to drive at least 750 miles per month in the regular completion of their work duties will be granted auto reimbursement as of their hire date. 2.2.2 If an employee who is already receiving auto reimbursement falls below 750 miles in a month, they will have a 1-month grace period before auto reimbursement is stopped. If they drive at least 750 miles during this 1-month grace period, their auto reimbursement will be continued. If they fail to drive 750 miles during this 1- month grace period, their auto reimbursement will be stopped and they will be reimbursed for all business driven at the current rate established by the Company in conjunction with IRS guidelines. 2
2.2.3 Current employees can qualify or re-qualify for auto reimbursement by driving at least 750 miles a month for a 3-month period, and submitting the Acknowledgement, Pull Notice Application, and Proof of Insurance. If the employee qualifies, the auto reimbursement payments will begin the first week of the month following the month they qualified and submitted the required forms. 2.3 Maintain a valid driver s license. To qualify for automobile reimbursement, employees must have a valid driver s license and maintain that license without suspension or restrictions. Prior to receiving automobile reimbursement, employees must agree to participate in the Company s Pull Notice Program as explained in section 4.0. 2.4 Proof of automobile insurance. To qualify for automobile reimbursement, employees must maintain adequate liability insurance for bodily injury and property damage and must be able to show proof of insurance upon request. Insurance coverage of $100,000 for bodily injury and $300,000 per accident is required, but never less than the state s specified minimum requirements. 2.5 Good driving record. To qualify for auto reimbursement, employees must maintain a good driving record. Moving traffic violations that result in the revocation, suspension, or restrictions on the driver s license will cause the auto reimbursement to be stopped until the license is reinstated with no restrictions. Chargeable accidents (where the employee is at fault) that occur while driving on company business can also cause the non-taxable auto reimbursement to be stopped. See Section 4.2 for more details. 3.0 AUTO REIMBURSEMENT BENEFITS 3.1 Weekly Auto Reimbursement. Auto reimbursement will be paid as part of each weekly paycheck. Auto reimbursement is considered a non-taxable reimbursement of a business expense so no taxes will be withheld from this amount. Weekly auto reimbursement is intended to help assist with the cost of a vehicle, registering the vehicle, and maintaining adequate auto insurance coverage. The current weekly auto reimbursement is shown in Attachment 1. 3.2 Reimbursement for business miles. In addition to weekly auto reimbursement, each qualified employee will receive an additional payment for business miles driven. This reimbursement for business miles driven is intended to cover the cost of fuel, lubricants, tires and regularly scheduled vehicle maintenance. Employees will receive reimbursement for business miles driven by completing a monthly expense report showing miles driven. Commuting miles from the home to the office or to the first work site are not considered business miles driven and no reimbursement will be made for these miles. The reimbursement rate for business miles driven may change from time to time as operating costs change. The current reimbursement rate for business miles driven is shown in Attachment 1. 3.3 Payment for excess mileage. For those drivers that travel more than 25,000 business miles in a fiscal year, the Company will provide an additional mileage payment at the rate of $.15 per mile (15 cents). This payment is in addition to any weekly auto reimbursement or reimbursement for business miles and will offset the additional wear and tear on a personal vehicle. 3
3.4 Reimbursement for off-street parking. Overnight parking is an allowed expense only when the driver is away from home or workplace on Company business. Off-street parking during the workday is an allowable expense when no on-street parking is available or when on-street parking is not feasible. 3.5 Expenses not allowed. There will be no reimbursement for car washing, waxing, or cleaning. Fines and tickets for parking and moving violations will not be paid by the Company and are the sole responsibility of the driver. Failure to pay fines and tickets can result in suspension or revocation of a driver s license and loss of auto reimbursement. 