Overview: New Jersey has enacted legislation (Senate Bill 1567) that will require employers with 20 or more employees to offer employees the opportunity to use pre-tax income to purchase qualified commuter benefits.
Effective Date: February 29, 2020 or the effective date of rules and regulations adopted by the state, whichever occurs first
Senate Bill 1567 is based on federal rules that authorize pre-tax commuter programs. Under these rules, employers may allow employees to allocate up to $265 per month (this limit is adjusted annually) of pre-tax income for:
· Rides in a commuter vanpool (seats six or more adults not including the driver) between the employee's home and workplace.
· A mass transit pass (such as, bus, light rail, or ferry)
Federal rules also authorize pre-tax parking benefits.
Some state and local jurisdictions have begun requiring certain employers to offer such programs.
Senate Bill 1567:
Employers with 20 or more employees must offer employees the opportunity to use a pre-tax transportation fringe benefit that provides commuter highway vehicle and transit benefits in accordance with federal rules.
The law directs the Commissioner of Labor and Workforce Development to develop rules and regulations for this requirement.
Note: Employers covered by a collective bargaining agreement are exempt from the requirement.
Action Required: Covered employers should ensure compliance with Senate Bill 1567 and watch for rules and regulations published by the state.
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