On June 22, 2022, Mayor Jim Kenney signed the Employee Commuter Transit Benefit Ordinance into law (the “Ordinance”). The Ordinance adds new commuter
transit benefit programs in Philadelphia that require certain employers to provide a mass transit and bicycle commuter benefit program, beginning on December 31, 2022.
Who Does this Apply to?
Covered Employers are employers that employ at least 50 Covered Employees. Covered Employees are those who work at least 30 hours per week within the geographic boundaries of Philadelphia for the same employer within the previous 12 months. Click the link below to download the bulletin. As always please reach out to your Total Benefit Solutions, Inc group benefit specialists at (215)355-2121 if there are any additional questions or concerns.
What Are Commuter Benefits?
Commuter benefits allow individuals to set aside pre-tax dollars to pay for work-related transportation costs. This pre-tax benefit can cover fare cards, vouchers, and direct payments to the transit operator (SEPTA, PATCO) or participants’ debit cards. The benefits can also cover shared Uber or Lyft rides when used for a work-related commute, and in some cases, participants can use the benefit towards public parking.
Individuals who take advantage of this benefit will reduce their taxable income…but the perks don’t stop there. Employers who offer commuter and parking benefits to their employees can save up to 7.65% on their payroll taxes. And as part of a bigger benefits package, employers who offer the commuter benefit can use it as a way to attract and retain top quality employees.
Commuter benefits have been around in one form or another since the 1980s, but city-mandated legislation didn’t begin until 2009. San Francisco, California, was one of the first cities to mandate that employers with 20 employees or more must offer commuter benefits. Both Washington D.C., and the five boroughs of New York City mandated that employers with 20 or more workers must offer commuter benefits. Recently New Jersey employers with 20 or more employees will be required to offer commuting benefits—allowing employees to set aside up to $265 per month to put toward their commuting costs. While many cities have enacted these benefits, New Jersey is the first pass this legislation state-wide. This new mandate is specific to the City of Philadelphia and is not a state wide mandate.