Seattle's Commuter Ordinance
Posted Friday, November 1, 2019 by Kim Sandher
January 1, 2020 but the Seattle Office of Labor Standards will not take enforcement action until January 1, 2021.
Who It Applies To
Businesses who employ at least 20 employees worldwide and employees who worked an average of ten hours or more per week in the previous calendar month. The number of employees is counted by the average number of paid employees who worked each week during the prior calendar year. It includes employees of all statuses including full-time, part-time, seasonal, temporary, etc. It does not apply to government entities and tax-exempt organizations.
What Do You Need To Do?
Chapter 14.30 of the Seattle Municipal Code (“Commuter Benefit Ordinance”) requires that starting January 1, 2020, an employer, with at least 20 employees worldwide, must allow an employee to make a pre-tax deduction to cover transit and vanpool expenses from their paycheck. This obligation can be met by:
- Allowing employees to make a pre-tax deduction up to the full amount allowed by the Internal Revenue Service; or
- Subsidizing all or part of the purchase price of a transit pass
The ordinance does not require the employee to make the deduction, only for the employer to offer it. The employee is free to choose not to take it. You must display the Office of Labor Standards poster giving notice of this. You should keep good records of having offered this deduction in writing and written documentation of the employee accepting or declining it.
How Much Is It?
The amount is set by the Internal Revenue Service. The 2019 limit is $265 per employee per month. The 2020 limit has not yet been released.
What About New Hires?
Employers must offer the pre-tax deduction with 60 days of the employee starting. Once the employee selects the pre-tax deduction, the business must provide the deduction within 30 calendar days.
What Is the Purpose Of This New Ordinance?
The Office of Labor Standards provides that the ordinance sets to encourage commuters to use transit options instead of their single occupancy vehicle. It hopes to reduce traffic congestion and carbon emissions. As a pre-tax deduction, the law’s goal is to lower the cost for both workers and businesses Please be advised, this information may change as future rulemaking occurs.