Manager compensation for vehicle use

How do you handle manager using their own vehicle for the park?
Manager has a pickup truck. Does occasional dump runs, may go pick up materials, go to town office that sort of thing. No plowing. She gets paid by the hour for this type of work and manual labor. Also gets paid based on the number of occupied lots which equates to free lot rent. 34 occupied lots. Park doesn’t own any vehicles.

We have a very similar situation going on in a park we bought last week. For us, we are ok with paying for these petty charges while we reposition the park only because it’s not really that expensive and the manager is worth more than we currently pay him. My suggestions would be to look at what you get vs. what you are paying for. If it isn’t worth it, then cut her off and develop a new system. Traditionally, we wouldn’t pay for that stuff. However, each park has its own unique attributes that can make you bend your own rules.

Do you pay them a mileage rate?

My biggest concern here is insurance. Have you talked to your agent? One accident and you’re potentially screwed if you don’t have the right insurance in place. Beyond that, I’d be careful on the precedent you set. You might give them a flat amount that more than covers any perceived gas cost. But I would just load that into their monthly amount and not identify it separately.

But I can’t emphasize enough that you need to call your insurance agent and give him or her the full details and make sure you are insured on Monday without fail.

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Good advice. I have her as an independent contractor. She operates a cleaning business of her own and uses her truck for that as well. Still exposure I hadn’t thought of.

If she has her own business using her vehicle then you do not need to compensate her for the use of her vehicle. She will be writing off all of her vehicle expenses under her other business. You already have her compensation level set including the existing vehicle costs.

When I was in construction, I either received a flat check for vehicle use like $500/month or I just kept track of mileage and was compensated monthly.

Frank saw this one coming. Here is what I have learned from the insurance company.

  • Be sure to have workman’s comp insurance even if you don’t have any employees. (I do.) This is important in case their contractor status is viewed differently or they don’t have insurance.
  • Have them sign an indemnification agreement. i.e. hold you harmless. They will probably want a counter for them.
  • Consider 1M umbrella insurance $750 on top of 1M/incident 2M total
  • Make sure their auto insurance is business and personal (It is)
  • Consider adding use of hired non-owned vehicle to your business liability policy.$300
  • My insurance company would like to be named as an additional insured. I don’t think many contractors will go along with that.
    And, it is probably best to be charged a hauling fee rather than pay for mileage or vehicle compensation.
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