Benefit News

Commuter Benefits Program Now Required For Bay Area Employers

April 24, 2014

The Metropolitan Transportation Commission and the Bay Area Air Quality Management District (Bay Area Air District) recently approved the establishment of the Bay Area Commuter Benefits Program (Program) to implement the requirements of California Senate Bill (SB) 1339. SB 1339 was signed into law in 2012 and is now codified in California Government Code section 65081. The Program is on a pilot basis through December 31, 2016.

Program Requirements

The Program requires employers located within the geographic boundaries of the Bay Area Air District (those located in Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano and Sonoma Counties), that have 50 or more full-time employees within the Bay Area, to offer a commuter benefit option to their "covered" employees no later than September 30, 2014.

For purposes of determining whether or not an employer has 50 or more full-time employees, and thus subject to the Program, the following rules apply:

  • The employee count is based on the average number of full-time employees in the Bay Area carried on the employer's payroll over the course of the most recent three-month period.
  • An employee is defined as anyone who receives a W-2 form from the employer (i.e., does not include independent contractors).
  • A "full-time employee" is defined as an employee who has worked an average of at least 30 hours per week during the previous calendar month. Seasonal or temporary employees who work less than 120 days per year are excluded.

Covered Employees

The commuter benefit must be offered to all "covered" employees, which are defined as employees who worked an average of 20 or more hours per week within the previous calendar month, excluding seasonal or temporary employees working 120 days or less per year.

How to Comply

Employers may choose one (or more) of the following four options to comply with Program requirements:

  • Option 1: Pre-Tax Benefit - Allow employees to exclude up to $130 of their transit or vanpooling expenses each month from taxable income.
  • Option 2: Employer Provided Subsidy - Provide a subsidy to reduce or cover employees' monthly transit or vanpool costs, up to $75 per month.
  • Option 3: Employer Provided Transit - Provide a free or low-cost transit service for employees, such as a bus, shuttle or vanpool service.
  • Option 4: Alternative Commuter Benefit - Provide an alternative commuter benefit that is as effective in reducing single-occupancy commute trips as either Option 1, 2 or 3. To assist employers, the Metropolitan Transportation Commission and Bay Area Air District provide possible measures that employers can choose from to submit a "pre-approved" alternative.

Coordination with Local Commuter Benefit Ordinances

Employers in the cities of San Francisco, Richmond, and Berkeley, as well as those within the jurisdiction of the San Francisco International Airport, are also subject to local commuter benefit ordinances. While the substantive provisions of these local ordinances are very similar to the requirements of the Program, the local ordinances apply to employers with either 10 or more employees (Richmond and Berkeley) or 20 or more employees (San Francisco and San Francisco International Airport) nationwide that have a worksite in the relevant city, versus the Program's 50 minimum full-time employee threshold.

Thus, employers subject to any of these local ordinance requirements should also be in compliance with the Program's requirements. However, to avoid duplication of effort, these local jurisdictions have agreed that all employers that are subject to the Program (i.e., employers with 50 or more full-time employees in the Bay Area) should report to the Program. Employers with less than 50 full-time employees will still need to comply with the local ordinance requirements applicable to their worksite location(s).

Next Steps for Employers

Employers subject to the Program must select and implement their program by September 30, 2014. Accordingly, employers should undertake the following action items:

  • Evaluate the four commuter benefit options listed above and select one (or more) of the options to offer to your employees. If you have already implemented a commuter benefit program to comply with a local ordinance, confirm your program complies with one of the Program's options.
  • Designate a person (known as a Commuter Benefits Coordinator) to complete the registration form and report to the Metropolitan Transportation Commission/ Bay Area Air District.
  • Go to the Program's website (www.511.org) and register.
  • Notify employees of the commuter benefit that will be offered to them; make the benefit available no later than September 30, 2014; and inform your employees on how to enroll or otherwise take advantage of the benefit.
  • Keep records to document implementation of your commuter benefits program and make the records available to the Metropolitan Transportation Commission and/or Bay Area Air District upon request.

Program information and employer outreach staff assistance is available by clicking on the applicable links on the Program's website, or by simply calling "511" and say "Commuter Benefits" at the first prompt. Detailed information about the Program and employer requirements also can be found in the "Employer Guide" at https://commuterbenefits.511.org/docs/employer_guide.pdf, and in a "Frequently Asked Questions" document at https://commuterbenefits.511.org/docs/faq.pdf.

For additional information, please contact your Burnham Benefits Consultant, Burnham Benefits at 949-833-2983, or inquiries@burnhambenefits.com.

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