TRANSIT BENEFITS
TRANSIT BENEFITS:
IT’S NOW THE L AW IN NE W JERSE Y
BY: JOE MADERA
O
n March 1, 2019, Governor
Phil Murphy signed into law
the NJ Transit Benefits Law
(Law). This new law will allow
employees to set aside pretax
dollars for certain work-related commuting
expenses.
Under the Law, every employer subject to
New Jersey’s unemployment compensation
law that employs at least 20 employees
is required to offer Transit Benefits to all
employees who are not currently covered by
a collective bargaining agreement.
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At this time, there is no requirement to
offer Transit Benefits for employers with
fewer than 20 employees, including union-
represented employees.
Employers with 20 or more employees that
have union-represented employees are
required to offer Transit Benefits to their
union-represented employees once their
collective bargaining agreements that were
in effect on March 1, 2019, expire. As a
result, Transit Benefits should be included
in the negotiation of any new or renewal
collective bargaining agreement that takes
effect after March 1, 2019.
WHAT TRANSIT BENEFITS MUST EMPLOYERS
OFFER?
Under the Law, employers must provide
pretax election transportation fringe
benefits (Transit Benefits) for work-related
commuting expenses. The qualified
expenses include three items: (1) commuter
highway vehicle benefits (“van-pooling”), (2)
transit passes, and (3) qualified parking.
The Law also requires that the Transit
Benefits be provided “at the maximum
benefit levels” allowable under federal law,
and for the benefits to be excluded from