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Three Surprising Results Employees May Experience With Commuter Benefits

Three Surprising Results Employees May Experience With Commuter Benefits

Expanded public transit. The rise and rebound of ridesharing. Increased work-from-home arrangements. The work commute has changed a lot recently, as lawmakers and civic officials grapple with how to effectively support people traveling to and through ever-growing cities.

New York City, Washington, D.C., Chicago, Philadelphia and Seattle are among cities that have enacted laws and ordinances requiring employers of a certain size to offer commuter benefits to employees. For example, starting January 1, 2024 in Chicago, employers with at least 50 full-time employees must provide a “pre-tax commuter benefit”, allowing employees to use pre-tax dollars to purchase a transit pass through payroll deduction. A number of major cities, including New York City, are working toward implementing congestion pricing, which charges drivers a fee for driving in highly congested areas.

Are you responding to local commuter mandates or are you simply interested in expanding your benefits? You might be surprised by some of the perks your employees could experience by participating in commuter benefits (aside from the obvious tax savings).


Talent Retention

Employee wellness affects not only their health but a business’s bottom line as well. From lost productivity to worker absence from chronic conditions, poor worker health can cost employers $530 billion annually. The Integrated Benefits Institute found that poor worker health costs amount to 60 cents per dollar employers spend on healthcare benefits.

By offering a commuter benefits program employers can help provide savings for both employers and employees. Employers can save by reducing their payroll taxes. The more employees sign up for transportation benefits, the more the employer can save. Employees can lower their monthly expenses by using pre-tax income to pay for their commute. Employers can also attract and retain employees by offering comprehensive transportation benefits.

After the city of Charlotte, North Carolina, installed a light rail system, it was found that residents who used the light-rail system had a BMI that was 1.18 points less than those who didn’t. Light-rail users in Charlotte were also 81 percent less likely to be obese.


Reduce Workplace Stress

Employee stress can lead to long-term health issues, including heart disease, obesity, diabetes and depression. Employee stress can have immediate and damaging effects on a business, leading to missed deadlines, employee turnover and damage to a company’s image. Unfortunately, the drive to and from work can be a significant stress trigger for many employees.

Providing employees with pre-tax incentives to use mass transit or vanpooling can help reduce stress and increase the productivity and effectiveness of your business. According to PriceWaterhouseCooper’s employee financial wellness survey, nearly half of employees say financial stress has caused them to miss work or have reduced productivity. The financial incentive and tax savings that come with commuter benefits can also alleviate other stress triggers.


Less Time Spent Driving

There never seems to be enough time in the workday. One-third of employees work more than 50 hours per week and that doesn’t include time spent driving to and from work. Time commitments are threatening employees’ abilities to maintain a healthy work-life balance and contribute to employee burnout.

Encouraging employees to take mass transit or vanpooling helps avoid the negative effects driving can have on their mental health and wellbeing. When an individual is riding instead of driving, time can be spent catching up on personal emails, listening to meditation tracks or starting the day with a podcast or music. This may put employees in a better state of mind when entering and leaving work.


The information in this blog post is for educational purposes only. It is not investment, legal or tax advice. For legal or tax advice, you should consult your own counsel. To stay up to date on benefits trends and insights, subscribe to our blog

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