March 17, 2022
Everything You Need to Know About the DC Parking Cashout Law
by Samantha Huff
To continue to improve air quality and reduce the number of commuters driving to work in the District, an amendment to the Sustainable DC Omnibus Amendment Act of 2014 was signed into law by Mayor Bowser in April 2020. The new law titled Transportation Benefits Equity Amendment Act of 2020 requires all employers who offer free or subsidized parking benefits and have 20 or more employees to comply with the law and submit a report to DDOT. New regulations can be confusing for impacted businesses and goDCgo is here to help your organization become compliant.
Who Has to Comply?
All DC employers with 20 or more covered employees must report their compliance OR their exemption to DDOT every other year.
Employers that meet BOTH criteria below must choose one of the compliance options listed under “How to Comply”:
- Have 20 or more covered employees
- Offer free or subsidized parking to some or all their employees
If you have 20 or more covered employees but do not offer free or subsidized parking please refer to the exempt section.
Who is Exempt?
- Employers that OWN their parking and owned it before October 1, 2020
- Employers that are under a current parking lease that began before October 1, 2020 are exempt until the lease terms are up (regardless of possible extensions)
- Hospitals and universities with pre-existing Campus Plans until their Campus Plan expires or they build outside of an existing plan
- Employers who do not offer free or subsidized parking or chose to stop offering free or subsidized parking
Please note: exempt employers still must report their exemption to DDOT every year through the reporting dashboard.
How to Comply
There are 3 ways to comply with the new law:
- Offer a Clean Air Transportation Fringe Benefit in exchange for parking benefits
- Implement a transportation demand management plan
- Pay a Clean Air Compliance fee to the District Department of Transportation (DDOT)
Compliance Tip: Discontinue Offering Free or Subsidized Parking
By discontinuing free or subsidized parking, you remove the criteria that requires you to comply with the law. Out of all the options, removing parking benefits is the quickest and most cost-effective way of complying with the law. However, removing any kind of benefit from your offerings can cause transportation difficulties, impact morale, and increase turnover. If you choose this option, goDCgo recommends you replace parking benefits with one or multiple sustainable benefits like telework, Capital Bikeshare, vanpool, and/or a transit/bike subsidy. Contact info@goDCgo.com to learn more about these commuter benefits.
Compliance Option Details
Clean Air Fringe Benefit (aka Parking Cashout)
This option offers employees a benefit or compensation in return for giving up their parking benefits. goDCgo recommends this option as it can help you save money on parking costs, while incentivizing sustainable commuting and providing employees with a valuable benefit.
To fulfill this option, offer employees who currently have the option of subsidized or free parking a Clean Air Transportation Fringe Benefit, which is defined by the IRS as either a transit or vanpool subsidy. The subsidy you offer must be equal to the market rate of the parking space. Please note that employees do not have to accept the benefit for you to be compliant; you just have to offer it and notify employees of the option.
Employees who give up their parking benefits will need to fill out a Clean Air Transportation Fringe Benefit worksheet showing how much transit and/or vanpool subsidy they would need monthly. If the subsidy is less than the market value of the parking space, then you must make up the difference by offering additional compensation, an increased contribution to the employee’s health coverage, or a combination of both.
Determining the Market Value: To determine the market value of the parking offered to the employee, look for privately-owned parking facilities within ¼ mile of your organization’s location and take the average of their publicly-advertised price of parking per month. If there are no garages within ¼ mile of the organization expand your criteria to ½ mile. If there are no garages within ½ mile, use $175 per month as the market value. Use this tool to help you determine market value. But remember, $175 is the lowest market value you can claim even if these tools show lower pricing.
Reporting: Starting January 15, 2023 and every other year after that, covered employers will need to submit a report to the District Department of Transportation providing the following information:
- The total number of employees
- The number of employees:
- Offered a parking benefit
- Using a parking benefit
- Offered a Clean Air Transportation Fringe Benefit
- Using a Clean Air Transportation Fringe Benefit
- The first report must be submitted by January 15, 2023 to the District Department of Transportation through their reporting platform.
If your organization chooses to provide a Clean Air Transportation Fringe Benefit, goDCgo can provide effective commuter program recommendations and provide templates to help promote the available benefit to your employees. Schedule a meeting with goDCgo or download our DC Parking Cashout Law Toolkit to get started.
Transportation Demand Management (TDM) Plan
Employers must submit the proposed TDM plan in a format provided by DDOT that includes the following items:
- Total number of employees at work locations within the District
- The number of employees currently receiving parking benefits
- Results of a survey of commute modes of employees who work within the District
- A plan that lists strategies and timeline for reducing the number of employees’ commuter trips made by car by at least 10% from the previous year, until 25% or less of employees’ commuter trips are made by car (including for-hire vehicles)
DDOT will review the submitted plan and provide approval/rejection of the plan within 60 days. Rejected plans have 30 days to amend and resubmit. After approval, employers have 90 days to provide DDOT with evidence demonstrating the employer’s implementation of the plan. Evidence may include, but is not limited to, enrollment in WMATA’s SmartBenefits program and/or employer notifications to its employees concerning transit options and benefits.
Reporting: Starting January 15, 2023 and each subsequent year, employers with an approved TDM plan must submit an annual data report on the mode split of the organization’s employees for the previous calendar year. Employers deemed to be non-compliant with their TDM plan will have 180 days to comply or they will have to fulfill another compliance option. Download the approved TDM Plan template and submit it through the DDOT Reporting Dashboard.
If your organization chooses to complete a TDM plan, goDCgo can help you survey your employees, craft your TDM plan using our template, draft employee notifications, and support the implementation of commuter benefits. Schedule a meeting with goDCgo or download our DC Parking Cashout Law Toolkit to get started.
Clean Air Compliance Fee
If you do not want to implement any of the options above and prefer to continue offering a free or subsidized parking benefit to employees, then you can opt to pay a Clean Air Compliance fee of $100/month per employee who is offered a parking benefit.
For example, if an employer offers free or subsidized parking to 50 of its employees, the employer would need to pay $60,000 a year in a Clean Air Compliance Fee to the DC Treasurer.
Reporting: Starting January 15, 2023 and every other year after that, covered employers will need to submit a report to the District Department of Transportation providing proof of fee payment with the fee calculation and a copy of the check. Reports must be summitted through DDOT’s Reporting Dashboard.
goDCgo does not recommend this option since it will not decrease parking demand, does not encourage the use of alternative transportation, and can be very costly.
Get Help from goDCgo
If you need help navigating the compliance options, schedule a complimentary meeting with a goDCgo Employer Services representative. They will help you decide which option to choose and walk you through the steps to get your organization compliant. Employers can also find DC Parking Cashout resources such as our toolkit, FAQs, recorded webinars, templates, and more on our employer page.