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Illinois Employers Required to Offer Commuter Benefits In 2024

08 Nov


Update Applicable to:

All Employers and multi-state employers with at least 50 full time employees in the six-county Chicago area.

What happened?

The Transportation Benefits Program Act, enacted on July 28, 2023, makes Illinois one of the only U.S. jurisdictions to mandate employee transportation benefits.

What do employers need to do?

Employers must review the employee count requirements to determine if they are subject to this law. Covered employers will need to prepare to implement their plans for offering the newly required benefits by January 1, 2024, and those operating in any of the covered locations should confirm whether they have such an offering. Employers should review the resources provided below, as well as consult their employment attorney regarding how to best implement the new requirement to comply with the law.

What are the details?

Beginning January 1, 2024, the act applies to employers with at least 50 full-time employees working in certain geographic areas at an address that is within one mile of a fixed-route transit service that offer a public transit system operated by the Regional Transportation Authority. Employers will have to provide their full-time employees with pre-tax public transit benefits starting January 1, 2024, which means that employers must allow covered employees to use pre-tax dollars for the purchase of a transit pass (that allows the employee to take public transit) through payroll deduction. This will also apply if their employee is allowed to receive said benefits (i.e., via CBA or because an employer wanted to grant said benefit). Read the bill for a full list of locations impacted.

The transit benefit must comply with federal rules for qualified transportation fringe benefits. A transit pass is any pass, token, care card, and the like entitling the employee to take public transit. Participating transit programs may include those offered by the Chicago Transit Authority (CTA) or the Regional Transportation Authority.

To qualify for the benefit, an employee must average at least 35 hours of work per week and for newly hired, the benefit begins on the first full pay period after 120 days of employment.

For more information, please see the links below:

Law Firm Articles: Article 1, Article 2, Article 3

Illinois Bill: Transportation Benefits Program Act

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This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

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