4.0 PULL NOTICE PROGRAM 4.1 The State of California has instituted a Pull Notice Program designed to pull and notify the employer of traffic convictions regarding employees enrolled in this program. All newly hired employees receiving automobile reimbursement will be asked to complete a Pull Notice Application supplied by the Human Resources Department during the new hire process. Other employees, upon becoming eligible for auto reimbursement, will be asked to complete a Pull Notice Application prior to receiving auto reimbursement (see Attachment 2). Refusal or failure to complete the Pull Notice Application will result in the denial of auto reimbursement. 4.2 The Company will submit the completed Pull Notice Application to the Department of Motor Vehicles for enrollment in the Pull Notice Program. An employee s DMV record will be sent to the Company for review if the employee has an incident that generates action by the DMV. Notice of pending suspensions, revocations, or cancellations of driving privileges and/or driver s license will result in the loss of auto reimbursement. In addition, based on the severity of the offense, further disciplinary action may be taken: 4.2.1 All employees who operate personal, fleet, or company-leased vehicles as part of their job are required to promptly report to their immediate supervisor any action taken by the DMV, law enforcement agency, or court that will result in the their driver s license being revoked, suspended, or restricted in any way. An employee who fails to report such action may be subject to disciplinary action up to and including termination following discovery by the Company. 4.2.2 For a driver s license suspension of up to one month that conflicts with regular job performance, the employee may be required to use available vacation time off work to correct the problem. The Company may also, at its discretion, grant an unpaid Leave of Absence or place the employee on suspension without pay. During this time the employee is required to correct the problem so that the driver s license is no longer suspended or restricted. 4.2.3 An employee who has his or her driver s license revoked, suspended, or restricted for greater than one month, thereby limiting the employee s ability to perform his or her regular job, will be subject to termination. 4
4.3 For employees working outside the State of California, pull notice participant names will be submitted to the appropriate state department of motor vehicles. If necessary, a manual DMV report will be requested on an annual basis or greater frequency as determined by management. 5.0 NON-TAXABLE BENEFIT REQUIREMENTS 5.1 Auto reimbursement is provided to eligible employees on a non-taxable basis. To be eligible for this non-taxable auto reimbursement, Unified s program is considered a Fixed and Variable Rate (FAVR) Program, sometimes referred to as the Runzheimer Plan. Drivers must be in compliance with the four tests outlined by the Internal Revenue Service related to age of the vehicle, price of the vehicle, insurance coverage, and monthly mileage. 5.1.1 Age of the Vehicle. Non-taxable auto reimbursement cannot be provided if the vehicle driven is greater than four (4) years old. The intent of this test is to insure that the driver has an equivalent type vehicle to the base vehicle offered through the company leased vehicle program. In other words, the IRS wants to discourage a driver from being reimbursed on a non-taxable basis for a late model vehicle when/if the driver actually has a 10-year old vehicle that has already been fully depreciated. 5.1.2 Price of the Vehicle. Non-taxable auto reimbursement cannot be provided if the vehicle driven had a price, when new, of less than $15,000. Again, the intent of this test is to insure that the driver has an equivalent type vehicle to the base vehicle offered through the company leased vehicle program. In other words, the IRS wants to discourage a driver from being reimbursed for a $20,000 vehicle when/if a driver actually has a car that was valued at $12,000 when new, significantly less than the base vehicle in the company leased car program. 5.1.3 Insurance Coverage. Non-taxable auto reimbursement is provided to eligible drivers if they can show proof of auto insurance coverage as outlined in Section 2.4. The estimated cost of this coverage has been included in the weekly auto reimbursement and it is the driver s responsibility to purchase and maintain this coverage. The Company reserves the right to request proof of auto insurance coverage at any time. An employee s refusal or failure to provide such proof will disqualify them from the auto reimbursement program. 5.1.4 Monthly Mileage Test. Non-taxable auto reimbursement is provided to eligible drivers if they drive a minimum of 750 business miles per month. More information on meeting this mileage test is contained in Section 2.2. 5
