Time & Attendance
By Jerry Geisel
Oct. 9, 2012
Legislation signed into law last week by California Gov. Edmund G. Brown Jr. gives authority to two Bay Area transportation agencies to adopt ordinances requiring employers with at least 50 employees to offer commuter benefit programs.
Under the measure, S.B. 1339, employers in nine Bay Area counties would have six months after the two agencies — the Metropolitan Transit Commission and the Bay Area Air Quality Management District — adopt such a mandate to offer the programs.
Like a measure that San Francisco lawmakers approved in 2008, the bill signed by Gov. Brown says employers would have a choice of commuter benefit programs, any one of which they could offer their employees.
Those choices include:
• A program under Section 132(f) of the Internal Revenue Code in which employees can make pretax contributions to cover commuting expenses, such as bus and rail passes. The current monthly maximum pretax contribution is $125. A Senate panel this year approved raising that maximum monthly contribution limit to $240 through the end of 2013, but no action has since been taken on that measure.
• Paying for employees’ commuting expenses — up to $75 a month — such as by buying transit passes for employees.
• Providing transportation to employees, such as through vanpools or buses operated by or for the employer.
Many employers will not be affected by this new mandate as they already offer to employees one of the commuter benefit options, said Dan Neuburger, president of WageWorks Commuter Services in New York, a unit of WageWorks Inc., a San Mateo, California-based administrator of tax-favored employee benefit programs.
Nationwide, tens of thousands of companies offer mass transit programs, Neuberger added.
Such programs are “good for the environment” while providing tax savings for both employers and employees, he said.
For example, under Section 132(f) programs, employees, through the contribution of pretax dollars, reduce their taxable incomes. That reduction in taxable income also reduces the amount of FICA taxes, which they and their employers are assessed.
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