T5.10 Transit benefit ordinances
Have employers offer workers the option of a pre-tax payroll deduction for their expenses commuting using alternative modes.
The City of Seattle’s Commuter Benefits Ordinance requires employers with 20 or more employees to offer them the opportunity to make a monthly pre-tax payroll deduction for transit or vanpool expenses. Because this is a pre-tax deduction, it lowers the income and FICA tax for workers and the payroll tax for businesses.
Berkeley’s Transit Benefit Ordinance requires employers with 10 or more employees to offer a commuter benefit program. The program can be either, 1) a pre-tax plan that allows employees to exclude transit, vanpool, or bicycle expenses from taxable wages and compensation as allowed by federal tax law, 2) a transit subsidy equivalent to the value of an AC Transit regular (local) monthly pass, or 3) an employer-provided shuttle service.
Washington DC’s Commuter Benefits Law gives employers with twenty or more employees the same choices of which benefit to offer, though the details expand the range of benefits some.
New York City’s Commuter Benefits Law only applies to businesses with twenty or more full-time non-union employees, and only provides a pre-tax deduction for the costs of commuting by transit or in a commuter van with at least six passenger seats.