Update Applicable to:
All employers with 50 or more employees in the city of Philadelphia.

What happened?
On June 9, 2022, the Philadelphia City Council passed an ordinance titled, “Employee Commuter Transit Benefit Programs,” which would require employers to make available to a commuter transit benefit program. The bill is currently awaiting the mayor’s signature.

What are the details?
Effective December 31, 2022, employers with 50 or more employees will be required to make available covered employees a commuter transit benefit program.

Employees will be qualified as covered employees if they have averaged working at least 30 hours per week in Philadelphia for the same employer in the previous 12-month period. Unpaid interns, volunteers, and those working in unpaid apprenticeships will not be considered covered employees.

Covered employees must be offered a pre-tax payroll deduction for mass transit expenses, qualified bicycle expenses, or an employer-paid benefit for a fare instrument. Covered employees must also be offered one of the following types of commuter transit benefits:

• An election of a pre-tax payroll deduction for Mass Transit Expenses (expenses incurred for either a Fare Instrument, such as a pass, token, or fare card, or expenses related to transportation in a Commuter Highway Vehicle) or Qualified Bicycle Expenses (which include reasonable expenses related to the purchase, maintenance, repair, and storage of bicycles regularly used for commuting to and from work), as allowed under the Internal Revenue Code §§ 132(f)(1)(D) and (f)(5)(F); or

• An employer-paid benefit whereby the covered employer supplies a Fare Instrument for a covered employee pursuant to Internal Revenue Code § 132(f)(2); or

• Any combination of the two.

To qualify as a Commuter Highway Vehicle, the vehicle must be used to transport groups of employees between their homes and work. This means that the vehicle must have a seating capacity of at least six people and at least three employees must be transported to work 80% of the time the vehicle is used (excluding the driver).

Covered employees alleging a violation of this new law can report their employer to the agency designated by the mayor to enforce these benefits. Upon receipt of the complaint, the enforcement agency will have 30 days to mediate the matter between the parties. Following this mediation period, a written warning will be issued to the employer if it is determined that the employer is non-compliant. If the employer remains non-compliant for 30 days following the issuance of the written warning, the enforcement agency may ask a court of competent jurisdiction to compel compliance and impose fines ranging from $150 to $300 per day, with each day constituting a separate violation.

For more information, please see the links below:

Employee Commuter Transit Benefit Programs

Article 1 – Article 2

What do employers need to do?
Employers should review the links provided above and should take appropriate measures to meet the new requirements if they do not already have a compliant transportation program in place.

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