Commuter benefits compliance in Seattle

Seattle's Commuter Benefits Ordinance took effect January 1, 2020. It applies to employers with 20 or more employees worldwide that have any employees working in Seattle. They must offer covered employees a pretax payroll deduction for transit or vanpool, up to the federal IRS limit of $340 per month in 2026.

Who is covered

A covered employer has 20 or more employees worldwide. A covered employee is an employee who has worked an average of 10 or more hours per week in Seattle for the previous month. Tax-exempt organizations and government agencies are exempt.

What you must offer

You must offer one of two compliance paths:

1. Pretax payroll deduction up to the federal monthly limit ($340 per month for transit and vanpool in 2026).
2. Employer-paid subsidy of up to $340 per month per employee for transit or vanpool use.

How this relates to the Washington CTR law

The Commute Trip Reduction (CTR) law is a Washington state law from 1991. Seattle adopted a local CTR ordinance for affected employers. Generally that means 100 or more full-time employees at one worksite who start work between 6 a.m. and 9 a.m. on weekdays.

Affected employers must share CTR program information at least twice a year and with each new hire. They must also select at least two strategies from each CTR strategy category.

CTR compliance and the Seattle Commuter Benefits Ordinance are separate obligations. Many employers need to satisfy both.

How to comply (CBO)

1. Identify covered employees (10+ hours per week in Seattle).
2. Notify them in writing of the pretax option.
3. Set up payroll for pretax transit deductions.
4. Keep records of the offer and any elections.

Penalties

Seattle's Office of Labor Standards enforces the CBO. The first violation typically results in a notice of violation and a remediation period. Continued noncompliance can result in monetary penalties.

What Alice does in Seattle

Alice covers the CBO pretax obligation. Employers who want to can also offer qualified parking, up to $340 per month in 2026.

Alice has connections to ADP, UKG, Paylocity, Paycom, Paychex, Toast, Workday, and 25+ others. There is no up-front employer cost. There is no manual open enrollment to manage.

Sources

• Seattle Municipal Code Chapter 14.30 (Commuter Benefits)
• RCW 70A.15.4000 (Washington Commute Trip Reduction Law)
• IRS Rev. Proc. 2025-32 (2026 inflation adjustments)

Talk to sales

sales@thisisalice.com or (929) 552-4625.

Specific benefits, election rules, and run-out periods depend on your employer's plan design. Check with your HR team or plan administrator for details.

Figures shown are for the 2026 plan year and are set by the IRS. Limits are indexed annually by the IRS.

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Alice does not provide tax, legal, or financial advice. Consult your own tax preparer, lawyer, or financial advisor for guidance specific to your situation.