New York City Commuter Benefits Law


New York City Transit Law Effective 1/1/16

Effective January 1, 2016, the NYC Commuter Benefits Law takes effect. All for-profit and non-profit employers with 20 or more full-time non-union employees in New York City must offer to their full-time non-union employees the opportunity to use pre-tax income (up to $130 per month) to purchase qualified transportation fringe benefits.

The law gives employers a six-month grace period—from January 1 to July 1—to begin offering a commuter benefits program. Employers will not be subject to penalties for violations that take place before July 1. The law also gives employers 90 days to cure (correct) a violation before penalties may be imposed. The first violation will cost between $100-$250 and any violation after will be $250 every 30 days until compliant.

Employees are considered full-time if they work 30 or more hours for the week (average of the last four weeks). Employees who work occasionally in New York City are also covered by this Law if they work 30 or more hours per week (average of the last four weeks), any portion of which is in New York City and the employer has 20 or more full-time non-union employees.

If an employer has 8 full time employees in NYC and 13 full time employees in another NYC location, the employer is subject to the new NYC transit rule.

Even if the employer has 20 or more full time employee located outside NYC, and occasionally employees must work in NYC, the employer must offer a transit plan.

Employers must keep records that demonstrate that each eligible full-time employee was offered the opportunity to use pre-tax income to purchase transit benefits and whether the employee accepted or declined the offer. The Commuter Benefits Law requires employers to keep records for two years. Consult your tax professional to determine other recordkeeping requirements under state and federal law.

Any questions regarding this new law, please visit our transit plan page.