Commuting in New Jersey is more expensive than ever–tolls on the Garden State Parkway and New Jersey Turnpike have increased by 3%, and, starting this July, NJ Transit trains and buses will see a 15% fare hike. It’s clear that saving money on their commutes is only growing in importance for employees–so keep reading for everything you need to know about getting to work in New Jersey, and how to pay for it.  

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Does New Jersey have a transit benefit mandate for employers?‍

Yes. Since March 1, 2020, when New Jersey’s Commuter Benefit Law went into effect, most New Jersey 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 New Jersey’s Commuter Benefit Law?

New Jersey’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 Jersey

Read the full text of the New Jersey Commuter Benefit Law here.

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How can employers comply with New Jersey’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 transit, and maintain a record of the offer and employees’ responses.

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What are the consequences for employers that don’t comply with New Jersey’s Commuter Benefit Law?

Employers have 90 days from the date of the violation to provide a “cure” that meets the law’s requirements. If they still don’t provide a pre-tax transit benefit after those 90 days, they can expect a penalty of $100-250 for their first violation, and then another $250 for each additional month before a benefit is offered.

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Who can help employers get set up with pre-tax commuter benefits?

Jawnt has helped some of the largest employers on the east coast with their commuter benefits programs, including pre-tax benefits. You can schedule some time with us here, or talk to your local TMA:

Cross County Connection TMA

Greater Mercer TMA

Hudson TMA

goHunterdon

Keep Middlesex Moving TMA

Ezride

RidewiseTMA

Avenues in Motion

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What transit benefits do New Jersey employees most want?

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

• New Jersey Transit (NJT) rail and bus monthly passes

• New York City regional mass transit services, including Metropolitan Transportation Authority (MTA) subway and bus
• Amtrak monthly passes and 10-ride passes
• PATCO stored value
• SEPTA monthly passes
• Long Island Rail Road monthly passes
• Metro-North monthly passes
• Eligible ferry and water taxi services
• Eligible vanpool services
• Eligible commuter bus services
• Access-A-Ride and other area paratransit providers

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MTA and SEPTA riders can tap their personal bank card, or commuter debit card like Jawnt Pass, to ride the subway and buses. Many employees prefer to access their pre-tax transit funds on a commuter debit 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.
• Incentivizing transit usage reduces demand for parking, which can be expensive for employers to provide.
  
  

What about employees?

• Commuter benefits make employees more willing to embrace return-to-office mandates.
• Pre-tax transit benefits are a relatively low cost, high impact, and demonstrable commitment to carbon reduction and environmental sustainability.

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Want to learn more?

Jawnt has helped hundreds of thousands of employees with pre-tax benefits, and can help your organization stay in compliance–whether your team is just in the garden state, or distributed nationwide. Schedule a meeting to learn more. 

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