Commuter Benefits Program

Senate Bill 1339 signed by the Governor in fall 2012 authorizes the Air District and MTC to jointly adopt a regional commute benefit program. Pursuant to SB 1339, the Air District and MTC are developing a Bay Area Commuter Benefits Program (Program) to promote the use of alternative commute modes such as transit, ridesharing, biking and walking. The Program would require employers with 50 or more full-time employees in the Bay Area to offer one of the following benefits:

  • Option 1 - Pre-Tax Option: Allow employees to pay for their transit or vanpooling expenses with pre-tax dollars, as permitted by current federal law;
  • Option 2 - Employer-Provided Subsidy: A transit or vanpool subsidy to reduce or cover the employees' monthly transit or vanpool costs;
  • Option 3 - Employer-Provided Transit: A free or low-cost bus, shuttle or vanpool service (operated by or for the employer); or
  • Option 4 - Alternative Commuter Benefit: An alternative method that would be as effective as the other options in reducing single-occupant vehicle trips (and/or vehicle emissions).

When will the policy go into effect?

While the bill authorizes BAAQMD and MTC to adopt this policy on or after January 1, 2013, schedules for adoption are being considered at this time, and have not yet been finalized. Once the policy is adopted, affected businesses will have an additional six months to comply.

A final proposed program will be presented to the Air District and MTC governing boards in early 2014. The program would take effect upon approval by the governing boards of both agencies.

Which business will be affected by the policy?

The policy will cover Bay Area businesses with an average of 50 or more full-time employees working at any location within Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo and Santa Clara counties, plus the southwest portion of Solano County and the southern portion of Sonoma County. For precise details of the Solano and Sonoma county boundaries visit http://www.baaqmd.gov/The-Air-District/Jurisdiction.aspx

Why are we doing it?

The Bay Area Commuter Benefits Program would help to reduce emissions of air pollutants and greenhouse gases, thus protecting public health and the climate. Despite the fact that California has the most stringent motor vehicle emission control program in the world, motor vehicles are the largest source of air pollution and greenhouse gas emissions in the Bay Area. Cars emit more pollution when they are stuck in traffic, and traffic congestion in the Bay Area is among the worst in the nation.

In addition to protecting the environment and reducing traffic congestion, the Program would provide tangible financial savings for employers and employees who take advantage of the pre-tax provisions in Option 1.

Who is eligible to receive the benefit?

A person who works for a covered employer and who worked an average of 20 or more hours perweek in the prior calendar month. who works for a covered employer and who works an average of 20 or more hours per week in the prior calendar month.

What is the financial impact for an impact for an employer subject to the policy?

As noted in question 1, the policy offers employers a menu of options for compliance, including Option 1 where the employer is simply required to offer its employees the option to pay for their transportation benefit with pre-tax dollars. If no employees accept this offer, the employer will nevertheless be deemed in compliance with the measure as long as the employer makes a good-faith effort to inform the employees of the option. Typically, employer cost savings associated with lower payroll taxes outweigh any payroll adjustment costs.

In Bay Area cities where these policies are already in place, most employers have chosen the pretax option. SB 1339 offers substantial economic benefits to employers and employees, which will ripple outward through the regional economy. Employers can reduce payroll taxes (roughly 9 percent of subject wages), and employees can lower their commute costs by up to 40 percent.

For more information...

Download the Fact Sheet or visit http://rideshare.511.org/employers/ to stay up to date on the latest information about the policy.

 

In partnership with: