Home to employers like Amazon, Starbucks, Deloitte, Boeing and Microsoft, Seattle is no stranger to large employer campuses and their unique transportation needs. Keep reading to learn more about commuter benefits, bulk passes, and ORCA cards.
Does Seattle have a transit benefit mandate for employers?
Yes. Since January 1, 2020, when Seattle’s Commuter Benefit Law went into effect, most Seattle employers are now required to provide their employees with the opportunity to set aside a certain amount of their income pre-tax to cover commuting expenses.
Who is affected by Seattle’s Commuter Benefit Law?
Seattle’s Commuter Benefit Law applies to employers who:
- Have 20 or more employees based anywhere in the world
- Have one or more employee who works at least 10 hours per week in Seattle
- Operate as a for-profit entity. Tax-exempt organizations and government agencies are exempt.
Read the Seattle Labor Office’s summary here.
What transit benefits do employers have to provide to comply with Seattle’s Commuter Benefits Law?
Employers must offer one or more of the following benefits to comply with the Seattle Commuter Benefits Law.
- The ability to make a pre-tax deduction for transit or vanpool expenses up to the full amount allowed by federal law ($315 a month in 2024).
- A transit pass that is fully or partially paid for by the employer.
Employers must also follow noticing requirements. To ensure that employees can reasonably find information about their program options, employers must:
- Display a poster that gives notice of an employee’s rights to exclude commuting costs incurred for transit or vanpool expenses from their taxable earnings. Employers must display the poster in English and in the primary languages of the employees at the workplace. See these example posters from the Seattle Office of Labor Standards.
- Offer a commuter benefit to covered employees within 60 calendar days after starting to work 10 hours per week or more.
- Make the offer of commuter benefits in writing. Note that an “offer” is something that is presented specifically to the employee for acceptance or rejection.
- Provide chosen benefits within 30 calendar days of the covered employee selecting the option. Note that employees must be able to change their mind and accept the benefit after it is initially offered.
Employers must also maintain records to show that they’re in compliance with the Seattle Commuter Benefits Law for a minimum of three years, and be responsible for providing that documentation to the Department of Labor Standards upon request. After January 1, 2021, individuals have three years from the date of the alleged violation to file a complaint with OLS.
What transit benefits do Seattle employees most want?
The following transit passes are all available through ORCA and can be loaded directly onto employees’ existing personal ORCA Cards.
- Cash value in an ORCA Card e-purse.
- ORCA Regional Monthly Passes, accepted for travel on Community Transit, Everett Transit, King County Metro, King County Water Taxi, Kitsap Transit, Monorail, Pierce Transit, Seattle Streetcar, and Sound Transit.
- Kitsap Transit monthly passes
- King County Metro monthly passes
- Pierce Transit monthly passes
- Washington State Ferries monthly passes (available only on routes serving Mukileo-Clinton, Vashon Island, Fauntleroy-Southworth, Port Townsend-Coupeville, Central Sound)
- Washington State Ferries 10-ride passes (available on the routes above as well as Anacortes-San Juan Islands).
What do Seattle employers need to know about the vanpool option?
Seattle is unique because vanpool benefits are accepted to satisfy its Commuter Benefit Law. Vanpools, also known as “commuter highway vehicles”, are highway-ready vehicles that seat at least 6 adults (not including the driver). To qualify as a vanpool, the vanpool organizer must reasonably expect that at least 80% of the vehicle mileage will be for transporting employees between their homes and workplace with employees occupying at least one-half the vehicle's seats (not including the driver's).
The monthly pre-tax deduction limit applies to vanpool and transit combined.
Read more about Seattle vanpools here.
Can employers purchase discounted transit passes for their employees?
While employers can’t purchase discounted passes, they can buy them in bulk to distribute to their employees. In fact, King County Metro in Seattle has administered its employer program since 1993, and now over 60 percent of transit trips in the Puget Sound Region are made with an employer-provided pass. You can read more here.
Why are commuter benefits good for employers?
- Employers can reduce their payroll taxes because the payroll set aside for pre-tax transit benefits are not taxable income. Payroll deductions save employers directly.
- Pre-tax benefits make employers more competitive for top talent.
- Commuter benefits make employers more willing to embrace return-to-office mandates.
- Incentivizing transit usage reduces demand for parking, which can be expensive for employers to provide.
- Pre-tax transit benefits are a relatively low cost, high impact, and demonstrable commitment to carbon reduction and environmental sustainability. Jawnt can help you measure and report the carbon your organization is saving by supporting transit.
Want to learn more?
Jawnt’s team of transit planners and benefit administrators are available to help you understand your options, requirements, and find a solution that will satisfy employers and employees alike. Drop us a line today to get started.
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