Philadelphia Employers Prepare to Provide Qualifying Mass Transit Benefits
Employers in Philadelphia should review their existing commuter benefit programs for Compliance with a new City Ordinance. Effective December 31, 2022, the “Ordinance” requires that a covered employer provide at least one of the following commuter transit benefits to its covered employees:
- Election of a pretax, payroll deduction for (a) a fare instrument (fare card, transit pass, or token) or transportation in a commuter highway vehicle (as defined in IRS Code Section 132(f)(5)(B) (generally vehicles that sit 6 or more passengers are used primarily for commuting purposes); (b) a “qualified bicycle expense,” each consistent with the deduction allows under Section 132(f).
- An employer-paid benefit that supplies a fare-instrument for a covered employee’s mass transit expense; or
- Any combination of 1 and 2 above.
Which Employers does this apply to?
If you employ 50 or more “covered employees” in Philadelphia this Ordinance applies to you.
Who is a Covered Employee?
Covered employees means any person working an average of 30 hours (or more) per week in Philadelphia, for the same employer, over the last twelve months.
What if we aren’t headquartered in Philadelphia?
The law still applies to you if you employ 50 or more covered employees. (So, a company with 25 employees in Philadelphia and another 30 in Cherry Hill, NJ would not need to comply based on the “covered employee” definition).
Isn’t this happening in other cities?
Yes. Philadelphia joins a growing list of cities (and municipalities) that have implemented their own requirements for transit benefits. New York, Washington, DC, San Francisco, and others have made similar choices.
Linked below you’ll find details about New Jersey’s 2019 requirement that employers offer a similar benefit to its employees.
Please contact your Account Manager or Sales Executive for additional assistance.
Links
Related articles
As per Notice 2023-70, the IRS is adjusting the fee that insurers or self-insured health plan sponsors will pay to fund the federal Patient-Centered Outcomes Research Institute (PCORI) trust fund for...
Employers who encourage their employees to leverage their available paid time off benefits oftentimes realize increased productivity levels amongst their employee population. Paid time off is often...
Since the pandemic, there has been a growing trend of using extended employee paid time off and sabbaticals in the workforce. To avoid any disruptions in productivity within the organization, it is...