Worried about complying with Chicago’s recently-passed commuter benefits mandate? No worries–keep reading to see if the law applies to you, how to stay in compliance, and what benefits Chicago-area employees want the most. 

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Does Chicago have a transit benefit mandate for employers?

Yes. Starting January 1, 2024 when the Transportation Benefits Program Act (TBPA) went into effect, most Chicago-area employers are now required to provide their employees with the opportunity to set aside a certain amount of their income pre-tax to cover commuting expenses. 

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Who is affected by the Transportation Benefits Program Act?

The TBPA applies to all employers who:

• Have 50 or more full-time employees.
• Are located within one mile of a “fixed route transit service” (a bus or train stop) in Cook County, Lake County, Will County, Kane County, DuPage County, and McHenry County, including West Deerfield Township, Downers Grove Township, Grant Township, York Township, Vernon Township, Joliet Township, Charles Township, Milton Township, Plainfield Township, Avon Township, Frankfort Township, Warren Township.
• Do business as an individual, partnership, association, corporation, limited liability company, government, non-profit organization, or business trust.

Within those employers, the TBPA applies to employees who:

• Have been employed for 120 days.
• Work at least 35 hours a week.
• Receive compensation on a full-time basis.

Note that any transportation benefits that were won through collective bargaining will remain in effect, and unions can still bargain for benefits that exceed these minimum requirements. 

Read the full text of the Transportation Benefits Program Act.

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What’s required of employers under the Transportation Benefits Program Act?

Qualified employers must offer eligible employees the opportunity to set up to $315 a month aside from their paycheck to be used towards transit. These funds must be used to purchase a transit pass. Transit passes are defined as “any pass, token, fare card, voucher, or similar item entitling a person to transportation on public transit.”

For Chicago employees, pre-tax transit funds can be spent on the following, but are not limited to:

• CTA/Pace Unlimited 30-day pass ($75)
• CTA/Pace 7-day Pass ($20)
• CTA/Pace 3-day Pass ($15)
• CTA/Pace 1-day Pass ($5)
• Single trip fare on the ‘L’ train ($2.50)
• Single trip CTA bus fare ($2.25)
• Metra Monthly Passes ($75-135)
• Metra Day Pass 5-Pack ($35.75-64.25)
• Metra Day Pass ($7.50-13.50)
• Metra One-Way fare ($3.75-6.75)
• Metra Weekend Pass ($10)
• Regional Connect Pass ($30)
• New Ventra Cards ($5)
• Stored value on a personal Ventra Card (unlimited)
• Amtrak 10-Ride Tickets (starting at $33)
• Amtrak Monthly Tickets (starting at $261)
• Chicago Water Taxi 10-Ride Pass ($25)
• Chicago Water Taxi One-Way Ticket ($10)

Pre-tax transit funds cannot be spent on:

• Divvy Bikeshare membership or individual Divvy rides
• Buying or maintaining a personal bicycle
• Taxis, Uber, Lyft or other ride-hailing services
• Parking, including at transit stations

Employers have the option to offer pre-tax parking as well, but it isn't required in Chicago.

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Why are commuter benefits good for employers?

• Employers can reduce their payroll taxes because the payroll set aside for pre-tax transit benefits are not taxable income. Payroll deductions save employers directly.
• Pre-tax benefits make employers more competitive for top talent.
• Commuter benefits make employers more willing to embrace return-to-office mandates.
• Incentivizing transit usage reduces demand for parking, which can be expensive for employers to provide.
• Pre-tax transit benefits are a relatively low cost, high impact, and demonstrable commitment to carbon reduction and environmental sustainability. Jawnt can help you measure and report the carbon your organization is saving by supporting transit.

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What transit benefits do Chicago employees most want?

To meet the minimum requirement of the mandate, employers only need to give their employees the option to set aside their own payroll funds for transit. But many employers chose to do more.

Popular transit benefit offerings include:

• Providing a monthly transit pass to the employee’s choice of transit agency. This could be CTA, Pace, Metra, or Amtrak.
• Subsidize the transit pass. Employees can receive up to $315 a month in transit benefit pre-tax, and this can be in a combination from their own paycheck or from the employer as a subsidy.
• Though Chicago is served by multiple transit agencies, the Ventra Card works flexibly across all of them. Employees can transfer their pre-tax transit funds to their Ventra Card and ride whatever system works for them, without admins having to wrangle individual agency rules.

Jawnt’s team of transit planners and benefit administrators are available to help you understand your options, requirements, and find a solution that will satisfy employers and employees alike. Drop us a line today to get started.

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