The Ultra Low Emission Zone (Ulez) has been expanded to include all of London’s boroughs, meaning Londoners who drive non-compliant vehicles five days a week will pay £3,250 a year.
A survey from the London Chamber of Commerce and Industry (LCCI), found a third of London businesses are worried that the fee will negatively impact their employees.
Ulez aims to reduce air pollution, and has been in place in central London since 2019.
A report published by the Mayor of London in February this year showed harmful pollution was reduced by 26% within the Ulez area since its introduction.
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Ronni Zehavi, CEO of HR software HiBob said employers could help limit costs by allowing more working from home.
Speaking to HR magazine, he said: “Paying an additional £12.50 per day to commute is a big ask of employees. Therefore, my recommendation is that employers lean into the world of hybrid work.
“Forcing employees to come to the office and pay the additional commuting cost poses significant retention risks – something I wouldn’t recommend in today’s business landscape.”
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Employers can also use benefits schemes to help employees switch to Ulez-compliant electric vehicles, according to Jonathan Watts-Lay, director, at financial wellbeing provider Wealth at work.
Speaking to HR magazine, he said: “Salary sacrifice electric car schemes typically enable employees to lease an electric car and pay for it monthly through pre-tax salary. This means employees pay less income tax and national insurance, making it one of the most cost-effective ways to drive an electric car.
“Electric vehicles generally also work out cheaper to service and maintain than the equivalent petrol and diesel models, although they can be more expensive to insure.”