This spring the D.C. Council passed the Transportation Benefits Equity Amendment Act of 2020 in an effort to encourage employees driving in to D.C. for work to consider more environmentally friendly alternatives. “Parking cash-out” laws such as this typically target employers who give employees free or subsidized parking benefits and require that they offer cash to employees who do not utilize these benefits.
The Act covers employers with 20 or more employees who offer parking benefits in D.C. A “parking benefit” is parking offered to an employee at or within ½ mile of the business for free or at less than market value either directly or through an employer subsidy. The Act does not apply if the employer owned the parking spaces at issue prior to the effective date of the Act.
The Act requires covered employers to adopt one of three initiatives-
Offer a Clean-Air Transportation Fringe Benefit: Employers may provide one of the following fringe benefits (as defined by Federal law) to employees in addition to their compensation—1) transportation on a commuter highway vehicle between the employee’s home and the place of employment; 2) a transit pass; or 3) a qualified bicycle commuting reimbursement. Employees may only accept this benefit if they have declined the parking benefit.
Pay a Clear Air Compliance Fee: Employers may pay the District Department of Transportation (DDT) a fee of $100 per month for each employee to whom a parking benefit is offered.
Develop a Transportation Demand Management Plan: Employers may submit a plan to DDT for approval that reduces the number of car commutes by 10% each year until 25% or fewer of all commutes are made by car.The Act also imposes the following additional requirements of covered employers—
Additional Payments to Employees: In the event an employee who accepts a clean-air transportation fringe benefit does not use the entirety of the amount offered, the employer must compensate the employee for the difference, either through additional compensation, an increased contribution to the employee’s health coverage or a combination of the two.
Reporting: Every two years following the effective date of the Act, covered employers must report to the mayor: 1) the total number of employees; and 2) the number of employees (a) offered a parking benefit, (b) using a parking benefit, (c) offered a clean-air transportation fringe benefit, and (d) using a clean-air transportation fringe benefit.
One caveat— this Act will go into effect once it is included in a budget approved by the City. Presently, this does not appear to have happened, and budgets can be especially difficult to forecast in the midst of a pandemic.
D.C. employers with questions about the Act or this Alert should contact Shulman Rogers Employment Law attorneys to discuss this topic further.
