NJ Passes Commuter Benefit Law

This new ordinance would require employers with more than 20 employees to offer commuter benefits.

New Jersey Employers Must Now Offer Employees Pre-Tax Commuter Benefits!

New Jersey Governor Phil Murphy recently signed S.1567 into law, making New Jersey the first state to mandate a commuter benefit.  New Jersey’s law requires employers in the state to offer pre-tax commuter benefits to employees. While the law is currently in effect, it is not operative until the earlier of: 365 days following the date of enactment (March 1, 2019), or the effective date of rules and regulations that the law directs the Commission of Labor and Workforce Development to adopt. New Jersey is now the first state to mandate a commuter benefit. New York City adopted a similar law in January 2016. 

 

How does the NJ commuter law impact employers?

The state’s new commuter benefits law requires employers that employ at least 20 workers to offer a pre-tax transportation fringe benefit to all employees who are not subject to a collective bargaining agreement. Any employer found to be in violation of the requirement shall be liable to a civil penalty. 

 

When does the new law take effect?

While the law is currently in effect, it is not operative until the earlier of: 365 days following the date of enactment (March 1, 2019), or the effective date of rules and regulations that the law directs the Commission of Labor and Workforce Development to adopt.

 

Failure to comply

Employers that fail to comply with the law are subject to a penalty of between $100 to $250 for the first violation. Before a penalty is imposed, however, employers will have 90 days from the date of the violation to offer the pre-tax transportation fringe benefit program.If, after the 90-day cure period, the employer does not adopt a pre-tax transportation fringe benefit, it will be subject to a $250 penalty for each additional 30-day period in which an employer fails to offer the benefit.

 

Why Choose Us?

Discounted Pricing of $1.50 PPPM

Employer Portal for Reports/Enrollments

Easy to use Commuter Debit Card

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Frequently Asked Questions

 

What is a commuter account?

 
A commuter account is an employer-sponsored benefit program that allows you to set aside pre-tax (and in some cases if your employer allows, post-tax) funds in separate accounts to pay for qualified mass transit and parking expenses associated with your commute to work.
 

Why should employees participate?

Contributions to a commuter account are deducted from the employees paycheck on a pre-tax basis, reducing their taxable income. Employees can save an average of 30% on eligible transit and parking expenses.

What is a qualified mass transit expense?

Qualified expenses include transit passes, tokens, fare cards, vouchers, or similar items entitling the employee to ride a mass transit vehicle to or from work. The mass transit vehicle may be publicly or privately operated and includes bus, rail, or ferry.

What qualifies as van-pooling?

Van-pooling is not to be confused with carpooling. Vanpooling requires a commuter highway vehicle with a seating capacity of at least 7 adults, including the driver. At least 80 percent of the vehicle mileage must be for transporting employees between their homes and workplace with employees occupying at least one-half of the vehicle’s seats (not including the driver’s seat).

What is a qualified parking expense?

Employees can get reimbursed for parking expenses incurred at or near their work location or a location from which they continue their commute to work by car pool, van- pool or mass transit. Out-of-pocket parking fees for parking meters, garages and lots qualify. Parking at or
near your home is not an eligible expense.
 

Can employees use their commuter account for commuting expenses like tolls and gas?

No. Benefits may not be used for tolls, gas, mileage or other personal commuting expenses.

Is there a limit to how much I can contribute or spend each month?

Yes. Monthly limits are set by the IRS. Currently, contributions as well as monthly spending for transit and van-pooling are limited to $265 per month. Parking contributions as well as monthly spending are limited to $265 per month. Any monthly expenses above these limits cannot be exempt from taxes and cannot be applied to future months.

How does an employee access their commuter account to pay for mass transit and parking expenses?

They can use their OCA Debit Card to pay for commuting expenses, or vouchers can be used to pay for transit tickets, passes, or to pay parking vendors.

Still have questions?

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NJ Passes Commuter Benefit Law

 

This new ordinance would require employers with more than 20 employees to offer commuter benefits. OCA is offering reduced admin fees through December 31st, 2019. If signed up by December 31st, 2019 clients will receive our special pricing of just $1.50 per enrolled per month! Avoid the headaches and potential penalties! Sign up today.