United States: New Transit Benefit Requirements For D.C. And New York Employers Effective January 1, 2016

Two new laws require employers in Washington, D.C. (D.C.) and New York City (NYC) to offer pre-tax transit benefits, effective on January 1, 2016. Employers with employees in these cities must take action quickly to ensure compliance with the new requirements.


Under D.C. law (D.C. Transit Ordinance, D.C. Law 20-142), by January 1, 2016, employers with 20 or more employees in Washington, D.C., (including nonprofits) must provide at least one of the following benefits to employees:

  • A transportation fringe benefits program allowing employees to make pre-tax deductions for commuter highway vehicle, transit or bicycling costs, consistent with section 132(f)(1)(A), (B), and (D) of the Internal Revenue Code (Code), with benefit levels at least equal to the maximum gross income deduction allowed for such programs under Code Section 132(f)(2);
  • An employer-paid benefit program in which the employer provides a transit pass for a public transit system requested by each covered employee, or reimbursement of vanpool or bicycling costs that are at least equal to the purchase price of a transit pass for an equivalent trip on a public transit system; or
  • Employer-provided transportation at no cost to the covered employee in a vanpool or bus operated by or for the employer.

Although the law currently only applies to employers with 20 or more employees in Washington, D.C.; under the terms of the law the mayor of D.C. may, through a future rulemaking, require employers with less than 20 employees to provide such benefits. This less than 20 employee requirement will not go into effect until January 1, 2017, if at all. For purposes of this law, an 'employer' is defined as "any individual, partnership, association, corporation, business trust, or any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee" (excluding the United States and the District of Columbia as employers), and an 'employee' is any individual employed by an employer (excluding certain volunteers, babysitters and lay persons elected or appointed to office in a religious organization). Thus, an individual who is employed by any such employer in Washington, D.C., must receive one of the specified benefits, even if the individual does not reside in D.C.

Employers failing to offer at least one of the specified benefit programs will be subject to civil fines and penalties under the D.C. Department of Consumer and Regulatory Affairs Civil Infractions Act.


Under NYC law (NYC Transit Ordinance, Local Law 53), New York City employers (including nonprofits) with 20 or more full-time employees (this includes employers within the five boroughs of NYC) must offer those full-time employees the opportunity to use pre-tax earnings to buy qualified transportation fringe benefits (other than qualified parking), in accordance with federal law. Under federal law, a qualified transportation fringe benefit includes vanpooling/commuter highway transportation, transit passes and bicycle commuting reimbursement.

Under the terms of the law, full-time employees are those working 30 hours or more per week for the employer. If an employer's number of full-time employees drops below 20, any employee who was eligible to purchase pre-tax qualified transportation fringe benefits under this requirement prior to the reduction must continue to have such an opportunity for the entirety of that employee's employment.

The new requirement is effective January 1, 2016, but employers will not be subject to penalties for violations occurring before July 1, 2016. An employer who fails to comply with this requirement has 90 days to cure the first violation before a penalty is imposed. After 90 days, the employer is subject to a fine of not less than $100 and not more than $250 for the first violation, and every subsequent 30-day period in which the employer fails to offer the required benefit constitutes an additional violation. Each additional violation results in a $250 penalty. A penalty will not be imposed on an individual employer more than once in any 30-day period.

This requirement does not apply to the federal government, New York state government or the city of New York government as employers; where a collective bargaining agreement exists between employers and employees, except where 20 or more full-time employees are not covered by the agreement (in which case all such employees must be offered the pre-tax transportation benefits option); or to employers who are not required to pay federal, state and city payroll taxes. In addition, this requirement can be waived if an employer demonstrates that offering the benefit would be a financial hardship for the employer.

Proposed rules provide clarification on the new requirement, including the following:

  • The required benefit need not be offered to full-time employees who work remotely and do not commute to a physical office or work site in NYC.
  • An employer's number of full-time employees is determined by calculating the average number of full-time employees for the most recent consecutive three-month period (or the number of full-time employees per week for the period of time in which the employer has been in operation, if less than three months), counting the full-time employees at all of the employer's NYC locations.
  • A full-time employee for purposes of the requirement is an 'employee,' 'manual worker,' 'railroad worker,' 'commission salesman,' and 'clerical or other worker' (as those terms are defined in New York State Labor Law) who has worked an average of 30 hours or more per week in the most recent four weeks, any portion of which was in NYC, for a single employer. An individual need not reside in NYC to be an employee for this purpose.
  • The required benefit must be offered by the later of January 1, 2016, and four weeks after the full-time employee begins employment with the employer.
  • Employers must retain, for two years, records that are sufficient to demonstrate that (1) each eligible full-time employee was offered the opportunity to use pre-tax earnings to buy qualified transportation fringe benefits as required under the law, and (2) whether the employee accepted or declined the offer (a form is available to document compliance).
  • Instead of offering the opportunity to purchase pre-tax transportation fringe benefits, an employer may provide (at the employer's expense) a transit pass or similar form of payment for transportation on public or privately owned mass transit to commute to or from a workplace or work location in NYC. If the employer-provided transit pass or similar form of payment is less than the maximum qualified transportation fringe benefit allowed under federal law, then the employer must offer employees the opportunity to make up the difference in pre-tax payroll deductions.

Next Steps for Employers

In light of these new laws, employers need to determine whether their current transit benefit programs, if any, comply with the new D.C. and NYC requirements, and update these benefits as necessary, effective by January 1, 2016. In addition, employers, who are subject to the new requirements and do not currently offer any transportation benefit programs, need to establish such programs in compliance with the new laws, effective by January 1, 2016.

New Transit Benefit Requirements For D.C. And New York Employers Effective January 1, 2016

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Seyfarth Shaw LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Seyfarth Shaw LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions