There are a number of commuter benefit ordinances that exist throughout the country. Please check with your local authorities regarding any local ordinances that may affect your benefit offerings. Here is a brief summary of the major metropolitan areas that have ordinances in place or becoming effective soon.
New York City
Effective January 1, 2016, every employer with 20 or more full-time employees working in the City of New York (including the 5 boroughs) will be required to offer a qualified pre-tax transportation benefit.
Effective January 1, 2016, every covered employer with 20 or more employees must provide one of: (1) Pre-tax election transportation benefits, (2) employer-paid transportation benefit or (3) employer-provided transportation at no cost. Learn More
Additionally, in April 2020, the District of Columbia (D.C.) passed the Transportation Benefits Equity Amendment Act (informally referred to as the “Parking Cashout” law). Every covered employer with 20 or more employees who leases or offers parking to its employees at a free or subsidized rate must offer a parking cashout, develop a transportation demand management plan, or pay a clean air compliance fee. Learn More
Los Angeles has several initiatives aimed at reducing single-occupancy vehicle use. Employers with 250 or more employees are required to register a plan with the South Coast Air Quality Management District to reduce emissions. Additionally, an ordinance is being implemented that requires employers with 50 to 249 employees to offer a qualified pre-tax transportation benefit. Penalties will vary based on the employer’s size when filed and even the progress made toward reducing emissions. Employers with 250 or more must file with the South Coast Air Quality Management District. The Los Angeles County Metropolitan Authority oversees the ordinance affecting employers with 50 to 249 employees.
As of September 30, 2014, employers with 50 or more employees across the nine-county San Francisco Bay Area are required to offer one of four programs designed to reduce the number of single occupancy vehicles on the road, including the option to offer a pre-tax transit program. Learn More
Adopted in 2009, businesses with a location in the City of San Francisco with 20 or more employees nationwide are required to offer one of the following: (1) Pre-tax election transportation benefits, (2) employer-paid transportation benefit or (3) employer-provided transportation at no cost. Learn More
Effective January 2, 2021, every business in Seattle with at least 20 employees worldwide must offer the benefit to any employee working at least 10 hours a week. The ordinance does not apply to government entities and tax-exempt organizations. Covered employers can comply with the ordinance by doing one of the following: (1) Allowing employees to make a pre-tax deduction for transit or vanpool expenses, up to the full amount allowed by federal law; or, (2) Subsidizing all or part of the purchase price of a transit pass.
Every employer in the State of New Jersey that employs at least 20 people must offer all employees the opportunity to utilize a pre-tax transportation fringe benefit. An employee is identified as anyone hired or employed by the employer and who reports to the employer’s work location. This mirrors the definition used in unemployment compensation law. There are exceptions and special timing considerations for employees covered by a collective bargaining agreement and those employed by the Federal Government.
Effective December 31, 2022, the Employee Commuter Transit Benefit Programs will apply to any business with employees in Philadelphia that employs at least 50 covered employees. Covered employees must be offered an election of a pre-tax payroll deduction for Mass Transit Expenses or Qualified Bicycle Expenses, an employer-paid benefit where the covered employer supplies a Fare Instrument for a covered employee, or any combination of the two. Employers violating the ordinance will have 30 days to comply, followed by a written warning. Following the written warning, additional failure to comply will result in a penalty fine between $150 to $300 per day. Learn More
The Transportation Benefits Program Act was signed into law on July 28, 2023, and goes into effect on January 1, 2024. Covered employers must comply with this Act by offering a pre-tax commuter benefit program for transit within the first 120 days of employment to all employees working an average of 35 or more hours per week. Employers with 50 or more covered employees within a covered geographic area must comply. There are ~35 different municipalities that are subject to it. Employer locations must be within 1 mile of a fixed-route transit service. RTA must provide a searchable map of addresses to determine who must comply. All transit agencies will be required to market the existence of this program and this Act to their riders to inform affected employees and their employers. Learn More