If you own a business in New Jersey, you need to start offering a commuter benefits program if you employ a certain amount of employees.
Businesses that are not in compliance with the New Jersey commuter benefits law that went into effect on March 1 2020 can be fined.
Here’s a primer on New Jersey’s Commuter Benefit Ordinance with the insight you need to comply. We also have a toolkit for businesses available here.
What are commuter benefits?
Commuter benefits are pre-tax transportation fringe benefits that allow employees to save money in their paychecks tax-free for use on transportation in their commutes.
What transportation does the New Jersey ordinance cover?
New Jersey’s ordinance covers several different types of transportation, including:
● Light Rail
● Water Taxi
What businesses must offer commuter benefits in New Jersey?
The New Jersey Commuter Benefit Ordinance applies to all companies that employ at least 20 or more employees. Eligible employees must work an average of 10 hours or more per week.
Are there any exemptions?
Yes, tax-exempt organizations and government entities do not have to offer a commuter benefits program.
How does a business create a program?
You can create a program and run it in-house, or you can hire a third-party provider like us at Edenred Commuter Benefits to run it for you.
If you manage the program in-house, you must perform all the administrative tasks like community with employees, maintain detailed records for audits and set up and fund the method of delivery for the benefits.
If you work with us, you get to partner with an experienced commuter benefits provider who will guide you through every step of the process, so you comply with New Jersey’s mandate.
What happens if I am not in compliance?
The penalty for failing to comply is a fine of $250 per month per company. You have 90 days to fix violations so you can avoid the penalty.
Does the employer save any money?
Yes, employees are not the only ones who get to save. Employers will save about $41 per employee for each month they are in the program. So if you have 50 employees in the program, you can save about $24,000 annually. The savings come because your payroll tax decreases as your employers save money for their commuter benefits.
Edenred Commuter Benefit Solutions serves more than 12,000 employers representing over 9 million employees for commuter benefits programs across the country. We also maintain partnerships with over 50 national third-party administrators, more than 350 transit agencies, and over 5,000 parking locations.
If you want to learn more about the New Jersey Commuter Benefit Ordinance, download the Toolkit below: