Beginning January 1, 2024, a new law will be in effect in Illinois that requires covered employers to provide their covered employees with the opportunity to pay for commuter passes on a pre-tax basis. This is according to the recently legislated Transportation Benefits Program Act (the Act). Employers that will be affected by this statutory requirement are encouraged to take notice of the changes and prepare accordingly.
The Act is well-poised to introduce significant modifications in the employer-employee relationship, and more precisely how commuting expenses are managed. Covered employers, according to the Act, are those with at least 20 employees (including part-time workers) who have worked for the employer for at least 30 days in a year. Covered employees are those who choose to take advantage of the benefit.
These changes can be expected to bring about a shift in both employer and employee financial strategies related to commuting. As employees explore this new avenue to manage their commuting expenses, it becomes increasingly crucial for employers to stay informed and flexible in their responses. This could include updates to company policies or benefits programs, and should be done timely to ensure compliance.
Corporate legal teams and HR departments should therefore develop a deep understanding of the Act, its implications, and how it influences policies. The early adoption of necessary modifications will not only demonstrate a committed sense of responsibility to employees, but it will also protect the company from potential legal complications arising from non-compliance.
For a detailed examination of the law, click here.