Frequently Asked Questions - Commuter Benefits Program

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I. San Francisco Commuter Benefits Ordinance

1. What is the San Francisco Commuter Benefits Ordinance?
2. Which businesses are required to comply with the Ordinance?
3. Which employees are eligible?
4. I’m covered by a collective bargaining agreement.
5. Can there be a waiting period before enrolling?
6. No one at my company wants commuter benefits.
7. Our business just moved to San Francisco.
8. Our business just hired our 20^th employee.
9. All of my employees telecommute.
10. My business is not located near transit (bus, light rail or train).

1. What is the San Francisco Commuter Benefits Ordinance?

Adopted in 2009, the Ordinance requires businesses with 20 or more employees nationwide to offer commuter benefits to their San Francisco-based employees.

2. Which businesses are required to comply with the Ordinance?

A commuter benefit program is required if the business has 20 or more employees nationwide with a location in San Francisco, and has a San Francisco business registration certificate. Non-profits operating in San Francisco are also subject to the Ordinance. Please refer to the Office of the Treasurer and Tax Collector for more information on the business registration certificate. If your business has 50 or more employees at all locations across the Bay Area combined, it falls under the Bay Area Commuter Benefits Program.

3. Which employees are eligible?

Employees must be allowed to participate in a commuter benefits program once they reach an average of 10 hours per week, but employers are encouraged to allow all employees access to a commuter benefits program, regardless of hours worked.

To determine an employee’s eligibility, the employer may average the employee’s hours over the previous calendar month. For example, if an employee worked a total of 40 hours over one month, then 40 hours ÷ 4 weeks = average of 10 hours per week. This employee would be eligible to participate in their commuter benefits program the following month. For purposes of this calculation, employers may assume that each calendar month has 4 weeks.

4. I’m covered by a collective bargaining agreement.

The Ordinance applies to all persons who perform work in San Francisco, including those employees covered by a bona fide collective bargaining agreement. A bona fide collective bargaining agreement is a written contract concerning wages, hours, and working conditions that is collectively bargained by an employer and a recognized union that represents the employees.

5. Can there be a waiting period before enrolling?

Yes, an employee’s eligibility for the commuter benefits program may be subject to a waiting period. This waiting period should be consistent with the eligibility period for other company benefits, but should not exceed one month. If the company does not offer other benefits, the employee should not have to wait longer than one month to enroll in commuter benefits.

6. No one at my company wants commuter benefits.

The Ordinance requires you to offer a program to all eligible employees. It is up to the employee to participate in the program. If you have offered the program and no employees express interest in participating, you still need to have a program ready to go in case an employee opts into the program later or if you have a new hire who wishes to take part. In this situation, work with your payroll staff to set up the program as necessary (e.g. set up a deduction code for pre-tax deductions, set up subsidy information), talk to vendors that can provide passes or programs if an employee participates, and have your official company policy available. With these measures in place, you will be in compliance and ready to offer a program to interested employees in the future. Materials in English, Spanish and Mandarin are available for promoting the commuter benefits program to your employees

7. Our business just moved to San Francisco.

Note: If you have 50 or more employees in the Bay Area, please see the Bay Area Commuter Benefits Program.

New San Francisco employers subject to the San Francisco Commuter Benefits Ordinance have 90 days to set-up a commuter benefits program and submit an Employer Compliance Reporting Form.

8. Our business just hired our 20^th employee.

San Francisco employers have 90 days after they become subject to the Ordinance to set-up a commuter benefits program and submit an Employer Compliance Reporting Form.

9. All of my employees telecommute.

If all of your employees telecommute, you are not required to offer commuter benefits. You are still required to submit a Compliance Reporting Form. On the Compliance Reporting form, please mark “Exempt from the San Francisco Ordinance,” and select “All San Francisco employees telecommute” for the follow-up question about reason for exemption. If not all San Francisco-based employees telecommute, you are otherwise subject to the Ordinance and must implement a Commuter Benefits program.

