New Jersey’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.
A pre-tax transportation fringe benefit is a benefit that allows an employee to set aside wages on a pre-tax basis, which is then only made available to the employee for the purchase of certain eligible transportation services, including transit passes and commuter highway vehicle travel.
An "employee" is defined anyone hired or employed by the employer and who reports to the employer's work location (this follows the definition under New Jersey’s unemployment compensation law).
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.
New Jersey employers should begin thinking about the steps they will need to take to provide this benefit. Areas for consideration include the specific features of the pre-tax transportation fringe benefit program and developing a document to communicate the program to employees.
Contact your Univest Insurance Benefits Consultant for guidance.
Additional articles from the October 2019 edition of the Univest Employee Benefits Newsletter:
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