5.2 Those drivers who do not qualify for non-taxable auto reimbursement because of the age of the vehicle, price of the vehicle, insurance coverage, or monthly mileage test will still be able to receive a reimbursement of business miles driven at the current rate established by the Company in conjunction with IRS guidelines. More information on this mileage reimbursement program can be found in Unified s Guidelines for Reimbursable Business Expenses. Claims for mileage reimbursement under this program are submitted using the existing expense reimbursement form. 6.0 ADMINISTRATION OF THE PROGRAM 6.1 Amendment and Termination. The Company reserves the right, solely and at its discretion and at any time, to amend or terminate this program and other related benefit programs. The Company has full and sole discretion to interpret and administer this program to the extent permitted by law, including but not limited to decisions concerning employee claims and the review of denied claims. 6
NON-TAXABLE AUTO REIMBURSEMENT Unified s auto reimbursement program is considered a Fixed and Variable Rate (FAVR) program, sometimes referred to as a Runzheimer Plan. The fixed portion of the program, your weekly auto reimbursement, is determined based on the area in which you live, the area where you conduct business, your type of driving (city, freeway, rural), and several other related factors. The following non-taxable auto reimbursements are effective April 1, 2009: Home Office Location Weekly Reimbursement Mileage Reimbursement Commerce $101.25 $.325/mile Santa Fe Springs $101.25 $.325/mile Los Angeles Bakery $102.00 $.325/mile Los Angeles Dairy $102.00 $.325/mile Covina - GMIS $101.25 $.325/mile Fresno Warehouse $105.00 $.325/mile Stockton Warehouse $100.00 $.325/mile Livermore Sales Office $97.85 $.325/mile Portland Offices $95.00 $.325/mile Phoenix Sales Office $102.00 $.325/mile Seattle $97.85 $.325/mile These amounts have been established as a result of a study conducted by Runzheimer International and are subject to change as vehicle acquisition and operating costs change. ATTACHMENT 1 7
PULL NOTICE APPLICATION Unified Grocers, Inc. participates in the Department of Motor Vehicle's "Pull Notice Program." This program provides employers with information about employee convictions of motor vehicle safety violations and any action the DMV takes against driver's licenses and certificates. Because driving is a required part of your job, and you are eligible to receive company-provided auto reimbursement, you will be included in the Pull Notice Program. This means that Unified Grocers, as your employer, will receive notices from the DMV whenever you have been convicted of motor vehicle violations, both on and off the job. The DMV will also inform the Company of any action it takes against your driver's license or any special certificate or permit. The Company will maintain a file of your driving record. Information received through the Pull Notice Program may affect your eligibility for company-provided auto reimbursement and can also be used as a basis for disciplinary actions up to and including termination of employment. Each time the Company is notified of a driving violation or action against your license, you will be counseled and may be subject to other personnel actions. As an employee covered under the Pull Notice Program, you are responsible for maintaining your driver's license in good standing, including a current DMV Medical Certificate if applicable, needed to do your job. You are also responsible for immediately notifying your immediate supervisor whenever you are convicted of a motor vehicle violation or have action taken against your driver's license, permit, or certificate. Action against your driver's license or a poor driving record may result in loss of your company-provided auto reimbursement and could result in termination of employment. I have received a copy of this notification. VEHICLE AND DRIVER INFORMATION Driver s License # State Class Date of Birth Make of Vehicle Model Model Year Insurance Provider Expiration Date Attach a copy of your Proof of Insurance Print Name: Signature of Employee: Date: Company Representative: Date: ATTACHMENT 2 8
Acknowledgement I acknowledge that I received Unified Grocer s Auto Reimbursement Policy and that I have read and familiarized myself with this policy. I also acknowledge that I am expected to adhere to this policy and to any subsequent revisions, changes and/or supplements provided to me during my participation within the program. If I have any questions regarding this policy, I will ask my supervisor or appropriate persons in the company s Human Resources Department. The Company reserves the right to revise, terminate and/or supplement this policy at any time. / / Print Name Signature Date ATTACHMENT 3 9