NY State Updates - 2015 Jan 15 No.01

On Nov. 11, 2015, the New York City Department of Consumer Affairs (NYCDCA) adopted rules related to the city’s new Commuter Benefits Law. As reported in the Nov. 4, 2014 edition of Compliance Corner, New York City Mayor de Blasio signed NYC Bill 0295-2014 last year requiring employers with 20 or more full time employees working in New York City to offer the opportunity to purchase certain pre-tax transportation benefits to those employees. These adopted rules clarify provisions in the law and provide guidance to employers and employees.

According to the newly adopted rules, a full-time employee is one who has worked an average of 30 or more hours per week in the most recent four weeks, any portion of which was in New York City. In determining whether an employer is subject to this requirement, the number of full-time employees is averaged over the most recent consecutive three-month period. The opportunity to do this must be made to full-time employees by Jan. 1, 2016, or four weeks after commencement of full-time employment by that employee, whichever is later.

If an employer drops below the 20 full-time employee threshold, it must continue to offer the opportunity to those who were full-time employees prior to the reduction in staff.

The newly adopted rules also institute a recordkeeping requirement related to the commuter benefits law. Under the requirement, employers must maintain records for two years to sufficiently demonstrate that full-time employees were offered the opportunity and whether the employee accepted or declined the offer. The NYCDCA has provided a form on their website that can be used to document compliance.

On Dec. 8, 2015, the NYCDCA also published an FAQ related to the new law. The FAQ addresses which employers are covered by the law, which employees are covered by the law, what transit programs are covered by the law, questions relating to setting up a plan, recordkeeping requirements, penalties and tax questions.

Of particular interest is the fact that employers outside of NYC are subject to the requirement if they have at least 20 full-time employees whose job responsibilities require them to occasionally work in NYC and who have worked in NYC for any portion of the most recent four weeks.

The FAQ also clarifies that the pre-tax funds can be used for any kind of public or private transit pass. However, qualified parking expenses and bicycle commuting reimbursements are not covered by the law.

Commuter benefit vendor information is provided to help those interested in setting up a program.

The law provides employers with a six-month grace period before NYCDCA enforcement will begin. Although the law is effective Jan. 1, 2016, the NYCDCA will not enforce penalties until July 1, 2016.

Employers can be fined $100 to $250 for the first violation if not corrected within 90 days. If the violation is not corrected following the first fine, an additional fine of $250 may be issued after every additional 30-day period of noncompliance.

Final Rule »
Employer Compliance Form – Offer of Commuter Benefits »
Commuter Benefits Law FAQ »