Requires certain employers shall establish qualified transportation fringe benefit programs for employees

6 Co-sponsors

• Ruben Diaz
• Martin Malavé Dilan
• Liz Krueger
• John L. Sampson
• Malcolm A. Smith
• Toby Ann Stavisky

BILL NUMBER:S535

Title of bill

An act to amend the labor law, in relation to requiring certain employers offer a qualified transportation fringe benefit program for employees

Purpose

Requires certain employers shall establish qualified transportation fringe benefit programs for employees.

Summary of provisions

Amends the labor law by adding a new article 32, entitled the Employee Transportation Expenses Act, which requires that employers with 50 or more employees, not including public employers, offer their employees the opportunity to pay qualified commuting costs through their employer out of pre-tax income, in accordance with section 132 of the internal revenue code.

Justification

Since 2002, federal tax law has allowed employees to set aside up to $100 per month of their gross income through their employer to pay qualified mass transit or vanpool commuting costs. The employee can save up to $400 annually because the amount set aside is not subject to federal or state income taxes. The employer saves money because any employee gross income set aside under the program is also exempt from payroll taxation.

Employers also have the option of paying their employees up to $100 per month in transportation benefits to cover qualified mass transit or vanpool commuting costs. Under this option, the employee still receives tax-free income and the employer gets both a tax deduction and a possible reduction in payroll taxes if the transportation benefit is used to offset other wages. In either case, an employee is always free to choose whether or not to participate.

By requiring large employers to offer this program, this bill will encourage the use of mass transit. For those employees who already commute to work using mass transit, it will offer significant tax savings. Participating employers will also reduce their tax burden.

Legislative history

2004 A.8916 - Referred to Labor 2006 S.4431 - Referred to Labor 2008 S.2236 - Referred to Labor 2009 S.1858 - Referred to Labor

Fiscal implications

None to the state.

Effective date

This act shall take effect on the one hundred eightieth day after it shall have become a law.