As the modern workforce continues to adapt to evolving needs, many cities states across the United States have recognized the importance of commuter benefits for both employee wellbeing and the environment. These initiatives not only bolster employee satisfaction, but contribute to larger organizational (and cultural) goals around sustainability and congestion reduction, as well.
If you’re a business owner or HR professional navigating this landscape, understanding the commuter benefits mandates in your area can greatly enhance your benefits strategy. Here’s a look at 11 key locations (across 8 U.S. states) where commuter benefits are not just a perk, but a legal requirement.
8 areas with commuter benefits mandates
1. Washington, DC
Washington, DC’s law requires businesses with 20 or more employees to offer pre-tax transportation benefits, a mandate that has been in place since 2010. This initiative is part of a larger effort to promote public transit use and reduce congestion in the nation’s capital. The ease of accessing public transit options in DC makes this mandate practical and beneficial for both employees and employers alike.
2. California
A: San Francisco Bay Area
In the Bay Area, the Commuter Benefits Program was introduced in 2014, requiring employers with 50 or more employees to comply. This initiative encourages businesses to offer pre-tax commuter benefits, including transit passes and vanpool reimbursements. Given the area’s well-known traffic congestion, this program aims to alleviate daily commuting woes while supporting employees’ financial health.
B: Berkeley
Berkeley's TRACC Commuter Benefits Ordinance was implemented in 2018 and requires employers with 10 or more employees to provide pre-tax transit benefits. This initiative reinforces Berkeley’s environmental values and commitment to public transit, and it has already made a significant impact on commuting patterns in the community.
C: Richmond
Richmond, CA, has also established commuter benefits requirements with its 2018 ordinance. This mandate requires employers to offer pre-tax transit benefits similar to neighboring communities. With a diverse workforce relying on various transportation methods, this initiative functions as both a practical and a progressive approach to improving the commuting experience.
D: Los Angeles
L.A. enacted its commuter benefits mandate in 2020 and requires organizations with 50 or more full-time employees at a single worksite to offer commuter benefits programs. Employees can use these benefits for transit passes, transit vouchers, vanpool fees, and other qualified transportation expenses.
3. Chicago, IL and surrounding metro area
In the Windy City, Chicago’s Commuter Benefits Ordinance was enacted in 2015 and mandates that employers with 50 or more employees offer pre-tax transportation benefits for all full-time employees. The ordinance aims to encourage the use of public transit and reduce traffic congestion in the bustling metro area. With options that can include transit passes, vanpools and biking incentives, this initiative helps employees save money while also encouraging more eco-friendly commuting habits.
4. Seattle, WA
Seattle adopted Commuter Benefit Ordinance in 2020, requiring employers with 20 or more employees to provide pre-tax commuter benefits. The city is known for its robust public transit options, including buses, light rail and ferries. Additionally, the initiative reflects Seattle's commitment to supporting sustainable commuting practices in a rapidly growing urban environment.
5. New York City, NY
New York City stands out as a leader in commuter benefits initiatives. Under the Commuter Benefits Law, enacted in 2016, employers with 20 or more employees must offer pre-tax commuting benefits. This includes subway, bus and even ferry rides. In a city where public transportation is a staple of daily life, these benefits are especially significant in alleviating commuting costs for employees, making the daily grind a little less painful.
6. Hawaii
Hawaii's commuter benefits mandate went into effect in 2018, requiring employers with more than 20 employees to provide pre-tax transportation benefits. This mandate can include not only public transit, but also biking and carpooling incentives. This holistic approach aims to reduce traffic congestion and environmental impact for both local employees and visitors.
7. New Jersey
New Jersey's commuter benefits mandate went into effect in 2019 and requires employers with 20 or more employees to provide pre-tax transportation benefits. This initiative encourages the use of public transportation and promotes a more sustainable commuting culture in the Garden State. With its extensive public transit system, New Jersey provides numerous options for employees to maximize their savings through these benefits.
8. Philadelphia, PA
Enacted in 2022, Philadelphia requires employers with 50 or more employees to offer pre-tax transit benefits. Given the city's public transit options, including buses, trolleys and subways, this mandate is a win-win for both employees and employers looking to reduce their carbon footprint while enhancing employee satisfaction.
Areas to keep your eye on
1. Boston, MA
While Massachusetts does not have an official commuter benefit mandate in place, there are associated tax breaks associated with the offering. A bill was introduced at the state legislature in 2023, but failed to pass in 2024 and is considered “dead.“ Nonetheless, the state does offer the TransitMatch program for qualified employees of the state.
Boston has been actively considering commuter benefits legislation aimed at improving public transit access and usage among employees. Proposed measures could include establishing pre-tax transit benefits to alleviate traffic congestion and encourage sustainable commuting options.
3. Denver, CO
Colorado is another state without a mandate, but instead has the Colorado Alternative Transportation Tax Credit for employers who invest in alternative commuting options, providing them with a tax credit of up to 50% of eligible expenses. Denver is exploring the idea of commuter benefit programs as part of its broader efforts to enhance sustainability in transportation. While specific mandates have yet to be formalized, city officials are engaged in discussions about the best approaches to support commuter benefits for employees.
4. Minneapolis, MN
Minneapolis is considering expanding its transportation benefits framework to include commuter benefits, aligning with its sustainability goals. Currently, the city has a rideshare ordinance that requires employers to provide one or more of (1) a pre-tax payroll deduction program for public transit or vanpool expenses, (2) direct payment for employees' public transit, vanpool, or bicycle expenses, or (3) a free shuttle service.
Though specific mandates have not yet been formalized, city council discussions are ongoing regarding how to effectively promote alternative transportation options.
5. Austin, TX
Austin has expressed interest in exploring commuter benefit mandates as part of its commitment to sustainability. While specific legislation is still in the early discussion stages, the city is focusing on ways to encourage the use of public transportation and other eco-friendly commuting solutions.
6. Portland, OR
Portland is considering implementing commuter benefit requirements as part of its comprehensive transportation strategy. Discussions have focused on creating incentives for employers to offer pre-tax transit benefits to employees, fostering increased public transportation use.
7. San Diego, CA
San Diego is in the early stages of evaluating potential commuter benefits mandates. As the city aims to address its transportation challenges and enhance public transit utilization, discussions are underway among local officials about what form these mandates might take.
Understanding the commuter benefits mandates in your area is essential for ensuring compliance and promoting a positive workplace culture. For employers, offering these benefits not only helps fulfill legal obligations but also fosters employee satisfaction and retention. Each of these states and cities demonstrates a commitment to sustainable commuting practices, paving the way for a future where commuting is less burdensome and more affordable.
As you review your benefits strategy, consider how these mandates can help shape your offerings – because supporting your employees on their daily commutes isn’t just good for them; it’s good for business.
Ready to explore the addition of commuter benefits to your organization’s employee benefits package? Reach out to find out how Edenred can help you enrich those connections – for good.
