​(July 21, 2011) A California Chamber of Commerce-opposed bill that raises employer costs and opens them to potential liability by mandating employers to offer commuter benefit programs to employees  is awaiting action by the Governor.

SB 582 (Yee; D-San Francisco) authorizes metropolitan planning organizations (MPOs) to mandate employers in their jurisdiction to offer one of three options to their employees for commuting purposes:

1. a pre-tax option where employees can exclude from their taxable wages commuting costs incurred for public transit, as allowed under federal law;
2. the employer would directly pay for public transit costs; or 
3. the employer would offer a vanpool service. 

The CalChamber has several concerns with the bill:

• Federal law already allows employers to take advantage of the payroll deduction. Some employers already do this on their own accord. Considering this is allowed under federal law and that some companies already use it because it fits their business, there is no need to mandate it on the state or local levels. This is more of a public outreach issue where employers may not be aware they can offer this benefit to their employees.
• There could be employer liability issues. If an employer opts to provide a vanpool (Option 3) and there is a car accident or other incident onboard where employees get injured, there could be employer liability issues, including workers’ compensation issues. Under Option 2, because the employer is directly subsidizing the costs, it can be argued that it is employer-controlled and therefore the employer can be held liable. Although very large employers may be able to absorb such costs, small business owners will not be able to do the same.
• The mandate’s impact on small business would be much more than for large employers. Small businesses are already hurt by the weak economy, and do not need more mandates to further restrict them. There is a cost to implement the program that must be borne by employers large and small. Small employers will find it difficult to absorb the costs.  While there may be cost savings down the road, this is a business decision and should not be mandated.

CalChamber believes there are other ways to reach the same goal without placing burdensome requirements on businesses. 

CalChamber is concerned that this is a heavy-handed, one-size-fits-all approach that fails to consider the size of the company, its location in regards to public transit accessibility, employer liability issues, and education and awareness on behalf of the employer about what is allowed under federal law. 

Action Needed

CalChamber is urging its members to contact the Governor and urge him to veto SB 582.