Bay Area Companies Now Required to Cover Employees’ Public Transit Expenses

A Transportation Account is one of the many employee benefits offered by businesses and is fairly similar to a Flexible Spending Account (FSA). According to, a new piece of legislation in California called the Bay Area Commuter Benefits Program will now require companies with 50 or more employees to offer commuter benefits to cover daily transportation.

“It’s very similar to a flexible spending account where instead of giving money to health costs, they give money to flexible spending or vanpool costs,” Jackie Winkel, an environmental planner with the Bay Area Air Quality Management District, told the news source. “We anticipate it to reduce traffic congestion, reduce emissions of greenhouse gases and air pollutants, while providing savings to the Bay Area region as a whole.”

How does it work?

The new legislation is aimed at reducing the carbon footprint of each commuter, while also reducing the amount that they spend each month traveling to and from work. Each employer that hires more than 50 employees must offer the following four options to its employees, as reported by the Bay Area Air Quality Management District website:

1. Pre-tax option: Employees will have the option of removing their transit or vanpool costs from their taxable income, to the maximum allowed by federal law.

2. Employer-Provided Subsidy: Each month, employees will receive a subsidy that can cover their daily transit or vanpool expenses.

3. Employer-Provided Transit: Companies can provide a shuttle, bus or vanpool service at their own expense to their employees for free or at a fraction of normal commuting expenses.

4. Alternative Commuter Benefit: If a worker decides to utilize a bike, carpool or other transportation option that reduces single-occupant vehicle trips, he or she would be reimbursed by the employer.

The new legislation could have a remarkable impact on the Bay Area’s air quality and traffic congestion, which could have lasting effects on future generation’s quality of life.

The Bay Area Commuter Benefits program is one example of how local governments are putting more power into the hands of employees, but many companies around the country already offer some form of assistance for their workers’ transportation needs.

To learn more about these benefits, check out’s Learning Center to understand the ins and outs of transportation reimbursement accounts, FSAs and check out our huge selection of FSA eligible products.

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