New York City Requires Employers to Provide Tax-Free Commuter Benefits
Effective Jan. 1, 2016, New York City's Transportation Benefits Law will require employers with more than 20 full-time employees working in New York City to offer their employees the option of using pre-tax earnings to purchase qualified transportation fringe benefits. The law applies to public, non-profit, and for-profit employers. Certain employers are exempt from the law's requirements, including government employers and employers covered by a collective bargaining agreement (“CBA”). However, an employer that has 20 or more full-time employees not covered by the CBA, must offer those full-time employees commuter benefits.
The law allows employers to provide, at their own expense, a transit pass or similar payment for transportation in lieu of the pre-tax earnings benefit. However, if the transit pass is valued at less than $130 per month, the employer must offer its employees the opportunity to make up the difference in a pre-tax payroll deduction.
Employers are required to maintain records of their offer of transportation benefits and the employee's acceptance or rejection of the offer.
Although the law is effective Jan. 1, it provides a grace period for violations prior to July 1, 2016. A more detailed summary of the law is available here.
Contact: Karen Lipson, email@example.com, 518-867-8383 ext. 124.