The Council of the District of Columbia has approved a new transportation benefit law (D.C. ACT 23-305) that requires employers who provide parking benefits to also offer ‘clean-air’ transportation benefits to their employees. The law also requires the employers to submit annual/bi-annual reports and TDM plans to the city. Here is what you need to know about D.C.’s new parking cash out law.
Summary of the Parking Cash Out Law
The law requires employers who offer a parking benefit to also do one of the following:
- Offer a Clean Air Transportation Fringe Benefit, for modes of transportation such as Metro, bus, vanpool, or bicycling.
- Pay a Clean Air Compliance fee of $100 per month for each employee offered a parking benefit.
- Successfully implement a transportation demand management (TDM) plan, subject to DDOT approval, that would reduce the number of commuter car trips made by employees by at least 10% from the previous year until no more than 25% employees’ commuter trips are made by car. The TDM plan must include an annual reporting requirement that provides data to demonstrate compliance with the required trip reductions. Non-compliance requires the employer to begin offering a Clean-air Transportation Fringe Benefit or to begin paying a Clean Air Compliance fee, after a 180-day adjustment period to try to bring the TDM plan into compliance.
An employee cannot accept the Clean Air Transportation Fringe Benefit unless they forfeit the parking benefit offered by the employer.
If the amount of Clean Air Transportation Fringe Benefit used by the employee is less than the amount of the Clean Air Transportation Fringe Benefit offered by the employer (as required under the law), the employer shall provide the employee additional compensation and/or an increase in contribution to the employee’s health coverage to make up for the difference.
Each covered employer is required to submit a report by January 15, 2023 and every two years thereafter that includes 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, and
- Using a Clean-air Transportation Fringe Benefit
Who Does the Law Apply To?
The law applies to employers with 20 or more employees located in Washington, DC who offer parking benefits to any employees. Parking benefits include employer paid or subsidized parking (such that the employee pays less than the market rate parking cost) for an employee’s personal vehicle on site or within ½ mile of the site.
Exemptions:
- Parking offered to an employee who is required to use a personal vehicle in the regular performance of their work is not considered a parking benefit.
- Covered employers who owned the parking spaces used by employees prior to October 1, 2020 and who continue to own those parking spaces are exempt.
- Covered employers who leased the parking spaces used by employees prior to October 1, 2020 are exempt until the end of the current lease term.
- Covered employers who were subject to a TDM plan (reviewed by DDOT) prior to October 1, 2020 are exempt until the end of the current term of the TDM plan or after five years, whichever is earlier.
- Covered employers who were subject to a Campus Plan prior to October 1, 2020 are exempt until the end of the current term of the Campus Plan, if the Campus Plan requires annual reporting of the current percentage and year-over-year change in trips made by car, performance standards related to the reduction in auto trips, and policies the employer will adopt to meet the performance standards.