August 2022

State Updates


DC requires certain employers to provide transportation benefits


Author: ADP Admin/Tuesday, June 30, 2020/Categories: Compliance Corner , State Compliance Update, Washington, D.C.

The District of Columbia has enacted legislation (Act 23-305) that will require employers offering parking benefits to offer employees a transportation benefit, pay a fee, or implement a plan to reduce commuting to work by car.

Effective Date:

Before the law can take effect, it must go through a 30-day Congressional review period and its fiscal impact must be printed in an approved budget and financial plan. Employers should monitor the status of the law closely to ensure compliance.

Covered Employers:

The law applies only to employers that offer employees a parking benefit, which is defined as personal motor vehicle parking, on or within 0.5 miles of the business premises and located in the District, offered to an employee, in addition to compensation, either directly by the employer or through an employer subsidy, for which the employee pays nothing or less than market value.

Excluded from the definition is parking that is offered to an employee who is required to use a personal motor vehicle in the regular performance of their work.

The law also doesn't apply to a parking benefit offered by an employer that, before the effective date of the law, owned, and continues to own, the parking spots used by the employees who are offered a parking benefit.


Under the law, covered employers must do one of the following:

  • Offer employees a Clean-Air Transportation Fringe Benefit in an amount equal to or greater than the monthly market value of the parking benefit offered to the employee.
  • Pay a Clean Air Compliance fee of $100 per month for each employee who is offered a parking benefit.
  • Implement a transportation demand management plan to reduce by at least 10% from the previous year the number of commuter trips employees made by car, including for-hire vehicles, until 25% or less of employees' commuter trips are made by car. The plan must be submitted to the District for approval. Additionally, employers with approved plans must submit annual data reports on the actual commute mode share of its employees.

Clean-Air Transportation Fringe Benefit:

A Clean-Air Transportation Fringe Benefit is defined as a benefit in addition to compensation for:

  • Transportation in a commuter highway vehicle, if such transportation is in connection with travel between the employee's residence and place of employment;
  • Any transit pass; or
  • Any qualified bicycle commuting reimbursement.

Employees are barred from accepting the benefit unless they have declined the parking benefit. An employee who accepts a Clean-Air Transportation Fringe Benefit must estimate the amount that the employee will use each month. If the estimate is less than the Clean-Air Transportation Fringe Benefit offered to the employee, the covered employer must provide the employee with additional compensation, an increased contribution to the employee's health coverage, or both to make up for the difference.

Employer Reporting:

Every covered employer must submit a report to the District that includes:

  • The total number of employees;
  • The number of employees:
  • Any other information required by the mayor by rulemaking.

The report will be due within 90 days after the law takes effect and every two years thereafter.

Compliance Recommendations:

Covered employers should review policies and practices to ensure compliance with Act 23-305. Please contact your dedicated service professional with any questions.

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Tags: 07/02/20

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