Senate Bill 1128, which passed the state legislature without any opposition, authorizes the Bay Area Air Quality Management District and the Metropolitan Transportation Commission to jointly continue the Bay Area Commuter Benefits Program, a program that requires employers with 50 or more full-time employees in the Bay Area to offer commuter benefits to their employees. Employers subject to the program are required by law to register via the program website, select a commuter benefit and offer their program to their employees. The goal of the program is to reduce greenhouse gas emissions and traffic congestion by using the federal tax code to encourage employees to commute by adopting alternatives to driving alone.
The Bay Area Commuter Benefits Program gives employers the flexibility to offer one or more of the following commuter benefit options to their employees:
• Option 1: pre-tax benefit – Allow employees to exclude up to $255 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 options 1, 2 or 3.
When employees choose the pre-tax benefit option, the reduction in taxable income allows employers to reduce their Social Security and Medicare payroll taxes. Employees can save as much as 40 percent on the cost of their monthly transit or vanpool expenses by setting the funds aside pre-tax. Employers subject to the Commuter Benefits Program will be notified by the Air District and must register at 511.org. Assistance is available through MTC’s 511 Regional Rideshare Program to help employers comply with the program. Employers can visit 511.org and click on Bay Area Commuter Benefits Program to get more information or call 511 and say “commuter benefits” at the first prompt to connect to employer outreach staff. Detailed information about the Commuter Benefits Program and employer requirements can also be found in the “Employer Guide” at 511.org.