After fighting to stave off reductions to federal tax breaks for public transit commuters, San Francisco is on the verge of strengthening enforcement of a 4-year-old law that requires larger businesses to offer employees commuter benefits.
The Environment Commission will vote Tuesday on new enforcement regulations, which would create a process for how complaints and investigations would be handled to ensure compliance with the 2009 law.
Last year, Mayor Ed Lee and other city officials lobbied Congress to restore funding for the pretax commuter benefit. The program allows commuters to use pretax dollars to pay for riding public transit. Last year, Congress failed to extend a parity provision in the program and the benefit decreased from an allowable deduction of $230 per month to $125. At the same time, the benefit for parking increased to $240, adjusted for inflation.
But on Jan. 1, the pretax commuter benefit increased to $245 as part of the American Taxpayer Relief Act of 2012.
With the parity of the benefit restored, “the department wants to ensure that all eligible San Francisco employees are aware of and take advantage of the benefit,” said Guillermo Rodriguez, spokesman for the Department of the Environment.
Under the proposed regulations, a complaint filed with the department would trigger an investigation, and if the grievance had merit the business would receive a warning notice. The business would also face penalties of up to $500 if it did not come into compliance within 90 days.
Under San Francisco’s Commuter Benefits Ordinance, all businesses with 20 or more workers nationwide must offer one of three transit benefits: The pretax deduction, up to $245 per month, for transit or van pool expenses; transit subsidies valued at $74, the cost of a monthly Muni pass; or a van pool from a worker’s home to place of business. Businesses with fewer than 20 employees are exempt.
“Thousands of San Francisco workers have taken advantage of the commuter benefit, saving hundreds of dollars annually,” Rodriguez said. “The proposed regulations simply make the process of enforcement clear, easy to understand and aligned with how The City manages other required employee benefits” such as minimum wage, per-employee spending on health care and paid sick leave.
Employees using the benefit save between 25 percent to 40 percent on their transit expenses, or between $200 and $1,000 annually, according to information provided by the department.