What's happening
This bill requires large employers to provide transportation benefits like pre-tax transit programs and updates related tax provisions.
Why it matters
Expands commuter benefits to more workers. By defining “covered employees” as anyone working an average of 10+ hours per week and “covered employers” as businesses with 20+ workers (including temps and part-timers), the bill ensures a broad range of employees gain access to transportation benefits—not just full-time staff.
Mandates flexibility for employers. Employers must offer at least one of three transportation benefit options: a pre-tax deduction for transit/vanpool costs, direct provision or reimbursement for transit passes/vanpools, or employer-operated van/bus services. This flexibility allows businesses to choose the approach that best fits their workforce and operational capacity.
Provides enforcement and support mechanisms. The bill establishes municipal oversight, including rulemaking, education, and advice programs to help employers comply. It also sets out a graduated penalty structure for non-compliance, with collected fines funding further enforcement and education efforts.
Aligns state tax law with federal benefits (and safeguards value for workers). The tax code amendment ensures that, even if federal law changes, New York workers can still exclude a set amount of transportation benefits from state income tax—protecting workers’ take-home pay and ensuring the benefit’s value doesn’t erode due to federal policy shifts.
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Require Transit Benefits for Workers
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to labor
- Referred to labor
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Require Transit Benefits for Workers
In Assembly Committee · Labor · Sponsor Robert J. Rodriguez
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
90
2017-2018 Regular Sessions
IN SENATE (Prefiled)
January 4, 2017
Introduced by Sen. HOYLMAN -- read twice and ordered printed, and when printed to be committed to the Committee on Labor
AN ACT to amend the labor law and the tax law, in relation to establishing a qualified transportation fringe benefits program
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The labor law is amended by adding a new article 33 to read as follows:
ARTICLE 33
TRANSPORTATION BENEFITS PROGRAM Section 960. Definitions.
961. Transportation benefits program.
962. Administration and enforcement.
963. Severability.
§ 960. Definitions. As used in this article, the following terms shall have the following meanings:
1. "Covered employee" shall mean any person who performed an average of at least ten hours of work per week for compensation for the same employer within the previous calendar month.
2. "Covered employer" shall mean an employer for which an average of twenty or more persons per week perform work for compensation. In determining the number of persons performing work for an employer during a given week, all persons performing work for compensation on a full-time, part-time or temporary basis shall be counted, including persons made available to work through the services of a temporary services or staffing agency or similar entity. A covered employer shall not include any governmental entity.
3. "Transit pass" shall mean any pass, token, fare card, voucher or similar item entitling a person to transportation on public transit within the meaning of subclause (A) of clause five of paragraph (f) of
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04718-01-7
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section one hundred thirty-two of title twenty-six of the United States code.
4. "Vanpool" shall mean a commuter highway vehicle within the meaning of subclause (B) of clause five of paragraph (f) of section one hundred thirty-two of title twenty-six of the United States code.
§ 961. Transportation benefits program. All covered employers shall provide at least one of the following transportation benefit programs to covered employees:
1. a pre-tax election program, consistent with paragraph (f) of section one hundred thirty-two of title twenty-six of the United States code, allowing employees to elect to exclude from taxable wages and compensation, employee commuting costs incurred for transit passes or vanpool charges, excluding parking, up to the maximum level allowed pursuant to clause two of paragraph (f) of section one hundred thirtytwo of title twenty-six of the United States code;
2. an employer paid benefit program whereby the employer supplies a transit pass for a public transit system of the employer's choosing upon request by each covered employee or reimbursement for equivalent vanpool charges equal in value to the purchase price of the appropriate benefit; or
3. employer provided transit furnished by the employer at no cost to the covered employee in a vanpool or bus, or similar multi-passenger vehicle operated by or for the employer.
§ 962. Administration and enforcement. 1. The duly authorized officer having predominant jurisdiction over transportation issues in the municipality in which a transportation benefits program is administered shall promulgate such rules and regulations as necessary to implement the provisions of this article. Such rules and regulations shall, to the extent consistent with this article, conform to internal revenue service regulations under paragraph (f) of section one hundred thirty-two of title twenty-six of the United States code.
2. Such officer shall maintain an education and advice program to assist covered employers with meeting the requirements of section nine hundred sixty-one of this article.
3. Any covered employer who fails to offer at least one transportation benefit program to covered employees, in the manner required by section nine hundred sixty-one of this article, shall be liable to the municipality in which such program is administered for a civil penalty not to exceed one hundred dollars for the first violation, two hundred dollars for the second violation within the same year, and five hundred dollars for each additional violation within the same year. Penalties collected under this subdivision shall be used to fund implementation and enforcement of such program.
