Delaware Valley Regional Planning Commission and SEPTA recently announced that effective December 31, 2022, Title 9 of The Philadelphia Code will require large employers in Philadelphia to offer a mass transit program to covered employees. Commuter benefits allow employees to save by setting aside money tax-free from their paychecks every month to spend on public transportation and carpool expenses.
Employers can offer an employee-paid, pre-tax payroll deduction, or provide an employer-paid direct benefit such as a public transit key card or transportation shuttle. Commuter benefit programs can save employers up to 10 percent on FICA and payroll taxes. They are also an excellent recruitment and retention tool. In Philadelphia, workers can save anywhere from $138 to $540 annually by using pre-tax dollars for transit fares, depending on their fare costs and tax bracket.
The ordinance was passed by Philadelphia City Council, signed by Mayor Jim Kenney in June 2022 and applies to employers with 50 or more employees. A “covered employee” is any employee who worked an average of 30 or more hours per week within Philadelphia County for the same employer within the past 12 months. (Full-time telework employees and government entities are exempt.) Employers are not required to provide a commuter benefit unless an employee requests one. Once requested, employers have 60 days to provide a commuter benefit.