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The New Bay AreaTransit Benefits Regulation
Contra Costa County Climate Leaders
Average Commute in US: 15 miles.*
*Bureau of Transportation Statistics
The car that gets you to work emits 22 pounds of CO2 per gallon.*
*Average, US EPA
This equates to roughly 20 pounds of CO2 each way
or 40 pounds round trip.
…40 pounds adds up over time…
One day: 40 lbs. of CO2 not emitted
One month: 920 lbs.
One year: 11,040 lbs.
Taking transit instead:
One employee/year: 11,040 lbs. of CO2 not emitted
Five employees/year: 55,200 lbs.
Fifty employees/year: 552,000 lbs.
…Hence, SB 1339
Signed into law by Governor Brown on September 30th, 2012
Requires Bay Area Employers to offer transit benefits to their employees.
-- Company size: 50 or more employees (including part-timers
and temps).
-- Takes effect in 2013
-- BAAAQMD regulation
-- Based on Successful SF Ordinance in place for 5 years.
Transit Benefits…
Valuable Benefit
– 50% employees say impacted job decision 1
– 80% employers say it has a positive impact on recruiting and retaining employees 1
Contribute to Green Company Initiatives
– 81% surveyed employers report a positive impact on carbon footprint 1
– Employers claim they increase mass transit ridership by 10-40% 2
Good for Business
– Relatively easy to implement and offer employees
– Administration and/or fees can be offset by tax savings
– Corporate Responsibility and Sustainability are at all time highs
1. TCRP Report 87, 2003 2. The 2009 Commuter Impact Survey, TransitCenter
Benefits to Employees
Tax savings
– Federal, State, FICA
– Average savings between 30-40%
Potential additional savings
– Automotive costs, gasoline, wear and tear, total replacement
Personal benefits
– Reduced commute stress
– Additional productivity
– Reduced carbon footprint
Benefits to Employers
Payroll tax savings
– FICA, WC, State & Local Taxes
Supporting business initiatives
– Parking issues
– Help as recruiting and retention tool
Green Employer Initiatives
– Encourage use of mass transit; reducing carbon footprint
– Goodwill and public recognition; traffic congestion
Sample Tax Savings
Assumptions: Participation Rate 20.00%Percentage participating earning below FICA wage base: 100.00%
COMMUTE COSTS
Eligible Employees Participants Monthly Deduction Annual Average5,000 1,000 $100 $1,200
PARTICIPANT SAVINGS
Federal Tax State FICA + Medicare Average Savings25.00% 7.00% 7.65% $476
EMPLOYER SAVINGS
Pre-Tax Dollars FICA Medicare Annual Savings$1,200,000 6.20% 1.45% $91,800
Using average fees as an example, the tax savings created is better than a 183% ROI on the amount it would cost to offer the benefit!
STEP 1
STEP 2
STEP 3
Program Goals & Objectives
Help Employees with Commute Costs
If every employer offers…everyone benefits! (even those not taking transit)
Green Employer / Corporate Citizen Initiatives
Align to Business Initiatives
For both Transit and Vanpools
Commuter Program Options: Two ways to set up transit/vanpool benefit:
1. Do it yourself
Less than 100 employees
You have one work site
2. Have someone else do it for you—Outsourcing to a third party administrator (TPA)
Larger companies
Multiple work sites
Implementation ease
Online programs for smaller employers
Convenience
Options
Restrictions
Card can contain pre-tax and post-tax purses
Transit smartcards: Clipper in the Bay Area
Cost
Check on vanpool option
Commuter Card
Online Fulfillment Programs
Convenience
Options
Ordering/ fulfillment/ distribution outsourced
Communication/ enrollment via internet
Customer Service
Centralized delivery
Cost
www.commuterbenefits.org
Challenges
Cash Reimbursement
•IRC Code Section 132 (f) Requirements
•“Qualified Cash Reimbursement”
•“Readily available” voucher/pass options
•Double cash outlay for employee
•Cumbersome = deterrent to participation
Pre-tax and Payroll Issues
Inclusion of Shuttle Option
Concerns about Participation
Questions?
Why Your Company Should Offer Commuter Benefits
“The mode of transportation that you choose has a greater effect on the environment
than any other decision you make as a consumer.”
Union of Concerned Scientists
Cost neutral
Easy to Implement
Good for employer, employees
Environmental benefits
Questions?
Thank you!