§ 963. Severability. If any provision of this article shall be adjudged to be unconstitutional or invalid, such judgment shall not affect, impair or invalidate the remainder thereof, but shall be confined in its operation to the provision directly involved in the controversy in which such judgment shall have been rendered.
§ 2. Subsection (c) of section 612 of the tax law is amended by adding a new paragraph 42 to read as follows:
(42) For taxable years beginning after December thirty-first, two thousand eighteen the amount of qualified transportation fringe benefits included in federal adjusted gross income, to the extent that such qualified transportation fringe benefits would have been excluded from gross income pursuant to paragraph five of subsection (a) of section one hundred thirty-two of the internal revenue code had the flush sentence
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of paragraph two of subsection (f) of section one hundred thirty-two of the internal revenue code that was in effect on December thirty-first, two thousand eighteen continued in effect after December thirty-first, two thousand seventeen; provided, however, that if subparagraph (A) of paragraph two of subsection (f) of section one hundred thirty-two of the internal revenue code is amended so that for any month the dollar amount in effect under such subparagraph (A) is greater than the dollar amount in effect under subparagraph (B) of paragraph two of subsection (f) of section one hundred thirty-two of the internal revenue code for the same month, the flush sentence of paragraph two that was in effect on December thirty-first, two thousand eighteen shall be deemed to provide that the dollar amount in effect for subparagraph (B) shall be applied as if the dollar amount therein were the same as the dollar amount in effect for such month under subparagraph (A). Notwithstanding the foregoing, if, pursuant to this paragraph, the amount that would be in effect for any month under subparagraph (A) or (B) of paragraph two of subsection (f) of section one hundred thirty-two of the internal revenue code is less than one hundred seventy-five dollars, subparagraphs (A) and (B) shall be applied as if the dollar amount in effect for such month under such subparagraphs was one hundred seventy-five dollars.
§ 3. This act shall take effect immediately, provided, however, that section one of this act shall take effect on the one hundred twentieth day after it shall have become a law; provided, further, that effective immediately, the addition, amendment and/or repeal of any rule or regulation necessary for the implementation of section one of this act on its effective date is authorized and directed to be made and completed on or before such effective date; provided, further, that section two of this act shall apply to taxable years beginning on and after January 1, 2019.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the labor law and the tax law, in relation to establishing a qualified transportation fringe benefits program
Purpose or general idea of bill
The purpose of this bill is to protect employees from losing their state monthly commuter tax benefits due to Congressional inaction and to require qualifying employers to offer employees an option to participate in the commuter tax benefit program.
Summary of specific provisions
Section 1 Amends the New York state transportation law by adding a new Article 33.
Section 2 amends subsection (c) of section 612 of the tax law by adding a new paragraph 44.
Section 3 establishes the effective date.
Justification
Federal law authorizes employees of qualifying employers to take advantage of a commuter benefit program, and New York mirrors that benefit program. The benefit program allows employees to set aside part of their pre-tax wages to pay costs of commuting to work on public transit. In some cases, the pre-tax transportation set-aside can save employees up to 40 percent of annual commuting costs. Employers also save money by reducing pay-roll tax liability. Encouraging commuters to take public transit is also important policy to help decongest urban roads and preserve the environment.
Despite these advantages, the commuter benefit program suffers from two important legislative problems. First, the federal program requires Congress to annually reauthorize increases to the maximum transit benefit, something it has failed to do in recent years. Because the state's program mirrors the federal program, commuters have taken a significant hit to both their state and federal pre-tax benefits during years when Congress fails to act. Secondly, although many qualifying employers offer the benefit program, others do not. Therefore many employees who would both qualify for and benefit from the program cannot even participate.
This bill requires qualifying employers in the state to offer the commuter benefit program to their employees so that all qualifying employees can take advantage. The bill also protects commuters from losing their state monthly pre-tax benefits because of Congresses inaction. Overall, this bill represents an important step in making sure that commuter benefit program reliably reaches all who can participate.
Prior legislative history
S.5257-A of 2015-2016 (Hoylman): Died in Labor
Fiscal implications
None to the state.
Effective date
This act shall take effect immediately, provided, however, that section one of this act shall take effect on the one hundred twentieth day after it shall have become a law; provided, further, that section two of this act shall apply to taxable years beginning on and after January 1, 2019.
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