Getting There: Private Employers in NYC, DC Must Offer Commuter Benefits in 2016



Beginning Jan. 1, 2016, private employers in New York City and the District of Columbia with at least 20 full-time employees must offer a pre-tax commuter benefits program to employees.

Under the District of Columbia's commuter benefits mandate, employers must provide employees with at least one of three transportation benefits options:

  • pre-tax fringe benefits that allow employees to contribute or defer portions of their salaries to pay for transit passes or vanpooling expenses or be reimbursed for bicycle expenses, up to certain limits set by the federal Internal Revenue Service;
  • employer-paid transit benefits or equal reimbursements of vanpool or bicycling costs; or
  • employer-provided transportation via vanpool or bus offered at no cost to employees. (Sustainable DC Omnibus Act of 2014, D.C. Act 20-385 §§301 to 303 (L. 2014)).

The New York City law does not require employers include qualified parking expenses in the transportation benefits program.

Under the New York City law, a waiver may be granted to an employer that “has demonstrated” that adherence to the law would be an undue hardship. It states, in part, “in the event qualified transportation benefits are no longer permitted to be excluded from an employees' gross income for federal income tax purposes and from an employer's wages for federal tax purposes, this local law shall no longer be effective.”

Employers in both the District of Columbia and New York City can be subject to civil fines and penalties for noncompliance to their commuter benefits laws. The New York City law, however, provides an enforcement adjustment period, stating that “an employer shall not be subject to a civil penalty for any violations” that occur prior to July 1, 2016.

San Francisco was the first metropolitan area to begin a pilot employer-mandated commuter benefits program, in Sept. 2014.  The pilot “Bay Area Commuter Benefits Program,” which includes employers with at least 50 employees,” is scheduled to remain in effect through 2016.

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