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Mayor Kenney Expected to Sign Employee Commuter Transit Benefit Programs Bill into Law

June 23, 2022


A new Philadelphia ordinance, the Employee Commuter Transit Benefit Programs (ECTBP), may soon allow thousands of employees to use pre-tax income to cover their commuting costs. Passed by the Philadelphia City Council on June 9, 2022, the bill is currently awaiting Mayor Kenney’s signature.

Originally introduced by Councilmember Helen Gym, the ECTBP will require covered employers to offer either 1) a pre-tax payroll deduction for mass transit and qualified bicycle expenses or 2) an employer-paid benefit covering mass transit expenses. Currently, the IRS allows taxpayers to set aside up to $280 a month for public transit passes and certain other commuting expenses.

If the bill becomes law, it will go into effect on December 31, 2022. Covered employers will include individuals, co-partnerships, associations, corporations, and other entities in Philadelphia that employ fifty or more covered employees. The ECTBP will not apply to government employers.

An employee will qualify as a covered employee if she or he has worked an average of at least 30 hours per week in Philadelphia for the same employer during the previous 12-month period. Employees must have worked “for compensation” to be covered, so the ECTBP will not apply to volunteers, unpaid interns, and unpaid apprentices. Similarly, those who worked for multiple employers without averaging at least 30 hours per week with one of them will not be covered.

The authors of the bill hope it will result in hundreds of dollars of annual savings for employees while decreasing traffic congestion and emissions by making public transportation a more affordable and attractive option for commuters.

Mayor Kenney is expected to sign the bill shortly, so employers should review their transportation programs and take appropriate steps to make sure they are in compliance by the end of the year. Employers failing to comply will be subject to penalties, including fines of up to $300 per day, with each day out of compliance constituting a separate violation.

Montgomery McCracken’s Labor and Employment attorneys routinely counsel companies on complying with local, state, and federal law, and are available to confer with companies about how the ECTBP will impact them.