Mayor De Blasio Signs
The Affordable Transit Act
Effective January 1, 2016, the "Act" requires private New York City employers to offer full-time employees pre-tax public transportation benefits.
On October 20, 2014, New York City Mayor Bill De Blasio signed into law the Affordable Transit Act (the "Act") to encourage the use and address cost concerns of public transportation. The Act applies to private employers with 20 or more full-time employees. Full-time employees are defined as those that work an average of 30 or more hours per week. The Act allows employees to set aside up to $130 pre-tax dollars per month for public transportation costs (this amount is in-line with federal tax guidelines).
Employers are exempt from the Act when:
- A collective bargaining agreement covers the relevant employees;
- An employer is not subject to federal, state, and city payroll taxes; or
- The Department of Consumer Affairs determines that there is a financial hardship and waives the requirement.
While the effective date of the Act is January 1, 2016, employers have a 60 day grace period to comply and no penalties will be imposed prior to July 1, 2016.
- First time violations will be subject to a civil penalty of $100-$250. However, employers will have 90 days to rectify initial violations before imposition of the fine.
- Every 30 day period after the initial violation is deemed a subsequent violation subject to a $250 penalty per 30 day period.
What Should Employers Do?
We recommend that New York City employers work with their
payroll and/or benefits vendors to modify thier systems to accommodate
pre-tax transit benefits and ensure IRS compliance.
Please contact Katherin Nukk-Freeman or the
NFC attorney with whom you normally work for assistance.
Nukk-Freeman & Cerra, P.C. is a dynamic Employment Law Firm
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Any tax advice included in this written or electronic communication is not intended or written to be used, and it cannot be used by the taxpayer, for the purpose of avoiding any penalties that may be imposed on the taxpayer or any governmental taxing authority or agency.