March 19, 2020
DC Commuter Benefits Law: Comply or Be Fined
by Samantha Huff
Are you a DC organization with 20 or more employees? The DC Commuter Benefits Law requires businesses (including non-profits) with 20 or more employees (full-time or part-time) in DC to offer commuter benefits. Starting on November 14, 2019, businesses operating in Washington, DC that are not in compliance with the DC Commuter Benefits Law, will be subject to fines.
What are the fines for non-compliance?
For the first offense, each month that a business is not in compliance could result in a fine of $100 per covered employee. Repeat offenders would see fines of $200 per employee for the second offense, $400 per employee for the third offense, and $800 per employee for subsequent offenses. To review the regulation in the Notice of Final Rulemaking, click here.
|Violation||Penalties (per covered employees, per month)|
What is the DC Commuter Benefits Law?
As of January 1, 2016, DC employers with 20 or more employees (including non-profits) are required to provide at least one of the following commuter benefit options:
- Employee-Paid, Pre-Tax Benefits: Allows employees to set aside income on a pre-tax basis to cover the cost of commuting by mass transit or vanpools, up to $265 per month.1
- Employer-Paid, Direct Benefit: Employers offer their staff a tax-free subsidy for transit or vanpools up to $265 per month.2
- Employer-Provided Transportation: Employers provide a shuttle or vanpool service at no cost to their employees.
This requirement was passed by the Council of the District of Columbia as part of the Sustainable DC Omnibus Amendment Act of 2014.
Who is required to comply?
Businesses (including non-profits) with 20 or more employees based in the District of Columbia are required to provide at least one of the three benefits listed above to their DC employees within 90 days of hire.
Covered employees include full-time and part-time employees
- who perform 50% of their work in the District of Columbia; or
- whose employment is based in the District of Columbia, and a substantial amount of their work is performed in the District of Columbia with less than 50% of their work performed in any other state.
For smaller employers with fluctuating numbers of staff, the following guidance can help determine if they are required to comply. To determine its number of employees, the employer should use the greater of
- the number of full-time and part-time employees as of December 31st of the previous year; or
- the average number of employees during the previous calendar year.
How can I become compliant?
goDCgo is an initiative of the District Department of Transportation that provides employers with complimentary assistance, including guidance on implementing commuter benefits. The goDCgo Employer Commuter Benefits Toolkit provides more details on how employers can become compliant. Employers can receive a complimentary consultation with goDCgo by contacting our employer services team at: info@goDCgo.com and 202-299-2186.
The Department of Employment Services (DOES) is enforcing the DC Commuter Benefits Law and can answer questions regarding compliance and enforcement. Please contact DOES, Office of Wage-Hour at 202-671-1880 or OWH.firstname.lastname@example.org.
 This monthly maximum is regulated under Section 132(f) of the IRS Tax Code. As of January 1, 2019, federal law allows employers to offer employees up to $265 per month as a pre-tax deduction or tax-free subsidy for use on mass transit or vanpools. This monthly amount is subject to change on an annual basis and is expected to increase to $270 per month starting January 1, 2020.