Commuters in Sonoma County and elsewhere in the Bay Area could soon receive a benefit to help them get to work. The Metropolitan Transportation Commission and the Bay Area Air Quality Management District are launching a commuter benefits program, a joint pilot program that requires employers with 50 or more full-time employees in the Bay Area to offer commuter benefits to their employees.
Employers subject to the program must select a commuter benefit and implement their program by Sept. 30.
The commuter benefits program is a response to Senate Bill 1339, which is designed to give employers various options including offering their employees the ability to pay for transit or vanpooling with pre-tax dollars.
The Bay Area Commuter Benefits Program includes one or more of the following commuter benefit options employers can offer to their employees:
- 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.
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, according to the MTC. Employees can save as much as 40 percent on their monthly transit or vanpool costs by excluding these costs from taxable income.
The MTC says that employees are more likely to consider alternatives if they are encouraged by their employer. Research shows that employers can reduce vehicle trips to their worksites by promoting alternative commute modes, such as transit, ridesharing, bicycling, walking, and telecommuting, according to the MTC.