If current employees telecommute, you may want to consider having a program ready to go in case an employee begins to commute to an office later or if you have a new hire traveling to an office daily. In this situation, work with your payroll staff to set up the program as necessary (e.g. set up a deduction code for pre-tax deductions, set up subsidy information), talk to vendors that can provide passes or programs if an employee participates, and have your official company policy available. With these measures in place, you will be in compliance and ready to offer a program to interested employees in the future.

10. My business is not located near transit (bus, light rail or train).

If your business is not located near transit, you still need to offer a commuter benefits program.  You may also consider offering incentives to encourage ridesharing. The 511 Rideshare Program is an excellent resource that helps commuters find a carpool and/or vanpool partner.  

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II. Regional Bay Area Commuter Benefits Program 

1. What is the Bay Area Commuter Benefits Program?
2. Which program do I need to report to?
3. I have 50 or more employees in the Bay Area, do I need to report twice?
4. I have 50 or more employees in the nation. Which program do I need to report to?
5. Where do I find my Employer ID number for registering?
6. Which counties does the Bay Area Commuter Benefits Program include?
7. When do I have to report by?
8. Is there an annual reporting form for the Bay Area Commuter Benefits Program?
9. My business is relocating to the Bay Area, when do I need this program in place?

1. What is the Bay Area Commuter Benefits Program?

The Program is based off of the San Francisco Commuter Benefits Ordinance and requires employers with 50 or more full-time employees in the Bay Area to provide commuter benefits for their employees.

The Program applies to all public, private and non-profit employers in the Bay Area with 50 or more full-time employees within the geographic boundaries of the Bay Area Air Quality Management District.

2. Which program do I need to report to?

If your company has 50 or more employees in the Bay Area, you are subject to the Bay Area Commuter Benefits Program and can report to 511. Note: if your company has multiple sites within the Bay Area, the program applies to the total number of employees under the parent company, not per site location.

Unlike the San Francisco Commuter Benefits Ordinance, your employees do not need to be located only in San Francisco. For the geographic boundaries of the Bay Area, please see the Bay Area Air Quality Management District.

The San Francisco Commuter Benefits Ordinance applies to companies which do not fall under the Bay Area Commuter Benefits Program, but do have more than 20 employees nationwide and a location in San Francisco. These companies can report to the San Francisco Department of the Environment.

3. I have 50 or more employees in the Bay Area, do I need to report twice?

No. If your company has 50 or more employees in the Bay Area, you are subject to the Bay Area Commuter Benefits Program and can report to https://commuterbenefits.511.org.

4. I have 50 or more employees in the nation. Which program do I need to report to?

This depends on where your employees are specifically located. For example:

1. If you have 49 employees in San Francisco and 51 in New York, you are subject to the San Francisco Commuter Benefits Ordinance.

2. If you have 19 employees in San Francisco and 31 in New York, you are subject to the San Francisco Commuter Benefits Ordinance.

3. If you have 20 employees in San Francisco and 30 employees in San Jose, you are subject to the Bay Area Commuter Benefits Program.

5. Where do I find my Employer ID number for registering?

Your company CEO should receive a letter from the Bay Area Air Quality Management District. If you do not have a Location ID number you can request one on the first page of the online registration form at https://commuterbenefits.511.org.

6. Which counties does the Bay Area Commuter Benefits Program include?

The Bay Area Commuter Benefits Program applies to employees within the geographic boundaries of the Bay Area Air Quality Management District (BAAQMD). The nine county jurisdiction of BAAQMD are: Alameda, Contra Costa, Marin, San Francisco, San Mateo, Santa Clara and Napa, and portions of Solano and southern Sonoma. For a map of the boundary, please go here.

7. When do I have to report by?

The Bay Area Program requires businesses to implement a commuter benefits program by September 30.

8. Is there an annual reporting form for the Bay Area Commuter Benefits Program?

Yes. Employers are required to complete a simple online registration process specifying which commuter benefit the employer provides. Employers are required to update their registration form on an annual basis.

