Commuter Check, the leading full service provider of commuter benefits, congratulates Governor Brown on signing legislation that requires employers with fifty or more employees to establish a Qualified Transportation Fringe Benefit program consistent with Section 132 of the Internal Revenue Code. According to the text of the bill, SB 1339, the State believes that by requiring large employers to offer this program, it will encourage the greater use of mass transit and vanpools. For those employees who already commute to work using mass transit, it will offer them significant tax savings. Participating employers will also reduce their tax burden.
Bill Acevedo, a Partner at the Oakland law firm Wendell Rossen commented, “This win-win program allows employees to use pre-tax dollars for many of their transit costs and employers to lower their payroll taxes. Who doesn’t love that?”
Elizabeth Hughes of TDM Specialists, Inc., and commuter coordinator for a variety of large companies in the Bay Area added, “SB 1339 is a good step that the State has taken to lower the cost of commuting and advance California’s climate protection goals, all without raising taxes or otherwise harming economic growth. This helps our clients reduce the demand for on-site parking and increase employee retention efforts.”
This bill is based on legislation passed five years ago by the City and County of San Francisco which mandates that companies with 20 or more employees offer transit and vanpool benefits to their employees. The most striking aspect of this legislation is that it actually had the support of the San Francisco business community. The San Francisco Chamber of Commerce, the Golden Gate Restaurant Association and the Building Owners and Managers Association (BOMA) all saw the inherent benefit for their members to participate in a program that saves payroll taxes, income tax for their employees, reduces traffic congestion, and lessens air pollution.
Affected employers that do not have a program in place yet will be pleasantly surprised at how easy this benefit is to provide to employees. There are no required plan documents, no use-it-or-lose it clauses, and no defined open enrollment periods. By offering commuter benefits, employers can save up to 10% on average in payroll taxes and employees can save up to 40% on personal income tax on the amount they set aside.
Gerard Bridi President and CEO of Edenred USA which operates Commuter Check said that “once every larger employer in the Bay Area offers a transit/vanpool benefit program, the results will be visible: Higher transit and vanpool participation, less roadway congestion, and cleaner air.” The income tax savings for employees could not be timelier in these tight economic times. The more employees that participate, the more employers save on payroll taxes. According to the bill, employers will have at least six months following the adoption of the ordinance to comply. Employees who worked at least 20 hours per week, on average, during the previous calendar month are eligible for this benefit.
Information on participation in transit/vanpool benefits can be found at www.commutercheck.com, or by contacting us at 1-800-531-2828.
About Edenred USA
Edenred USA is a leader in innovative employee benefits solutions and premier provider of national commuter benefit programs: Commuter Check, a nationwide commuter benefits program provider; and WiredCommute, a private label program for third party administrators. Its mission is to make tax-free commuter benefits a staple in employee benefits packages throughout the American workplace – while helping protect the environment.
About Edenred Group
Edenred, which invented the Ticket Restaurant® meal voucher and is the world leader in prepaid corporate services, designs and delivers solutions that make employees’ lives easier and improve the efficiency of organizations.
By ensuring that allocated funds are used specifically as intended, these solutions enable companies to more effectively manage their:
The Group also supports public institutions in managing their social programs.
Listed on the NYSE Euronext Paris stock exchange, Edenred operates in 39 countries, with 6,000 employees, nearly 530,000 companies and public sector customers, 1.2 million affiliated merchants and 34.5 million beneficiaries. In 2011, total issue volume amounted to €15.4 billion.
Ticket Restaurant® and all other trade names of Edenred products and services are registered trademarks of Edenred SA.