Only 45% of people living in New York City own cars, meaning that the average New Yorker is commuting by public transit–whether it’s a bus, subway, or ferry. Keep reading to learn more about NYC’s commuter benefits ordinance, as well as its new tap-to-pay technology. 

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Does New York City have a transit benefit mandate for employers?

Yes. Since January 1, 2016, when New York City’s Commuter Benefit Law went into effect, most NYC 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 NYC’s Commuter Benefit Law?

NYC’s Commuter Benefit Law applies to employers who:

• Have 20 or more non-union employees who each work more than 30 hours a week
• Are based in New York City
• Are for-profit or nonprofit entities, including temporary help firms.

Read the NYC Consumer and Worker Protection overview here.

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What is required of employers to comply with NYC’s Commuter Benefits Law?

Employers must offer full-time employees the opportunity to set aside pre-tax income for use on qualified transit expenses. The federal government sets a limit each year for how much employees can set aside for pre-tax transit expenses, and in 2024 that limit is $315 per month.

Employers must also give their full-time employees a written offer of the opportunity to use pre-tax income to purchase qualified transportation fringe benefits, and maintain a record of the offer and employees’ responses.

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What transit benefits do NYC employees most want?

Employers can only spend their pre-tax transit funds on qualified transit expenses. In New York, most employees use their pre-tax funds on:

• Metropolitan Transportation Authority (MTA) commuter rail, subway, and buses.
• Long Island Rail Road, for trains from Manhattan and Brooklyn to Long Island.
• Amtrak, for national railroad service
• New Jersey Transit, operating between New York City and New Jersey
• ‍Metro-North, for commuter rail between New York and Connecticut
• NYC Ferry service, for waterfront access to all five boroughs
• Access-A-Ride and other area paratransit providers.

Through OMNY, MTA riders can tap their personal bank card to ride the subway and buses. Many employees prefer to access their pre-tax transit funds on a benefits card, especially if it’s available in a mobile wallet for quick, contactless boarding.

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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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Want to learn more?

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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