United States New York Commuter Benefits-Faqs
Total Page：16
File Type：pdf, Size：1020Kb
12/7/2020 commuter-benefits-FAQs Menu Search FAQs NYC’s Commuter Benefits Law took effect on January 1, 2016. Under the law, for-profit and nonprofit employers with 20 or more full-time non-union employees in New York City must offer their full-time employees the opportunity to use pre-tax income to purchase qualified transportation fringe benefits. The law is based on the Internal Revenue Code that authorizes pre-tax commuter programs, which benefit employers and employees. The Department of Consumer Affairs (DCA) enforces the law and coordinates the City’s public education and outreach campaign to help employers and employees know their responsibilities and rights when it comes to commuter benefits. THERE’S A BETTER WAY TO WORK with NYC’s Commuter Benefits Law. I. GENERAL QUESTIONS II. EMPLOYERS COVERED/NOT COVERED BY THE LAW III. DETERMINING NUMBER OF FULL-TIME EMPLOYEES IV. EMPLOYEES COVERED/NOT COVERED BY THE LAW V. TRANSIT COVERED/NOT COVERED BY THE LAW VI. SETTING UP A COMMUTER BENEFITS PROGRAM VII. EMPLOYER RECORDKEEPING VIII. NONCOMPLIANCE AND ENFORCEMENT IX. TAX QUESTIONS – EMPLOYERS, EMPLOYEES I. GENERAL QUESTIONS What are the advantages of a commuter benefits program? A commuter benefits program can provide savings for both employers and employees. Employers can save by reducing their payroll taxes. The more employees who sign up for transportation benefits, the more the employer can save. Employers can also attract and retain employees by offering transportation benefits. Employees can lower their monthly expenses by using pre-tax income to pay for their commute. Which employers must offer commuter benefits? Generally, non-government employers with 20 or more full-time non-union employees working in New York City must offer their full-time employees the opportunity to use pre-tax income to pay for their transportation by public or privately owned mass transit or in a commuter highway vehicle. https://www1.nyc.gov/site/dca/about/commuter-benefits-FAQs.page 1/16 12/7/2020 commuter-benefits-FAQs When do employers have to begin complying with the law? Employers must offer full-time employees the opportunity to use pre-tax income to purchase qualified transportation fringe benefits, other than qualified parking, by January 1, 2016 or four weeks after an employee begins full-time work, whichever is later. Will DCA enforce the law beginning January 1, 2016? The law provided employers with a six-month grace period—from January 1, 2016 until July 1, 2016— before DCA was authorized to seek penalties. As of July 1, 2016, employers will have an opportunity to cure (correct) any violation of the Commuter Benefits Law within 90 days before any penalty may be imposed. Are employers required to give their full-time employees a written offer of commuter benefits? Yes. Employers must give their full-time employees a written offer of the opportunity to use pre-tax income to purchase qualified transportation fringe benefits and maintain a record of the offer and employees’ responses. See VII. EMPLOYER RECORDKEEPING. [back to top] II. EMPLOYERS COVERED/NOT COVERED BY THE LAW Which employers are exempt under the law? The law does not apply to: Employers whose employees are covered by a collective bargaining agreement (CBA). Exception: If the employer has 20 or more full-time employees who are not covered by the CBA, the employer must offer these employees commuter benefits. United States, New York State, and New York City governments, including any office, department, independent agency, authority, institution, association, society, or other body of the state, including the legislature and the judiciary. Employers not required to pay federal, state, and City payroll taxes. Does the law apply to chain businesses? Yes. A chain business is a group of establishments that share a common owner or principal who owns a majority of each location and are engaged in the same business or operate under a franchise agreement with the same franchisor as defined in New York State General Business Law Section 681. The owner must count full-time employees at all of the chain business’ locations in New York City to determine the total number of full-time employees. Does the law apply to temporary help firms? Yes. A temporary help firm is a firm that recruits, hires, and supplies employees to perform work or services for another organization. A temporary help firm that supplies a full-time employee to another organization is the employer of the full-time employee for purposes of the law. https://www1.nyc.gov/site/dca/about/commuter-benefits-FAQs.page 2/16 12/7/2020 commuter-benefits-FAQs Temporary help firms that employ 20 or more full-time employees who are placed in New York City are required