DC Transportation Benefit Law Takes Effect

It is a new year and with that brings new legal obligations for employers in DC.  One significant new law for DC employers is the requirement for employers with 20 or more employees with addresses in DC to offer certain types of transit benefits.  The law establishing this new obligation, the Reducing Single Occupancy Vehicle Use by Encouraging Transit Benefits law, mandates that an employer provide one of three possible transportation benefits programs to its employees:

  • A benefit program through which employees can elect to set aside a certain amount of pre-tax funds each month to pay their commuting costs for use of “[a] commuter highway vehicle [vanpool], transit or bicycling” consistent with Section 132(f)(A), (B), and (D) of the Internal Revenue Code;
  • An employer-funded program requiring the employer to provide a transit pass or reimbursement of vanpool or bicycling costs, based on the employee’s election, that is at least the equivalent of the purchase price of a transit pass or a comparable trip; or
  • Transportation provided by the employer, at no cost to the covered employee, in a vanpool or bus operated on behalf of the employer.

Employers are permitted to incorporate one or more there options as they see fit.  For example, an employer could provide transportation from the local metro station, combining Option 1 or 2 with Option 3.  Employers must also determine how to implement this new benefit program, including deciding whether to administer the program in-house or use an outside vendor for assistance.  Once an employer decides what it will offer and how it intends to implement the program, it will then have to memorialize its program in a written policy provided to employees through employee handbooks or as a separate, stand-alone document.  The written policy raises employee awareness and demonstrates compliance on the part of the employer.

Because January 1, 2016 has already come and passed, applicable DC employers must ensure they have implemented at least one of the permissible transportation benefit programs.  The type of benefit offered by employers will depend on the size of the employer, its available resources, and the portion of the workforce to which this benefit would be provided (i.e., those employees willing to use a vanpool or public/employer-sponsored transportation to get to work).  Failure to offer such a program could lead to a civil fine of between $50.00 and $2,000.00 depending on the classification of the violation.

DC has several resources to assist employers in this transition, including guidance and support services through http://godcgo.com.

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