How to comply with the SF Transit Benefit

Ordinance

Goal of workshop

Attendees will leave the workshop with a clear understanding of how IRS Section 132(f) works, how to comply with the transit benefit ordinance; and have an understanding of the options available to administer their program.

OverviewOverview of the OrdinanceUnderstanding the IRS Section 132(f) CodeOverview of the options availableNew bicycle benefit TransLink/EZRider

“Only in San Francisco”

• SF Leads the Way

• Paid Sick Leave (All employers)

• Health Care Security Ordinance (20+ employees)

• Trend: From SF to State

SF Transit Benefits Ordinance

• August 8, 2008: SF Board of Supervisors passed Ordinance No. 199-08

• Mandate has strong support in SF business community: SF Chamber; BOMA SF, etc.

• Designed to help SF achieve its goal to reduce CO2 emissions within the City and County to 20% below 1990 levels by the year 2012

• Ordinance requires employers with at least 20 employees to offer at least one of three benefit options.

• All employees counted (full-time, part-time, temporary)

• Include employees who work outside County• Governmental entities not included

SF Transit Benefits Ordinance

SF Transit Benefits Ordinance

• Six month till compliance (January 19, 2009)

• Non-compliance– $100 for first violation– $200 for second violation (in same year)– $500 for each additional (in same year)

Transit has come a long way in San Francisco…

• 1991 – Transit benefit begins in the Bay Area ($21 Maximum allowed only as a subsidy)

• 1998 – Commuter Choice Legislation Passes allows pre-tax deduction

• 2007 – Benefit increased to $115

• 2008 – SF Board of Supervisors passes legislation

• 2009 – Additional increase in cap to $230; $20 bicycle amendment

…and so has the transit benefit.

Saves up to $190 per employee per year in payroll taxes

Creates an excellent employee recruitment and retention tool

Improves employee morale and productivity

Reduces parking lot congestion with more transit/vanpool usage

Helps reduce local traffic congestion and improves air quality

Benefits to EmployersBenefits to Employers

Saves up to $1000 a year in personal income taxes

Creates an incentive to try a more relaxing and economical commute

Using transit or vanpools helps to improve air quality and the general quality of life in the Bay Area

Benefits to Employees

Thousands of employers already participate in the Bay Area…

IRS and 132 (f)

-- Very Flexible --

2 Key Points:

-Cannot exceed maximum per month of $230

-No cash reimbursement

Three ways to offer the transit benefit:

A. pre-tax payroll deduction

B. subsidy, in addition to salary

C. a combination of the two

Two ways to set up your transit benefit:

A. Do it yourself

Less than 100 employees

You have one work site

B. Have someone else do it for you--using a third party administrator (TPA)

Larger companies

Multiple work sites

Option #1: Do it Yourself…

9 steps to setting up your program

#1 Choose the type of program #1 Choose the type of program

Debit Cards

- IRS compliance

Transit Passes

- Available from all transit agencies

Vouchers

- Universal acceptance

#2 Get management approval #2 Get management approval

#3 Identify key personnel #3 Identify key personnel

#4 Create and distribute survey/enrollment form#4 Create and distribute survey/enrollment form

#5 Tabulate surveys#5 Tabulate surveys

#6 Arrange for payroll to establish a deduction code#6 Arrange for payroll to establish a deduction code

#7 Order passes/vouchers/debit cards#7 Order passes/vouchers/debit cards

#8 Distribute benefit

to employees

#8 Distribute benefit

to employees

#9 Update your personnel policy handbook#9 Update your personnel policy handbook

Option #2: Have someone else do it for

you

Selecting a Third Party Administrator

#1 Research options #1 Research options

The Department of the Environment has a list of vendors

#2 Meet with a representative #2 Meet with a representative

Make sure to understand costs, timeframes, and your responsibilities

#3 Sign agreement#3 Sign agreement

The benefit can be used for all transit and vanpools in the greater Bay Area

including….

Also consider including bicycling—it is now covered

up to $20 a month!

Also works with

Translink!

“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