EMPLOYMENT & LABOR LAW NEWS
Special Alert - November 2015
 

New Law Mandates Pre-tax Transit Benefits
for NYC Employers

By: Mitchell Boyarsky

New York City once again may have increased the cost of doing business for employers located in the City. Effective January 1, 2016, employers with 20 or more employees must offer pre-tax transit benefits to its employees. Employees who work 30 hours or more on average are eligible to participate -- even if the average number of hours they later work declines. Employers who already offer transit benefit programs that comply with the Internal Revenue Code (IRC) need not make any changes to their programs. However, if a covered employer in NYC currently does not offer a program that provides tax-free transit benefits, or its program is not compliant with the IRC, now is the time to get prepared for the new law's effect.

The NYC law exempts certain governmental entities. Employers who are a party to a collective bargaining agreement are exempt except where the number of full-time employees not covered by the agreement is 20 or more. Some other limited exceptions exist.

The NYC law provides for monetary penalties for non-compliance. It also provides an employer 90 days to cure a first violation assessed against the employer.

Finally, if IRC changes occur regarding the existence or limits of a tax-free transit program in the future, the NYC statute will follow the IRC.

Employers doing business in New York City should review their policies for compliance. For additional information, please contact your Gibbons attorney or a member of the Gibbons Employment & Labor Law Department.

 
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