BAAQMD and MTC Approve Commuter Benefits Pilot Program

BAAQMD and MTC Approve Commuter Benefits Pilot Program

Tuesday, March 25, 2014

The Bay Area's first regional Commuter Benefits Program requires business with more than 49 full-time employees in the Bay Area to offer transportation-related benefits to their staff. BAAQMD's Board of Directors unanimously approved the program on March 19, 2014, and the program was launched jointly by BAAQMD and MTC in March. Employers subject to the program are notified by mail, and must select what benefits they will offer, register at 511.org, and implement their program by September 30, 2014.

BAAQMD and MTC developed the Bay Area Commuter Benefits Program in response to Senate Bill 1339, signed into law by Governor Brown in September 2012. SB 1339 authorizes BAAQMD and MTC to adopt and implement the Commuter Benefits Program on a pilot basis through the end of 2016.

The Bay Area program was modeled on commuter benefit ordinances established in 2009 in San Francisco, Berkeley and Richmond, and at SFO, and gives employers various options for compliance, including:

  • Pre-Tax Benefit - Allow employees to exclude up to $130 of their transit or vanpooling expenses each month from taxable income.
  • Employer-Provided Subsidy - Provide a subsidy to reduce or cover employees’ monthly transit or vanpool costs, up to $75 per month.
  • Employer-Provided Transit - Provide a free or low-cost transit service for employees, such as a bus, shuttle or vanpool service.
  • 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 their employers to reduce their Social Security and Medicare payroll taxes. Employees can save as much as 40 percent on their monthly transit or vanpool costs by excluding these costs from taxable income.

“We expect by far the majority of employers will choose to offer the pre-tax benefit option to their employees,” said MTC Chair and Orinda City Councilmember Amy Rein Worth. “This option imposes no new costs on employers. And it gives employees complete freedom to choose whether to use the benefit.”

“The Commuter Benefits Program just makes sense – it saves money through potential payroll tax savings for employers and employees while reducing worker stress, traffic congestion and improving air quality,” said Jack Broadbent, BAAQMD's executive officer. “Bay Area employers and employees can now play a direct role in helping the region achieve clean air and a better quality of life.”

James Paxson, general manager at Pleasaton's Hacienda Business Park, agrees. “Employees who have options for their commute, beyond driving alone, tend to be more productive in their work and have an overall higher level of job satisfaction," he says. "All of which is good for business.”

Commuter benefits are also good for the environment, and research shows that employees are more likely to consider transporation alternatives like rideshare, transit, biking, and telecommuting, if encouraged by their employer.To help employers comply, MTC’s 511 Regional Rideshare Program will has created an “Employer Guide” at 511.org.