Starting January 1, 2024, certain Chicagoland employers will be required to provide any covered employee with transit benefits.

The Transportation Benefits Program Act (the Act), enacted on July 28, 2023, requires some employers to provide a pre-tax commuter benefit to full-time employees. Employers within the scope of the Act include those with 50 or more full-time employees who work within the specified geographic area (see below) and at an address that is located within one mile of a fixed-route transit service. Under the Act, covered employees are those who perform an average of at least 35 hours of work per week for compensation on a full-time basis. This benefit must be offered to employees after 120 days of employment.

The pre-tax commuter benefit should allow employees to use pre-tax dollars for the purchase of a transit pass via payroll deductions, such that the costs for such purchases may be excluded from the employee’s taxable wages and compensation up to the maximum amount permitted by federal tax law. For 2023, the federal commuter benefits pre-tax limit is $300 per month ($3,600 annually). The term “transit pass” is defined to include any pass, token, fare card, voucher or similar item entitling a person to transportation on a public transit under the authority of the Regional Transit Authority (RTA) or the Chicago Transit Authority (CTA). A covered employer may comply with the requirement by participating in a program offered by the RTA or CTA.

The Act applies to employers located in the following geographic locations: Cook County; Warren Township in Lake County; Grant Township in Lake County; Frankfort Township in Will County; Wheatland Township in Will County; Addison Township; Bloomingdale Township; York Township; Milton Township; Winfield Township; Downers Grove Township; Lisle Township; Naperville Township; Dundee Township; Elgin Township; St. Charles Township; Geneva Township; Batavia Township; Aurora Township; Zion Township; Benton Township; Waukegan Township; Avon Township; Libertyville Township; Shields Township; Vernon Township; West Deerfield Township; Deerfield Township; McHenry Township; Nunda Township; Algonquin Township; DuPage Township; Homer Township; Lockport Township; Plainfield Township; New Lenox Township; Joliet Township; or Troy Township.

Chris Parker is a partner in Golan Christie Taglia’s Employment Law practice group concentrating his practice on employment litigation and counseling.

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