S.F. Bay Area Employers Must Provide Commuter Benefits by September 30

Topics: Employee Benefits, New Laws & Legislation

The Bay Area Commuter Benefits Program, SB 1339, was enacted in 2012 to allow two local Bay Area agencies—the Metropolitan Transportation Commission and the Bay Area Air Quality Management District—to jointly adopt a commuter benefit ordinance requiring  employers to offer commuter benefits to covered employees.  These agencies have now adopted a Commuter Benefit rule requiring larger Bay Area employers to offer specified commuter benefits to covered employees by September 30, 2014 as a means of encouraging carpooling and use of public transporation.

Covered Employers

The new Rule applies to employers with an average of 50 or more full-time (30 hours of work per week) employees performing work within the following nine Bay Area counties:  Alameda, Contra Costa, San Mateo, Marin, Napa, San Francisco, Santa Clara, southern Sonoma County, and southwestern Solano County.  For purposes of determining whether an employer has an average of at least 50 employees, the look back period is the most recent three month period.

Covered Employees

The Rule requires covered employers to provide the commuter benefits described below to employees who perform an average of at least 20 hours of work per week (the average looks back to the previous calendar month) within the counties listed above, excluding a seasonal or temporary employee (an employee who works 120 days or less within the calendar year).

Required Commuter Benefits

By September 30, 2014, covered employers must offer at least one of the following commuter benefit options to covered employees:

• Pre-tax option:  A program, consistent with section 132(f) of the Internal Revenue Code, allowing covered employees to elect to exclude from taxable wages costs incurred for transit (bus, rail or ferry) passes or vanpool (a vehicle with a carrying capacity of at least six adults, not including the driver) charges, up to $130 per month;
• Employer-paid benefit:  A program whereby the employer pays employees a subsidy of up to $75 to cover the cost of commuting via transit or by vanpool; or
• Employer-provided transit:  transportation provided by the employer to covered employees at no cost or low-cost via bus, shuttle, or vanpool.

In lieu of these options, an employer may offer an alternative benefit that provides at least the same reduction in single-occupancy vehicle trips as the three options identified above.  Any alternative benefit must be submitted to and approved, in writing, by the Bay Area Air Quality Management District.

Administrative Requirements

Covered employers are required to designate a Commuter Benefits Coordinator who is responsible for implementing the employer’s commuter benefit program and for complying with the Rule.  Covered employers must also register online with the Bay Area Air Quality Management District and provide specified information before September 30 and annually thereafter.  Covered employers must also provide notice of the Rule and the employer’s commuter benefits to covered employees.  Finally, the Rule imposes a recordkeeping requirement of 3 years for records establishing compliance with the Rule.