State law requires certain employers who provide subsidized parking for their employees to offer a cash allowance in lieu of a parking space. This law is called the parking cash-out program. The intent of the law is to reduce vehicle commute trips and emissions by offering employees the option of "cashing out" their subsidized parking space and taking transit, biking, walking or carpooling to work. For years, negative tax implications limited the implementation of the law. But in 1998, federal legislation fixed this problem.
The Air Resources Board has developed a guide that explains the law and answers the questions most frequently asked by employers.
Employers: The guide will help you determine whether you must implement a parking cash-out program.
Employees: If your employer pays for all or part of your parking, ask your employer if you are entitled to the parking cash-out choice.
This report presents eight case studies of employers who have complied with California's parking cash-out requirement. Cashing out reduced total vehicle emissions for commuting by 12 percent, with a range from 5 to 24 percent for the eight firms. More information.