By January 1, 2016, all employers in the District of Columbia with 20 or more employees must provide certain transportation benefits to their employees who work in the District. The law (DC Law 20-142), signed on July 29, 2014 by then Mayor Vincent Gray, requires that employers in the District provide to employees at least one of the following three options:
- A pre-tax transportation fringe benefits program consistent with Section 132(f)(1)(A), (B) and (D) of the Internal Revenue Code that provides “commuter highway vehicle, transit, or bicycling benefits...at least equal to the maximum amount that may be deducted for those programs from an employee’s gross income” set by the Code. The Internal Revenue Code currently sets this maximum at $100 per month for transportation in a commuter highway vehicle or transit pass and $175 for parking;
- An employer prepaid benefit program whereby, at the election of the employee, an employee can receive a transit pass for public transportation of the employee’s choice or “reimbursement of vanpool or bicycling costs in [an] amount at least equal to the purchase price of a transit pass for an equivalent trip on a public transit system.” The forms of public transportation include transit passes for travel on any bus, streetcar, or train operated by the Washington Metropolitan Area Transit Authority, Maryland Area Regional Commuter, Virginia Railway Express, or Amtrak; or
- Transportation provided by the employer at no cost to the employee in a vanpool or bus that is operated by or for the employer.
In general, a transportation fringe benefit program that provides the maximum benefit available under Section 132(f) of the Internal Revenue Code will comply with the new DC requirement, but employers who do not already offer such a benefit program will need to develop one by January 1, 2016. Employers that fail to offer one of the transportation benefits outlined above are subject to potential fines and penalties pursuant to the District of Columbia Department of Consumer and Regulatory Affairs Civil Infractions Act of 1985.