Magazine article Workforce Management

Transit Perks: A Driving Force for Workers and Employers

Magazine article Workforce Management

Transit Perks: A Driving Force for Workers and Employers

Article excerpt

Each weekday morning Julieta Garcia leaves her home in the New York borough of Queens for her job at the Brooklyn Museum. Garcia takes a bus to the subway, arrives in Brooklyn and takes a short walk to her job as the museum's benefits officer. She pays the bus and subway fares using a prepaid credit card she funds through pretax payroll deductions from her paycheck.

Garcia is like an estimated 2.7 million U.S. commuters who take advantage of an employer benefit that allows them to pay for their commute with pretax dollars.

More than 150 of the 515 museum employees take advantage of the benefit, which also includes prepaid cards to use for parking fees, Garcia says.

Because public transportation offers a practical alternative to high gas prices and lofty urban parking rates, organizations are finding that workers appreciate pretax transit cards and see them as a valuable benefit.

The cards can translate to potentially big savings for the organization and employee. Pretax transit benefits can save commuters up to $1,200 annually and offers employers savings of $230 per employee per year in payroll taxes, says TransitCenter Inc., a New York-based not-for-profit organization founded in the early 1980s that is dedicated to promoting public transportation. TransitCenter's 2010 Commuter Benefit Impact Survey showed that commuter benefits rank fourth among major benefits offered by companies behind health, retirement and disability benefits.

"We've offered commuter benefits for a few years now and started using the premium program through TransitCenter this past April," Garcia says. "Participants receive one card that is replenished monthly, which alleviates a lot of administrative work for us."

The proportion of companies offering a tax-free transit benefit increased by 3 percentage points nationwide in 2010 compared with 2009, TransitCenter's commuter survey shows. …

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