to offer those employees the opportunity to use pre-tax income to purchase qualified transportation fringe benefits, other than parking. Does an employer have to offer commuter benefits if its workforce is reduced to fewer than 20 full-time employees? An employer must allow the full-time employees who had been eligible to purchase commuter benefits before the workforce was reduced with the continued opportunity to use pre-tax income to purchase qualified transportation fringe benefits for the duration of their employment. [back to top] III. DETERMINING NUMBER OF FULL-TIME EMPLOYEES If an employer has full-time employees who work in a borough other than Manhattan, do the employees in the outer boroughs count toward the number of employees? Yes. The law applies to employers with 20 or more full-time employees working in New York City, which includes The Bronx, Brooklyn, Manhattan, Queens, and Staten Island. If an employer has multiple locations, do all full-time employees count toward the number of employees? Yes. If an employer has more than one location in New York City, the employer must count all full-time employees at all locations in New York City to determine the total number of full-time employees. Scenarios: An employer has two locations in New York City. The first location employs eight full-time employees. The second location employs 14 full-time employees. Would this employer be required to offer commuter benefits? Yes. The employer employs a total of 22 full-time employees at the two locations. The employer must provide commuter benefits to all of its full-time employees. An employer owns seven retail stores in New York City. Each location employs seven full- time employees. Would this employer be required to offer commuter benefits? Yes. The business employs a total of 49 full-time employees at the retail stores. The business must provide commuter benefits to all of its full-time employees. Can employers with fewer than 20 full-time employees working in New York City offer commuter benefits to their employees? Yes. DCA encourages all employers to offer commuter benefits to their employees because of the potential savings to businesses and employees. Does an employer with fewer than 20 full-time employees working in New York City but more than 20 full-time employees working outside of New York City have to offer commuter benefits? No. The law applies to employers with 20 or more full-time employees working in New York City only. https://www1.nyc.gov/site/dca/about/commuter-benefits-FAQs.page 3/16 12/7/2020 commuter-benefits-FAQs DCA encourages all employers to offer commuter benefits to their employees because of the potential savings to businesses and employees, however. Scenario: Ann’s Business employs 10 full-time employees and 10 part-time employees in New York City. Does Ann’s Business have to offer commuter benefits? No. Although Ann’s Business employs 20 employees, only 10 of those employees are full time. The law applies to employers with 20 or more full-time employees working in New York City only. [back to top] If an employer is part of a chain business, do all full-time employees count toward the number of employees? Yes. If an employer owns a majority of more than one establishment in the chain business in New York City, the employer must count all full-time employees at all locations in New York City to determine the total number of full-time employees. IV. EMPLOYEES COVERED/NOT COVERED BY THE LAW Which employees are covered under the law? Full-time employees of for-profit and nonprofit organizations that employ more than 20 full-time non- union employees in New York City are covered. Who is considered a full-time employee? A full-time employee is any employee who has worked an average of 30 hours or more per week in the most recent four weeks as of any date of counting, any portion of which was in New York City, for a single employer. An employee who meets this threshold remains entitled to the benefit even if the employee’s working hours are reduced. Does the law apply to employees working for a temporary help firm? Yes. If the employee works an average of 30 hours or more per week for a minimum of four weeks, any portion of which was in New York City, the temporary help firm must offer the opportunity to use pre-tax income to purchase qualified transportation fringe benefits if the temporary help firm has 20 or more full- time employees. To determine the number of hours worked each week, employers must add the number of hours worked by the employee in the most recent four weeks at all placements. Does the law apply to part-time employees? No. However, DCA encourages employers to provide commuter benefits to part-time, temporary, and seasonal employees. Are commuter benefits programs beneficial for all employees? Not necessarily.