Effective January 19, 2009, San Francisco employers are required to offer a commuter benefits program to encourage employees to use public transit or vanpools. Employers can offer commuter tax benefits as a payroll deduction, a subsidized benefit, or a combination of the two. Employers can administer the benefit themselves, purchasing the transit tickets or vouchers each month and distributing them to employees, or may hire a third-party administrator to manage their program.
The new program requires all employers in San Francisco that have 20 or more persons performing work for compensation on a full-time, part-time, or temporary basis and who work an average of at least 10 hours a week while working for the same employer within the previous calendar month, to offer one of the following options:
- Pre-tax Transit: Employer sets up a deduction program under existing Federal Tax Law 132(f), which allows employees to use up to $115 a month in pretax wages to purchase transit passes or vanpool rides. SF Environment (San Francisco’s Environment Department) is available to assist businesses in self-administering a benefit program or can offer assistance with hiring a third-party administrator.
- Employer Paid Transit Benefits: Employer pays for workers’ transit fares on any of the San Francisco Bay Area mass transit systems or reimburses workers for their vanpool expenses. Reimbursements for transportation expenses must be of at least an equivalent value to the purchase price of a San Francisco MUNI Fast Pass, which is presently $45.
- Employer Provided Transit: Employer offers workers free shuttle service on a company-funded bus or van between home and place of business., employers with 20 or more employees, whether in or out of the city, must provide commuter benefits to non-exempt employees who perform at least 10 hours of work in the City each week. Employers must either:
As far as we've heard, the ordinance is the first of its kind. Employers who fail to comply may be issued administrative citations and fines by San Francisco’s Department of the Environment. You can find more information on the Commuter Benefits Ordinance on San Francisco's Department of Environment website.