Effective March 1, 2020, employers in New Jersey will be required to offer employees commuter benefits, becoming the first state to mandate this benefit for its workers. If your employer fails to offer pre-tax commuter benefits to you and your fellow employees, you may have a valid claim to enforce your rights as a New Jersey employee. You need an experienced employment attorney to evaluate the circumstances of your employment to determine if your employer is compliant with the new law.
What is a Commuter Benefit?
Commuter benefits, otherwise known as a qualified transportation fringe benefit, is a pre-tax set aside of wages up to a certain level, to utilize for certain transportation costs. An employee can set aside wages on a pre-tax basis, which is only available to employees for the express purpose of eligible transportation services. Under the federal IRS rules, transportation costs that qualify as commuter benefits includes, transportation in a commuter highway vehicle, transit passes, and qualified parking. Federal law allows for set asides of $265 per month for parking and mass transit for 2019. The New Jersey law requires that employers offer the maximum allowable benefit levels to employees for commuter set asides.
Who Qualifies for Commuter Benefits Under the Law?
Under the New Jersey law, employers with 20 or more workers will be required as of March 1, 2020 to offer pre-tax transportation fringe benefits to employees. An employee is defined as anyone hired or employed by the employer who reports to the employer’s work location. Employees covered by a collective bargaining agreement qualify after March 1, 2020, at the expiration of their existing agreement.
However, it is important to note that the new law does not apply to small businesses that employ fewer than 20 people. It also does not apply to employees that are currently covered by a collective bargaining agreement, even if more than 20 employees work for an employer, until the agreement expires. Finally, the New Jersey law does not apply to federal employees who work in the state, although it does appear to apply to state, local, and nonprofit employees in New Jersey.
Failure to Comply With the Law
Employers that fail to offer commuter benefits to qualified employees after March 1 are subject to fines and penalties under the new law. For a first offense, an employer is fined between $100 and $250; however, the employer has 90 days to correct the violation before the penalty is imposed. If the employer still fails to implement the commuter benefit for employees, an additional fine of $250 will be imposed every subsequent 30 days.
Talk to Our Office Now
The new commuter benefits could have significant effects on employees’ overall expenses and income taxes. If you believe that your employer is required to offer commuter benefits and fails to do so, contact us today to schedule a free evaluation of your claims.