The Bay Area has been ahead of the national curve in promoting a number of social and environmental issues - including improving air quality.
On March 26, 2014, the Metropolitan Transportation Commission (“MTC”) and the Bay Area Air Quality Management District (“Air District”) launched the Bay Area Commuter Benefits Program (“Benefits Program”). This move was modeled on the local commuter benefit ordinances that have already been adopted by several Bay Area cities, including Berkeley, Richmond, and San Francisco (as well as San Francisco International Airport).
Now that the agencies have acted, most Bay Area companies are required to implement one of four Commuter Benefit options for their Bay Area workforce, and register with the MTC/Air District, by September 30, 2014.
Overview of Bay Area Benefits Program
Pursuant to the joint authority granted to the MTC and the Air District under the California Senate Bill 1339 (“SB 1339”), in March 2014 the agencies finally launched the Benefits Program as a three year pilot program. The Benefits Program is aimed at decreasing motor vehicle travel and traffic congestion, reducing the emission of greenhouse gases and other air pollutants, and encouraging the use of mass transit, van pools, car pools, bicycling, and walking.
The Benefits Program became effective March 26, 2014, and covered Bay Area employers have until September 30, 2014, to comply with its requirements.
Covered Employers and Employees
Employers who have more than 50 full-time employees combined within the nine Bay Area counties are covered by the program and must provide certain Commuter Benefits under SB 1339. The nine Bay Area counties are Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, as well as portions of Solano and Sonoma. Covered entities include any private, public or non-profit entity.
Full-time employees are defined as any employee who normally works at least 30 hours per week and receives a federal W-2 Form for income tax purposes. The employee count is based on the average number of full-time employees on the payroll over the course of the most recent three-month period.
If the employer is a covered entity under the statute, it must provide Commuter Benefits to all employees who work in the nine county area at least 20 hours per week.
Actions For Bay Area Employers
By September 30, 2014, employers must implement one of the four Commuter Benefit options (discussed below) and register with the MTC. Employers who already offer Commuter Benefits that are consistent with one of the four Commuter Benefit options in the Benefits Program will simply need to register in order to comply. Some employers may need to modify or enhance their existing Commuter Benefits in order to achieve consistency with the requirements of the Benefits Program.
- Option 1 (A Pretax Option) -- Allow employees to exclude their transit or van pooling costs from taxable income to the maximum allowed by federal law (currently USD 130 per month) (Internal Revenue Code § 132(f));
- Option 2 (Employer Paid Benefit) -- Provide a transit or van pool subsidy to cover or reduce employees’ monthly transit/van pool costs (up to USD 75.00 per month);
- Option 3 (Employer-Provided Transit) -- Provide a low-cost or free shuttle, van pool or bus service, operated by or for the employer; or
- Option 4 (Alternative Commuter Benefit) -- Provide an alternative Commuter Benefit that would be as effective as one of the options in reducing drive-alone commuter trips and/or vehicle emissions.
In addition to offering employees the Commuter Benefits, covered employers must:
- Designate a Commuter Benefits Coordinator (typically an employee already handling payroll or employee benefits);
- Submit an online registration form to the Air District/MTC identifying which Commuter Benefit the employer is providing and specifying certain information about it to employees and work sites in the Bay Area. Employers are required to update their registration information on an annual basis;
- Notify employees of the Commuter Benefit option and make that option available; and
- Maintain records to document implementation of the Benefits Program requirements and showing compliance. The records must be retained for a period of three (3) years and made available to the Air District upon request.
Local Employer-Provided Commuter Benefit Ordinances
Four local jurisdictions (the cities of Berkeley, Richmond, San Francisco (City & County), and San Francisco International Airport) previously adopted local commuter benefit ordinances. While the substantive requirements for these local ordinances are very similar to the requirements of this regional Benefits Program, the local ordinances have more stringent eligibility thresholds (see table below).
Employers that are subject to the regional Benefits Program by virtue of having fifty (50) or more full-time employees in the Bay Area will report to the Air District/MTC. The Air District/MTC will share information with the local entities regarding the worksites within their respective jurisdictions that are subject to this Program. Smaller employers not subject to this Program should continue to work with the applicable entity according to their worksite location(s).
Click here to view table.
The Benefits Program does not require employees to take advantage of the Commuter Benefit or to change their commuting modes. It only requires employers to offer and make available a Commuter Benefit to all “covered employees” -- those who work more than 20 hours per week.
Employers have until September 30, 2014 to implement one of the four commuter benefit options, comply with the administrative requirements, and complete an online registration form with the Air District.
The Air District has authority to enforce the Benefits Program pursuant to the California Health & Safety Code. The Air District Enforcement Program typically uses a cooperative working relationship with the regulated entities, in conjunction with graduated levels of enforcement actions, in order to maintain compliance with air quality regulations. In most cases, an enforcement action can be settled by taking prompt corrective action and paying a monetary penalty.
SB 1339 has a sunset provision. The “pilot” program for Commuter Benefits expires on January 1, 2017. After that date, the California State Legislature will need to take action in order to extend the Benefits Program.
Further information regarding the program and registration is available at https://commuterbenefits.511.org/.
Other Unique Compliance Obligations for San Francisco Employers
The Ordinance joins several other existing employee-protective ordinances already in effect in San Francisco.
For example, San Francisco has its own hourly minimum wage that far exceeds the federal and state minimum wage. Effective January 1, 2014, the hourly minimum wage in San Francisco was increased to USD 10.74 per hour.
Passed several years ago, San Francisco is one of the few cities to require private employers to provide paid sick leave, and paid employee health care benefits, to their San Francisco workers.
Additionally, as of January 1, 2014, employers with 20 or more employees in San Francisco must consider employee requests for “flexible work arrangements” to care for a child, family member with a serious health condition, or parent over the age of 65.
Starting on August 13, 2014, under San Francisco's Fair Chance Ordinance (also known as "Ban the Box"), employers are prohibited from inquiring into an applicant's criminal history (i.e., criminal convictions and pending charges), on the job application or during the first live interview. The ordinance applies to employers who are located or doing business in San Francisco and have 20 or more employees, regardless of location. Click here to read more.
These ordinances also have their own posting, record keeping and anti-retaliation requirements.