Philadelphia Passes Commuter Transit Benefit Requirement

Philadelphia has passed an ordinance requiring covered employers to provide covered employees a mass transit and bicycle commuter benefit program, effective Dec. 31, 2022.

Covered Employers

Private employers are covered if they employ 50 or more covered employees for compensation. The law does not apply to government employers.

Covered Employees

The ordinance covers workers who performed an average of at least 30 hours of compensated work per week in Philadelphia, for the same employer, in the previous 12 months.

Commuter Transit Benefit

Covered employers must offer covered employees one or a combination of:

• A pre-tax payroll deduction for mass transit expense or qualified bicycle expenses, consistent with the IRS Code and at benefit levels at least equal to the maximum amount deductible for such programs under the Code; or

• An employer-paid benefit supplying a fare instrument (public transit pass, token, fare card or similar) for employees’ mass transit expenses, at benefit levels at least equal to the maximum amount that may be deducted for such programs pursuant to § 132(f)(2) of the Code.

“Mass transit expense” means expense incurred for a fare instrument or transportation in a commuter highway vehicle as defined in § 132(f)(5)(B) of the Code. “Qualified bicycle expense” means reasonable expenses of employees who regularly use a bicycle to commute, including the purchase, maintenance, repair and storage expenses related to bicycle commuting, as allowed under §§ 132(f)(1)(D) and (f)(5)(F) of the Code.

Employer Guidance

The City of Philadelphia will make compliance information and guidance materials available to covered employers.

Penalties

Employer violations are subject to fines.