9. My business is relocating to the Bay Area, when do I need this program in place?

Businesses will have 6 months to implement this program once they relocate to the Bay Area.

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III. Implementation

1. How can I comply with the San Francisco Commuter Benefits Ordinance?
2. Are there benefits for people who bike to work?
3. Which program should I offer for my employees?
4. How can I start implementing commuter benefits?
5. Do I need to partner with a vendor to distribute commuter benefits?
6. What are some examples of vendors who can help administer commuter benefits?
7. Do I need to distribute materials?
8. Are there commuter benefits for carpooling to work?
9. What is the difference between a vanpool and a carpool?
10. I have fewer than 20 employees in San Francisco, can I still implement a commuter benefits program?

1. How can I comply with the San Francisco Commuter Benefits Ordinance?

1.       Pre-Tax Transportation Benefits – A monthly pre-tax deduction to pay for transit or vanpool expenses.

2.       Employer-Paid Transportation Benefits – A monthly subsidy for transportation expenses equivalent to the price of the San Francisco Muni Fast Pass (including BART travel) (SFMTA).

3.       Employer-Provided Transportation – A company-funded bus or van service between employee homes

2. Are there benefits for people who bike to work?

Unfortunately, no. As of January 1, 2018, the IRS Code does not allow bicycle commuting costs to be excluded from taxable wages.

3. Which program should I offer for my employees?

Because employees can have diverse commute modes, commuter benefit programs vary by company. To get a better sense of which program is best for your employees, we have created a sample employee interest survey. Once you have a better understanding of your employees’ commuting behaviors, you can assess which program will benefit them the most.

4. How can I start implementing commuter benefits?

A two-page summary of how to implement a commuter benefits program can be found here.

For more detail, please consult our Employer Guide for step-by-step directions to develop a program that best fits with a company’s values, budget and employee needs.

5. Do I need to partner with a vendor to distribute commuter benefits?

You are encouraged to work with a commuter benefits vendor to ensure that the benefit is used for qualified transportation expenses to abide by IRS guidelines. Program options and responsibilities for employers will vary with each vendor.

Employer Managed. Employers who wish to take primary responsibility for most of the legwork involved in offering a commuter benefits program will need to take orders from employees, make payroll deductions and purchase bulk vouchers or debit/credit cards from a vendor.

Shared Management. This option takes some of the burden from the previous program and involves more vendor engagement. In this type of program, you will be responsible for taking orders from employees, making payroll deductions and providing those orders and funds to the vendor. The vendor will supply the benefit to your employees directly as a voucher, debit/credit card or direct-deposit to Clipper Cards.

Vendor Managed. This option entrusts the bulk of program operations to the vendor of your choice. With this option, the only responsibilities for the employer are making the payroll deductions and coordinating with the vendor. The vendor will take orders from your employees, provide and distribute the benefit and answer any employee questions about the benefit. In some cases, employees will be allowed to manage their own benefit through the vendor’s online platform.

6. What are some examples of vendors who can help administer commuter benefits?

For a sample list of vendors, please see our Vendor Directory.

7. Do I need to distribute materials?

Employers are required to make the program available to eligible employees, and that will typically involve some form of communication. In addition, employers may opt to post flyers or notifications to further advertise the program to employees. For free customizable templates available for employers to help with communicating program information, please click here.

8. Are there commuter benefits for carpooling to work?

Unfortunately, no. The IRS Code does not allow carpool commuting costs to be excluded from taxable wages.

9. What is the difference between a vanpool and a carpool?

In the IRS Code, a vanpool is defined as any highway vehicle with seating capacity for at least six adults, excluding the driver that meets two requirements for mileage use:

1. At least 80 percent of the vehicle use must be for commuter transportation, and

2. When used for commuting, at least half of the seats must be occupied, on average, excluding the driver.

10. I have fewer than 20 employees in San Francisco, can I still implement a commuter benefits program?

Yes! Please read our Employer Guide to find out which program is best for your company.