Beginning this fall, employers with 50 or more employees in any combination of nine San Francisco Bay Area counties have to come into compliance with the Bay Area Commuter Benefits Program (CBP).
PrimePay can offer a qualified transportation plan that complies with two of the four San Francisco ordinance options required to be offered while still complying with all federal requirements.
The original state bill from 2012 only authorized the SF Metro Transit Commission (MTC) to create a regional ordinance they didn’t create anything until this year. The MTC this March (March 19, 2014) approved a pilot program that may be extended to as long as four years. This is not a permanent requirement at this time and is still being developed.
The requirements are as follows:
Any San Francisco Bay Area employer with 50 or more full-time employees located within the Area Air Quality Management District are currently required to register and offer commuter benefits to employees by September 30, 2014.
Click here to see where a covered employer registers.
A covered employer has to offer one or more of the following commuter benefits:
Option 1: Pre-Tax Beneﬁt - Allow employees to exclude up to $130 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.
Our current transportation subsidy plan (compliant with IRS section 132) may be used to comply with options 1 or 2 depending upon how you want to administer your plan.
That is, you could either offer employees the option of monthly pre-tax withholding up to the $130 federal limit or provide employer contributions of $75 monthly.
Mitch Geiger is an Employee Retirement Income Security Act (ERISA) attorney who works for PrimePay as Director, Regulatory Compliance, Benefits.