Bay Area Commuter Benefits Program Adds New Telework Option
By Brian Gilmore | Published June 3, 2021
Question: How can employers comply with the Bay Area Commuter Benefits Ordinance for employees who work remotely?
Short Answer:The Bay Area Commuter Benefits Program recently added a new fifth option for employers to comply by having a policy to allow employees to telework at least one day per week.
General Rule: The Bay Area Commuter Benefits Ordinance
The Bay Area Commuter Benefits Program (Program) applies to employers with 50 or more full-time employees working in the Bay Area, which is a defined set of counties under the jurisdiction of the Bay Area Air Quality Management District (Air District). “Full-time” is defined as averaging 30 hours per week for these covered employer purposes.
Employers must offer the commuter benefit plan to all Bay Area employees who work at least 20 hours per week. The Program applies to all 20 hour/week common law employees other than those meeting the Program’s temporary, seasonal, and field employee exceptions. The employer must register at 511.org and annually re-certify compliance with the Program.
Note: The 30 hours per week standard used to determine whether the employer is subject to this law does not apply in determining which employees must be offered the commuter benefit. Once the employer determines it is subject to the Program, only the 20 hours per week covered employee threshold is relevant.
For more details, see our prior post: The Bay Area Commuter Benefits Program.
Program Options: Five Options to Comply
Employers subject to the Program will comply by offering one or more of the following commuter benefits to covered employees:
Option 1: Pre-Tax Benefit
Under this most common approach, the employer allows employees to contribute to a commuter benefit account on a pre-tax basis up the monthly limit for mass transit and/or vanpooling. In 2021, the maximum contribution is $270/month.
Option 2: Employer-Provided Subsidy
Employers can provide a tax-free subsidy of at least $75/month toward employees’ mass transit and/or vanpooling expenses through a commuter benefit account. For more details on this approach, see our prior post: Employer Commuter Benefit Subsidies.
Option 3: Employer-Provided Transit
Employers can provide a free or low-cost form of transportation from the employee’s home community to the worksite by bus, shuttle, or vanpool. For short-distance transportation, employers may charge up to $2.00 for a one-way trip. For long-distance transportation, employers may charge no more than $0.20 per mile for the one-way trip distance.
Option 4: Alternative Commuter Benefit
Employers can submit for approval an alternative approach that is as effective at reducing single occupant vehicles as the three options above. There are categories of pre-approved alternatives, and the employer can also propose its own alterative commuter benefit.
Option 5: Telework (New May 2021)
Under this new option, employers can establish a company-wide telework policy allowing employees whose assignments can be performed remotely to telework for at least one day per week. Program materials now include an Option 5 Guide to walk employers through this new option.
The Option 5 Telework Approach: The New Alternative to Comply
The Program now includes a provision for employers to comply through offering a company-wide telework program. The Air District announced the new option in Compliance Advisory release dated May 17, 2021.
Program materials state that single occupant vehicles are the largest source of air pollution and greenhouse gas emissions in the Bay Area, and employees commuting alone to work significantly contributes to this problem. As an alternative (and in addition to) mass transit, bicycle, and pedestrian options, offering telework flexibility is a way that employers can help reduce emissions.
The Program materials provide that “teleworking,” “telecommuting,” and “remote working” are used interchangeably for this purpose. The concept is defined as “a work flexibility arrangement under which an employee performs the duties and responsibilities of such employee’s position, and other authorized activities, from an approved worksite other than the location from which the employee would otherwise work.” To put it more simply: employees work from home.
Finally, the new Program materials emphasize the intuitive points that telework can save time and money for employees, and it can be a measure that assists employers to attract and retain best talent and improve productivity.
Option 5 Telework Compliance Requirements:
Employees whose assignment can be performed remotely must be permitted to telework at least once per week.
There must be written policy detailing the accessibility and frequency of the teleworking benefit.
The employer must retain records for three years documenting that the telework program complies with the Program requirements.
Employers must notify employees at the time the telework benefit is initially made available and as part of the new hire orientation process for new employees.
Employers implementing a telework benefit to comply with the Program cannot remove existing benefits offered to employees whose duties cannot be done outside the worksite (because they cannot take advantage of the benefits of teleworking).
If an employer removes existing commuter benefits already being offered to employees, the telework Option 5 benefit needs to be approved by the Air District on a case-by-case-basis.
The Program materials now offer a new Option 5 Guide that includes an Example Model Telework Policy that employers can use as a guideline and framework if choosing to adopt a telework program to comply.
FAQ Materials: New Program Interpretation of Remote Workers
The Program materials made available by the Air District include an extensive FAQ document addressing a wide range of common issues. The Air District updates these FAQs regularly.
Prior FAQ materials addressed the question of whether employers were required to offer commuter benefits to remote workers. Before to the addition of the Option 5 telework alternative to comply, the response stated that employers were not required to offer commuter benefits to employees who always work remotely:
Prior Program FAQ Materials (Updated December 31, 2019)
https://511.org/sites/default/files/pdfs/CBP%20FAQ%2031Dec19.pdf
Q: Are employees who work remotely, and do not report to a physical office or work site in the San Francisco Bay Area, covered by the Program?
A: Employees who always work remotely, and do not commute to a physical office or work site in the San Francisco Bay Area, are not counted as “covered employees” or “fulltime employees” for purposes of the Program. Employers are not required to include remote employees in their count of employees for the purpose of determining whether they are subject to the Program, nor are employers required to offer commuter benefits to employees who always work remotely. (emphasis added)
However, the new Program FAQ materials appear to reverse that stance. In light of the new Option 5 telework option to comply, it appears the Air District now takes the position that employees working remotely are covered by the Program:
New Program FAQ Materials (Updated May 14, 2021)
https://511.org/sites/default/files/pdfs/FAQs%20-%205.14.21.pdf
Q: Are employees who work remotely, and do not report to a physical office or work site in the San Francisco Bay Area, covered by the Program?
A: Bay Area employers subject to the Program requirements and have employees working remotely **can comply with the Program through Option 5. **(emphasis added)
Accordingly, employers that removed their commuter benefit account offerings (Option 1) during the work-from-home era caused by Covid-19 will want to ensure that they comply with the Program’s new Option 5 telework alternative for San Francisco Bay Area employees working remotely.
Additional Resources
Bay Area Commuter Benefits Program Homepage: https://511.org/employers/commuter-benefits-program
Program Options Overview (Short Summary of Five Options): https://511.org/employers/commuter-benefits-program/options
Program Employer Guide: https://511.org/sites/default/files/pdfs/Employer%20Guide%20-%205.14.21.pdf
Program Frequently Asked Questions: https://511.org/sites/default/files/pdfs/FAQs%20-%205.14.21.pdf
Program Option 5 Telework Guide (Includes Model Telework Policy): https://511.org/sites/default/files/pdfs/Option%205%20Guide%20-%205.4.21.pdf
List of Employers Registered with the Program: https://511.org/sites/default/files/pdfs/Registered%20Employers%20Jan.25.2021.pdf
Brian Gilmore
Lead Benefits Counsel, VP, Newfront
Brian Gilmore is the Lead Benefits Counsel at Newfront. He assists clients on a wide variety of employee benefits compliance issues. The primary areas of his practice include ERISA, ACA, COBRA, HIPAA, Section 125 Cafeteria Plans, and 401(k) plans. Brian also presents regularly at trade events and in webinars on current hot topics in employee benefits law.
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