New Jersey Commuter Mandate Goes into Effect March 1st
February 17, 2020
As a reminder, New Jersey governor Phil Murphy signed S.1567 the “New Jersey Transit Benefits Law” on March 1, 2019 which mandates that employers with 20 or more employees working in the state of NJ must establish a Transportation Fringe Benefit Plan by MARCH 1, 2020.
WHICH EMPLOYERS ARE IMPACTED?
Any New Jersey employer with 20 or more employees working in the state of New Jersey is mandated to offer transportation fringe benefits. This law includes both full time and part time employees. It does not include federal employees, nor those that are subject to a collective bargaining agreement.
WHAT ABOUT EMPLOYERS IN RURAL AREAS OR LOCATIONS WHERE MASS TRANSIT IS NOT UTILIZED BY EMPLOYEES?
Without having final guidance released yet from the State, we assume that even if there are no employees utilizing mass transit, transportation fringe benefits still need to be offered. In this case, an employer will need a Section 132(f) Transportation Plan Document in place.
WHAT HAPPENS IF AN EMPLOYER DOES NOT COMPLY?
Employers that fail to comply are subject to a penalty of up to $250. Before this penalty is imposed, employers will have 90 days from the date of the violation to offer the pre-tax transportation fringe benefit. There are additional penalties that may be levied for each additional 30 day period without a plan.
WHAT SHOULD BROKERS BE COMMUNICATING TO THEIR CLIENTS?
We advise you to reach out to your NJ clients with more than 20 employees. If they do NOT have employees who utilize mass transit, we recommend that those employers have a Plan Document created for Section 132(f) Transportation. If they DO have employees utilizing mass transit, they should consider establishing a Commuter Benefits plan with administration.
Source: The Harrison Group, Inc.