Employers with at least 50 full-time employees in the San Francisco Bay Area must offer commuter benefits, such as payments for commuter transit passes made with employees’ pre-tax earnings, to any employee who works at least 20 hours per week no later than September 30, 2014.
Covered employers also must communicate commuter benefits information to employees, designate a commuter benefits coordinator, and register with the Bay Area Commuter Benefits Program (“CBP”). The CBP is a pilot program that will be effective until December 2016. The Bay Area Air Quality Management District (“Air District”) and the Metropolitan Transportation Commission (“MTC”) are authorized to adopt and implement the CBP.
The CBP applies to all public, private, or nonprofit entities that employ at least 50 full-time employees per week in the San Francisco Bay Area. For purposes of the CBP, the Bay Area includes all of Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, and Santa Clara counties, the western portion of Solano County, and the southern portion of Sonoma County. An employer’s total employee count is based on all Bay Area worksites combined. For example, an employer with 20 full-time employees in San Jose and 35 full-time employees in San Francisco, for a combined total of 55 full-time employees, is covered.
A “full-time employee” includes any employee who normally works at least 30 hours per week, other than any “field employee.” A “field employee” is any “employee whose primary job responsibilities are at temporary job site(s), and who does not report to the employer’s home office or other permanent job location.” The employee count is based on the average number of full-time employees on the payroll during the most recent three-month period.
An employer who reaches the 50-full-time-employee threshold after the effective date has six months in which to comply.
Employers must provide benefits to all “covered employees,” which is more broadly defined than “full-time employee.” Covered employees include all employees who have worked at least 20 hours per week within the previous calendar month within the Bay Area, other than seasonal or temporary employees. Seasonal or temporary employees are those who work 120 days or less per year.
Covered employers must offer one of the following commuter benefits:
- Pre-Tax Option: Exclusion from employees’ taxable wages commuting costs incurred for transit passes or vanpool charges to the maximum extent permitted by federal law (currently, $130 per month);
- Cash Subsidy: A transit or vanpool subsidy of up to $75 per month;
- Employer Transportation: A free or low-cost bus, shuttle, or vanpool service; or
- Alternative Benefits: Other benefits designed to reduce single-occupant vehicle use, such as a bicycle, carpooling, or walking subsidy, telecommuting, or a compressed workweek schedule. To assist employers in offering alternative commuter benefits, the Air District and the MTC developed a menu of primary and secondary measures from which employers can choose to submit “pre-approved” alternatives. Bay Area Commuter Benefits Program Employer Guide, at p. 8 (June 24, 2014) (available at https://commuterbenefits.511.org/docs/employer_guide.pdf). In addition to these choices, employers may propose a customized alternative benefit; however, they must demonstrate why the proposed alternative would be appropriate and effective at its worksite. If an employer develops a customized alternative, the Air District must approve the proposed customized benefit before the employer may implement it.
Notice, Recordkeeping Requirements
Employers must notify all covered employees of their commuter benefits program, the commuter benefits offered, instructions regarding how to participate, and contact information for the employer’s benefit coordinator. This information must be provided when the employer makes the commuter benefits program available and annually thereafter. New hires also must receive notice of the commuter benefits program when they receive other benefits information.
Employers must retain records regarding their program for at least three years and make them available to the Air District and MTC upon request.
Covered employers also must register their program online at 511.org and provide the following information:
- Employer name;
- Name and contact information for the employer’s commuter benefits coordinator and an alternate contact person;
- Number of full-time employees and covered employees at each Bay Area worksite;
- The commuter benefits provided; and
- A description of the employee notification and application process.
Following the initial registration, employers must update their registration information annually.
Violators of the CBP are subject to civil penalties for the enforcement of air pollution control laws pursuant to the California Health and Safety Code, including penalties of up to $10,000 per day.
Employees, however, are not required to change their behavior in terms of their commuting choices or participate in the employer’s commuter benefits program. Employers also are free to offer a commuter benefits program that is more generous than the CBP’s requirements, as long as the employer otherwise complies with the CBP.
Employers doing business in the San Francisco Bay Area should determine whether they are subject to the CBP. If they are and do not already offer a commuter benefits program, they should evaluate the four benefit options and select an option to offer employees. In addition, employers must designate a benefits coordinator, register for the CBP by September 30, 2014, and notify employees of its commuter benefits program.
If employers already offer a commuter benefits program, they should review it to ensure consistency with the CBP’s requirements. These compliant employers still must register for the CBP by the deadline. However, if an existing commuter benefits program is inconsistent with the CBP, the employer must modify it to conform to the CBP and comply with the CBP’s remaining registration and reporting requirements.