Public Transit Benefits Mandate Proposed For San Francisco Employers

San Francisco's latest attempt to mandate employers to provide benefits to their workers is to provide economic incentives to use public transit or vanpools. However, unlike prior mandates, e.g. health care, the business sector appears OK with it.

"The proposed law would require businesses with 20 or more employees to establish a program to promote the use of transit by its workforce. Participation by employees would be voluntary.

Businesses would have to select one of three options. Two of them would place a financial burden on the employer, and one is considered cost-neutral...

The two choices that come with an added cost:

# Offering workers free transit passes or vanpool reimbursement;

# Providing door-to-door shuttle service on vans or buses.

A third option would allow businesses to tap into an established federal program in which employees can set up pretax commuter accounts to pay for travel on train, bus or ferries or by vanpool. The accounts could not pay for parking under the San Francisco proposal.

The benefit of the pretax program is that employees would save what amounts to 40 percent on their commute costs."

"The plan is the latest attempt by San Francisco officials to impose a mandate on businesses. The city has required paid sick leave, health care benefits and a minimum wage that is one of the nation's highest.

But unlike the past mandates on the private sector, this one has not run into major opposition from business leaders because of the potential economic benefit to them."

Full Story: PLAN AFOOT TO GET S.F. WORKERS OUT OF CARS; BUSINESS' OBLIGATION: Firms would have to provide transit passes or shuttle service

Comments

Comments

Irvin Dawid's picture
Correspondent

Correction in article

The article reads,
"The benefit of the pretax program is that employees would save what amounts to 40 percent on their commute costs. A San Francisco Municipal Railway FastPass, for example, would cost a participant $27 instead of $45. Employers, meanwhile, would save 9 percent on the participating employees' payroll taxes."

The actual cost the employee pays for the $45 transit pass depends on which of 3 commute check programs the employer subscribes to:

"Commuter Checks can be distributed by employers in any one or a combination of three ways:
1) provided as a pre-tax payroll deduction;
2) provided as a cost-effective means to offer a bonus or a supplemental employee benefit; or
3) by "share the fare," where a portion is paid by the employer and a portion is paid by the employee."
http://www.commutercheck.com/News/increasedCap.aspx

In most cases, it's #1 - the employee pays the entire $45 with 'pre-tax dollars in the form of the commute checks', which translates into an average of a 40% savings.

The Chronicle did print a scanty 'correction' on 8/1 but never explained the 3 options, so workers will find out during the 'outreach period', though the article doesn't indicate when it would go into effect other than stating that it is expected that the full Board of Supervisors is expected to approve the mandate.
________________________

CORRECTIONS:
"A story Thursday about a proposed San Francisco law to get more people out of their cars should have stated that, as outlined in federal tax code, employers may provide workers with up to $115 per month in tax-free transit and vanpool benefits this year. Employees participating in the program can save up to 40 percent on their commute costs."

Irvin Dawid, Palo Alto, CA

Irvin Dawid's picture
Correspondent

And it's a GO! Yet another 'first' for The City By The Bay!

S.F.Examiner,8/6: "Transit law gets green light"
http://www.examiner.com/a-1523445~Transit_law_gets_green_light.html

The law takes effect Dec. 22.
I suspect that most employers (of 20 or more workers) who do not already subscribe to "commute check program" will choose that option.

Irvin Dawid, Palo Alto, CA

Irvin Dawid's picture
Correspondent

SF Examiner editorializes on the new mandate

Normally to the right of center, the paper praised this new employer requirement:

Editorial: Public-transit plan is a winner

Best lines:
"It is a pleasant change to see The City do something to advance its transit-first policy by making buses or trains a better commute alternative...

And do we even need to mention the unsurprising news that San Francisco is, of course, America’s first city to make employee public-transit incentives a civic mandate?"

Irvin Dawid, Palo Alto, CA

Michael Lewyn's picture
Blogger

What I don't understand

If Commuter Check is cost neutral, why would any business not do it (except due to lack of information?)

Irvin Dawid's picture
Correspondent

Have you ever worked with your accounting dept?

Michael,
As a naive commute coordinator, I asked that very question. However, working with the payroll dept. of the employer for the workers I was assisting enabled me to see the light, or perhaps the darkness?

Change doesn't come easy to these folks, and they often will do it only if they are forced, EVEN THOUGH THEY WILL SAVE MONEY BY DOING SO! Go figure!

Irvin Dawid, Palo Alto, CA

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