#Commuter Benefits

Commuter benefits now required in Philadelphia

January 03, 2023

The City of Philadelphia has just made it easier for you to get to work! A recently released ordinance states that Philadelphia employers are now mandated to offer a commuter benefits program to you, the employee.

A new chapter has been added to the Title 9 of The Philadelphia Code entitled “Employee Commuter Transit Benefit Programs.” This chapter requires employers (who employ 50 or more “covered” employees) to offer a commuter benefits program that helps you cover the cost of taking mass transit to and from work.

They define “covered” employee in the following way:

  • You work a minimum of 30 hours per week and have done so for 12 months at the same company.
  • You are not government employee, unpaid intern, volunteer, or unpaid apprentice.

There are several ways your employer can go about implementing your new mandated commuter benefits program.

  • They can implement a mass transit fringe benefit plan compliant with Internal Revenue Code Section 132(f), or
  • They can offer an employer-paid fare instrument equal to, or greater than, the IRS maximum non-taxable amount of $300, or
  • A combo of both, and
  • They are also required to offer employees who regularly use a bicycle to commute to and from work, a tax-free reimbursement up to $20 per month (or the current amount specified by IRS Section 132(f))

The IRS allows you, the employee, to dedicate up to $300 of each month’s wages (pre-tax) to take SEPTA (Southeastern Pennsylvania Transportation Authority) buses, trolleys, subways, and trains to work.

The catch is this: Your employer must allow you to do this. Philadelphia simply told your employer “You have to allow your employees to claim this benefit” – which is great news for you. Not only does it allow you to dedicate up to $300 each month toward any form of public transportation available in your city, but it also reduces the amount of income tax you have to pay (up to $700, or more, in savings annually).

The ordinance also states that your employer could choose to pay for your SEPTA monthly transportation passes straight out of their pocket or give you more money (above the $300 you can allot) each month to help you get to work.

What happens if you don’t comply?

Failure to comply with the new Philadelphia ordinance could result in a company paying $100 to $300 fine each day. That could add up to almost $10k in fines in a month.

Edenred can help

The good news is running a commuter benefits program is Edenred’s area of expertise.

We are the leading commuter benefits provider in the U.S. and represent 10,000 employees and 10 million employees just like you. Which means, we know how to implement a seamless and compliant commuter benefits program.

Our goal is to make it easy for employees like yourself to use public transportation to get to and from work – which is great for the planet and for your stress levels (no one likes traffic).

We’d love to help your business set up their new Philadelphia mandated commuter benefits program. Schedule a meeting with us today!

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