Transportation

Commuter Benefits

To encourage the use of public transit and carpools by providing significant savings on commuter costs – in turn aiding in traffic, greenhouse gas and air pollution reduction.

Topic Areas Addressed:

Transportation

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Keywords:

cars, transportation, san francisco, commuters

Submitting Jurisdiction:

City and County of San Francisco

Effective January 19, 2009, San Francisco employers with more than 20 employees are required to offer a commuter benefits program to encourage employees to use public transit or vanpools.

San Francisco’s new Commuter Benefits Ordinance allows employers and workers to tap into an existing federal program to pay for transit passes and van pool expenses. Employers save up to 9% on payroll taxes and employees save up to 40% on their transit costs. The benefit works like other pre-tax plans such as retirement, dependent care, and medical reimbursement – however, it is much simpler.

Employers can offer commuter tax benefits as a payroll deduction, a subsidized benefit, or a combination of the two. Employers can also administer the benefit themselves by purchasing the transit tickets or vouchers each month and distributing them to employees, while some employers may find it more practical to hire a third-party administrator to manage their program.

Public Outreach and Education:

San Francisco Department of the Environment has setup a website and commuter hotline for commuters, employers and governmental agencies to learn about commuter benefits ordinance. Additionally, the Department has hosted various community workshops to educate employers on ordinance requirements. The ordinance website and hotline receives over a dozen inquiries on a daily basis. SF DOE has coordinated outreach activities and information dissemination with various local and regional transit operators, benefits administrators, and vanpool providers.

Target Audience:

Employers and employees in the private, public, and non-profit sector

Measurable Outcomes:

In San Francisco alone, over 20 thousand employees currently use commuter benefits to save on the cost of riding the bus, train, ferry, and vanpools.

Public Support & Opposition:

The San Francisco commuter benefits ordinance is supported by the following influential organizations: SF Chamber of Commerce, BOMA, and the San Francisco Bicycle Coalition.

The ordinance has been widely praised by transit advocates, benefits administrators and policy makers. It’s a landmark ordinance helping increase transit usage while saving employees and employers a significant cost on a monthly basis.

Fiscal Impacts:

No cost is incurred by the San Francisco Department of the Environment except for 1.0 FTE staff time to educate employers. Employers do not incur any cost as a result of this ordinance, and instead save up to 9% on payroll taxes. Also, there is no fiscal impact on employees participating in the program as employees would save up to 40% on their monthly transit or vanpool cost.

Legal Issues:

IRS 132f allows pre-tax deduction for both transit and parking: the San Francisco ordinance only mandates transit. The inclusion of parking benefit is a policy decision for respective parties.