Soon, many District of Columbia employers will be subject to a new “parking cash-out” law designed to promote environmentally friendly commuting options, i.e., other than individual commutes by automobile. At a high-level, parking cash-out laws generally require employers that provide free or subsidized parking to offer to pay employees cash in lieu of the subsidized parking if the employee uses another commuting method. Failure to satisfy the act’s requirements may result in the imposition of civil fines and penalties.
The Transportation Benefits Equity Amendment Act of 2020 (the “Act”) became effective June 24, 2020, but originally contained a funding provision that delayed its operational effect. Similar legislation has been in place in some areas for over 20 years. The D.C. Council has since repealed the funding provision, and we expect the Act’s requirements to take effect in mid-November 2020. The timing of the Act’s adoption has raised some eyebrows, as many employers and employees are seeking ways for employees to commute that avoids crowded public transportation in light of the ongoing COVID-19 pandemic.
As this post discusses, the Act’s requirements pose difficult compliance questions for employers. Guidance would be welcome in helping employers implement the Act, and will hopefully be forthcoming soon. Employers are encouraged to consult with tax and benefits counsel as they evaluate their fringe benefit programs for compliance with the Act.
Continue Reading New D.C. Transportation Benefits Law Creates Potentially Bumpy Road for Employer Compliance