Britain's first council-imposed workplace parking charge scheme has begun, with firms likely to have to fork out a total of around £8 million in the first year.
Nottingham City Council, which is running the scheme, said it will help fund major transport improvements in the area.
But the AA dubbed the scheme "a tax on work" which would damage local businesses and employees.
Known officially as a Workplace Parking Levy (WPL), the scheme requires companies in the city of Nottingham to pay an annual fee of £288 for each parking space on offer to employees if more than 10 spaces are provided. Companies with 10 or fewer places and emergency services do not have to pay any charge but do need to be licensed under the WPL scheme.
So far employees have licensed 45,500 places at more than 3,000 parking premises around the city. It is anticipated that one in three workplace parking places in the city will be covered by the scheme by the end of March 2013.
The money raised has to go on public transport. Schemes that will benefit include Nottingham's tram service, improvements to the city's rail station and bus improvements.
Councillor Jane Urquhart, the head of transport and planning on Nottingham City Council, said: "The WPL provides a vital funding stream. Without it we wouldn't be having two more tram lines, or indeed the railway station redevelopment, both of which are now under construction."
AA president Edmund King said: "At a time when drivers are facing record prices at the pumps, further charges for parking at work are the last thing they need. This damaging 'tax on work' should be stopped from spreading elsewhere as it will damage the economy and hit employees who just can't afford it."
Professor Stephen Glaister, director of the RAC Foundation, said: "The council blames commuters for Nottingham's congestion, but people travelling in to the city to work make it the prosperous place it is."
From April 1 2013, the charge per space will increase to £334, rising to £364 in April 2014 and to £381 in April 2015.