Hunton Employment & Labor Perspectives

Starting January 1, 2016, many employers in the District of Columbia will be required to provide commuter benefits to their employees. The Program applies to any District of Columbia employer with 20 or more employees. The term “employees” is defined broadly to include “any individual employed by an employer.” Covered employers must offer the commuter benefits to any employee regardless of the number of hours worked.

Employers may choose from among three options to comply with the new commuter benefit requirements:

• Employee-Paid Pre-Tax Benefit: Offer employees the option to set aside $130 of their compensation each month on a pre-tax basis to be used to pay for their transit or vanpool expenses, or $250 per month pre-tax for parking expenses, in accordance with the transportation fringe benefit rules of Internal Revenue Code § 132(f).

• Employer Paid Direct Benefits: Offer employees the choice between a transit pass (paid for by the employer), or reimbursement by the employer of vanpool or bicycling costs in an amount at least equal to the purchase price of a transit pass for an equivalent trip.

• Employer-Provided Transportation Service: Offer employer-provided transportation at no cost to the covered employee in a vanpool or bus operated by or for the employer.

The penalty for failing to offer at least one of the above three benefit options is a civil fine, which depending on the class of infraction, ranges from $50 to $2,000 for the first offense.

The District of Columbia’s Department of Transportation (DDOT) has provided an employer guide which summarizes the new transportation requirements and includes an “Employer Transit Benefits Toolkit” with specific guidance on implementing the three benefit options.