Philadelphia Adds Commuter Benefit Requirement

On June 22, 2022, Philadelphia Mayor Jim Kenney, signed the Employee Commuter Transit Benefit ordinance. The ordinance takes effect on December 31, 2022, and requires employers with 50 or more covered employees to provide commuter transit benefits for their workers.

The law defines a covered employee as one who works at least 30 hours per week for compensation within the geographic boundaries of Philadelphia for the same employer within the previous 12 months. Unpaid interns, volunteers, and those working in unpaid apprenticeships are not considered covered employees. If an employer isn’t headquartered in the city, the law still applies to them if they have 50 or more covered employees working in Philadelphia. Government employers are not included.

Employers with 50 or more covered employees must make at least one of the following commuter transit benefit programs available:

  • Election of a pre-tax, payroll deduction for a fare instrument (pass, token or fare card) or transportation in a commuter highway vehicle or a qualified bicycle expense; or
  • An employer-paid benefit whereby the employer supplies a pass, token or fare card for a covered employee’s mass transit expense; or
  • Any combination of the two.

These programs must offer amounts at least equal to the maximum amount that may be deducted for such programs pursuant to the Internal Revenue Code (for 2022 the maximum is $280).

Regarding the Qualified Bicycle Expenses, for years 2018 through 2025, cyclists are not permitted to exclude qualified bicycle commuting reimbursements from their income for federal income tax purposes. However, employers are permitted to deduct these reimbursements as a business expense for years 2018 through 2025 for federal income tax purposes.

Additional guidance regarding implementation is expected prior to the December 31 effective date.

A copy of the law is located here

Other areas that have similar requirements: New Jersey, Seattle, New York City and Washington, D.C., Berkeley & Richmond, CA, San Francisco Bay Area.