New York City Transit Benefit Mandate
Just another Affordable Care Act (ACA) Mandate that NYC Employers must follow or suffer a penalty: The New York City Transit Benefit Mandate.
Here’s what you need to know about the NYC Transit Benefit Mandate:
Beginning January 2016, a New York City employer with 20 or more Full Time Employees (FTEs) is required to provide its employees with a pre-tax qualified transportation benefit program up to the limit permitted by Federal Law.
Currently, the Internal Revenue Service permits a pre-tax transit benefit of up to $255 for 2016. The Act does not include the pre-tax parking benefits.
The Affordable Transit Act (the Act) was signed into law in the fall of 2014 by New York City Mayor Bill de Blasio. The Act defines a FTE the same as the Affordable Care Act, or as an employee that works at least 30 hours per week. In addition, the Act specifically excludes government employers, employers not required to pay federal, state and city payroll taxes, and employees covered by a Collective Bargaining Agreement (CBA).
NYC Transit Benefit Penalties
Employers who are required to comply with the Act, but which fail to implement a transit program will be subject to penalties between $100-$250. An employer that fails to comply with the Act may receive a Notice of Non-Compliance.
If so, the employer has a 90 day period to correct the violation without penalties. However, if the employer fails to correct the violation within the 90 day period, the employer will be subject to a $250 penalty for each 30-day period of noncompliance.
Finally, employers have a 180 day grace period to comply with the Act, meaning employers will not be
Record keeping Requirements
Employers must keep records that demonstrate that each eligible FTE was offered the opportunity to use pre-tax income to purchase transit benefits and indicate whether the employee accepted or declined the offer. Employers may maintain these records electronically. Finally, the law requires employers to keep records for two years.
Employers may use the form available on the Department of Consumer Affairs website to document compliance for their business.
Benefit to Employers
Although the Act will require additional administration and associated costs, the pre-tax feature will also benefit employers because payroll costs may decrease. As a result, the employer may pay less in payroll taxes by excluding certain income paid to its employees.
For more information, feel free to contact our office at: 914-633-1717