Covered employee:

1. Any individual who has worked an average of at least 10 hours per week for compensation within the city limits of Berkeley for the same employer during the past 12 months, and
2. Is either entitled to receive minimum wage under California law or is participating in a welfare-to-work program.
   

Covered employee:

Any business, as defined in Section 18 of the California Labor Code, that employs an average of 10 or more individuals per week for compensation. This includes all full-time, part-time, and temporary workers—regardless of whether they work inside or outside of Berkeley (see below)—as well as workers placed by staffing or temp agencies. Governmental entities are not considered covered employers.

Businesses with 50 or more employees, working 30+ hours per week in Berkeley or across the Bay Area must also refer to and register with the Bay Area Commuter Benefits Program.

To be compliant—and to be listed on the official record of compliant companies—you must follow the city's or state’s commuter benefits requirements.

→ Download the full list of compliant companies and see if you are on it

For Berkeley employers to comply, they must:

1. Offer commuter benefits using one of four IRS-approved options:
   1. Pre-tax payroll deductions (up to $325/month) for transit or vanpool costs
   2. An employer-paid subsidy equal to the cost of a San Francisco Muni “A” Pass (includes BART)
   3. Employer-provided transportation, like a shuttle or van service
   4. Or any combination of the above
2. Register with the city and maintain ongoing compliance by completing 8–12 setup steps, conducting quarterly reviews, keeping records, and submitting annual updates to avoid fines.

Financial penalties in Berkeley are determined on a case-by-case basis and can reach up to $3,000 in the first year. Late fees of 10% may apply, along with 1% interest per month, escalating every 30 days. For larger companies, these ongoing violations can quickly add up, making non-compliance a serious and costly risk.

For the Berkely, the nationwide IRS tax-free limits for commuter benefits apply. For 2025, employees can allocate up to $325 per month for transit and $325 per month for parking, reducing taxable income.

• Pre-tax savings: Employees can lower their taxable income by setting aside funds for transit and vanpool expenses.
• Employer tax benefits: Businesses save an average of 7.65% per employee on payroll taxes.
• Direct transit subsidies: Employers can provide up to $325 per month per employee in tax-deductible transit benefits.
• Additional incentives: Some cities and states offer grants, tax credits, or subsidies for implementing commuter benefit programs.

The mandate applies to the entire City of Berkeley and, where applicable, across all nine counties within the Bay Area: Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma.