Legal Blog

Philadelphia Commuter Benefits Ordinance

Last week, Philadelphia’s City Council passed a new ordinance requiring employers to provide employees with the opportunity for pre-tax commuter benefits. The bill is now awaiting Mayor Kenney’s signature and once signed, shall go into effect on December 31, 2022.

Who is Covered?

Covered Employers are defined as individuals, partnerships, corporations, or other entities that employ fifty (50) or more Covered Employees, excluding government employees. Covered Employees are those individuals performing an average of thirty (30) hours of work per week within the geographic boundaries of Philadelphia. Note this is unlike many of the Philadelphia ordinances, which do not specify that the number of employees to meet the threshold have to be “Covered Employees.” Meaning, if a business does not have 50+ employees who mainly work within Philadelphia, it is not covered.

What is Required?

Every covered employer must make available to its Covered Employees at least one of the following employee commuter transit benefit programs:

  • Election of pre-tax payroll deduction for Mass Transit Expenses or Qualified Bicycle Expense, consistent with the maximum amount that may be deducted under the Internal Revenue Code.
  • An employer-paid benefit whereby the employer supplied a Fare Instrument (i.e., a pass, token, SEPTA card, etc.) for the Covered Employees’ Mass Transit Expense, consistent with the maximum amount that may be deducted under the Internal Revenue Code; or
  • Any combination of the above programs.

A Mass Transit expense is one incurred for a public transportation token, pass, fare card, or the like, or vehicle-related expenses due to travel between an employee’s work and residence. A Qualified Bicycle Expense is reasonable expenses incurred for using a bicycle for commuting a bicycle to and from work.

Essentially, covered employers will be required to provide their Philadelphia employees with either employer-funded transportation costs, or pre-tax deductions from employee wages for the same.

When Does the Ordinance Become Effective?

December 31, 2022.

ABOUT KATHARINE BATISTA

kbatista@offitkurman.com | 267.338.1319

Ms. Batista is an employment & labor attorney who provides businesses with advice and risk mitigation strategies and zealous representation in litigation. She frequently represents businesses in the hospitality, financial services, automotive dealership, engineering and architecture and healthcare industries. Specifically, Ms. Batista successfully defends employers against claims of discrimination and harassment, retaliation, wrongful termination, and wage and hour violations. Ms. Batista also commonly represents her clients in actions involving employee mobility and trade secret theft. Employment and labor law is ever-changing. Employers need to feel secure in how they manage their employees so they can focus on their business. Ms. Batista affords her clients that security.

 

 

 

 

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