Commuter Benefits Laws and Ordinances: Does Your City Have Them? How Do You Comply?

Many municipalities are now requiring that employers offer commuter benefits programs for their employees. Essentially, commuter benefits work similarly to health benefits; if you work so many hours, your employer offers a solution to your daily commute to work that they are ultimately responsible for providing and executing. It is a pre-tax benefit, just like health insurance programs. Since 2009, beginning with cities in the Bay Area of California, several other major cities have implemented laws for companies to provide transportation solutions for the people who work for them. 

Even if you aren’t required by your city’s legislation to provide transit for your employees, it still can be a competitive advantage to attract workers to your company and fill open positions quickly. If you are required to provide transportation for your employees by law, or are curious as to what that looks like and where this is happening here are some basic characteristics of commuter benefits ordinances: 

  • Qualifying business or companies must have 20 or more employees (some exceptions)
  • Can offer employee-paid, pre tax benefits; employer-paid direct benefit, such as paying for a bus-pass, vanpool service, etc.; and/or the employer provides a shuttling service for employees
  • A written record of benefits and employees using the benefits must be documented
  • Violations for not complying with the law or ordinance

Here is a brief breakdown of each city with an ordinance or law, and any special circumstances for each individual city that makes it unique from another:

New York City

Signed: October 20, 2014

Effective: January 1, 2016

Grace Period: 6 months 

Requirements:

  • Company or employer must be non-government
  • Only offered to full-time employees

Violations: 

  • First offense: $250 fine paid to City of New York
  • Subsequent offenses: $250 fine for each offense

If you're a big company with lots of employees, the violations will add up quickly. 

Seattle

Signed: October 8, 2018

Effective: January 1, 2020

Grace Period: 1 year

Requirements:

  • Encouragement of vanpools to reduce carbon emissions and traffic
  • Can be offered beyond full-time employees
  • Office of Labor Standards has the right to investigate any complaints and conduct an investigation and hearing if evidence of violation is found.

Violations:

  • First offense: $500 fine
  • Subsequent offenses: $500 per grievance

Washington D.C.

Signed: 2014

Effective: January 1, 2016

Grace Period: 1 year

Requirements:

  • Because of the location, an “employee” must work at least 50% of the time in D.C.
  • Must have a contact person or entity for commuter benefits within company
  • Only offering parking reimbursement does not entail compliance

Violations:

  • First offense: $100 fine for each employee not offered benefits
  • Second offense: $200 fine per employee
  • Third offense: $400 fine per employee
  • Subsequent offenses: $800 per employee

Richmond, CA

Signed: Fall 2012

Effective: November 1, 2014

Grace Period: N/A

Requirements:

  • Have at least 10 employees who average 10 hours a week
  • Allows for other creative solutions for compliance that must be approved by City of Richmond

Violations:

  • None documented

Berkeley, CA

Effective: 2009

Grace Period: N/A

Requirements:

  • Have at least 10 employees who average 10 hours a week
  • Allows for bicycles to be eligible for employer reimbursement

Violations:

  • None documented

San Francisco Bay Area

Signed: September 30, 2012

Effective: March 26, 2014

Grace Period: N/A

Requirements:

  • Have at least 50 full-time employees 
  • Allows for other creative solutions for compliance that must be approved by Bay Area Air Quality Management District

Violations:

  • Financial penalty that is determined on a case-by-case basis

New Jersey

Signed: March 1, 2019

Effective: March 1, 2020

Grace Period: 1 year

Requirements:

  • Program is state-wide
  • Must conduct a public awareness campaign

Violations:

  • First offense: Between $100 and $250 fine
  • Employer has 90 days to offer commuter benefits
  • Subsequent offenses: $250 fine every 30 days, capable of accruing interest

Los Angeles

Signed: August 20, 2018

Effective: January 1, 2020

Grace Period: 6 months

Requirements:

  • Program is county-wide
  • 50 or more full-time employees
  • Law, rather than an ordinance, like all other areas

Violations:

  • First offense: $100 fine
  • Second offense: $200 fine
  • Third offense: $500 fine
  • Can be charged up to $800

Philadelphia 

Passed: June 9, 2022

Effective: December 31, 2022

Requirements:

  • 50 or more full-time employees
  • Program can use bicycle and public transportation compensation, in addition to pre-tax benefits program

Violations:

  • First offense: Written warning
  • Second offense: Fines ranging from $150-$300 per day of noncompliance

Another thing all of these laws and ordinances have in common: an explicit purpose to reduce carbon emissions and pollution. Whether you find these ordinances daunting or impactful, the increased usage of carpooling and public transit has the potential to greatly reduce our carbon footprint, while also providing a competitive advantage to why someone should choose a company that offers commuter benefits over one that doesn’t. 

The reality is that commuter benefits laws are only increasing in popularity, especially for large cities. It may be worth researching MaaS companies so that you are either compliant with your state’s policy (hopefully you already are) or are ahead of the curve. 

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