As of January 1, 2016, covered employers in New York City are required to offer commuter benefits to certain full-time employees. Commuter benefits enable employees to purchase eligible transit on a pre-tax basis. This pre-tax deduction benefits both employers and employees by reducing taxes to be paid.
What Employers are Covered by the Law?
Both for-profit and not-for-profit employers with 20 or more full-time employees (non-union) working in New York City are covered and must provide the benefit. Federal, state, and city government agencies are not required to provide the benefit and neither are employers who are not required to pay federal, state, and city payroll taxes.
What Employees are Covered by the Law?
All full-time employees of covered employees are eligible for the benefit. A full-time employee under the law is defined as one who works an average of 30 hours or more per week in a four-week period. The law does not cover employees who work less than that amount of time. Employees who live in NYC but work outside of NYC, employees covered by a collective bargaining agreement, and independent contractors are also not covered by the law.
Which Transit is Covered by the Law?
The following transit methods are covered:
- MTA Subway and Bus
- LIRR
- Amtrak
- NJ Transit
- Metro-North
- Eligible ferry services
- Eligible vanpool services
- Eligible commuter bus services
- Access-A-Ride and other paratransit providers
The following are not covered by the law:
- Parking expenses
- Bicycling expenses (including CitiBikes)
How can an Employer Comply with the Law?
You can manage a computer benefits program yourself or use a third-party provider. If you manage the program yourself, you should consult an attorney or accountant to understand how to comply with all applicable laws and rules. Many third-party providers are available to help you manage a commuter benefits program. Some providers include:
- Benefit Resource
- Commuter Benefit Solutions
- Leading Edge Administrators
- Qualifies Transportation Benefits
- TotalBen
- WageWorks
You can also consult your payroll processor. Many payroll processors have programs that will fully integrate with your existing systems and make compliance with this law easier.