3 surprising results employees may experience with commuter benefits

Expanded public transit. The rise and rebound of ride-sharing. 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 their 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 their 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. And 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 simply interested in expanding your benefits offering? You might be surprised by some of the perks your employees could experience by participating in commuter benefits (aside from the obvious tax savings, of course). Keep reading or download your free guide to learn more!

Improve talent retention

Your employees’ wellness affects their health — and your bottom line. 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 every dollar employers spend on healthcare benefits. 

Providing a commuter benefits program can help provide savings for both employers and employees. Employers can save by reducing their payroll taxes. The more employees who 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 lightrail 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. And light-rail users in that city were also 81 percent less likely to be obese.

Reducing workplace stress

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

Providing employees with pre-tax incentives to take mass transit or vanpooling can help them reduce stress, increasing 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 has reduced their productivity. The financial incentive and tax savings that come with commuter benefits can also alleviate other important stress triggers. 

Reducing 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 the time spent driving to and from work. These time commitments are threatening employees’ abilities to maintain a healthy work-life balance and can contribute to employee burnout.

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

We covered the basics on providing commuter benefits programs on Benefits Buzz so you can learn more about the potential savings.

Editorial note: This article was originally published on August 25, 2022, and has been updated for this publication.

The information in this blog post is for educational purposes only. It is not legal or tax advice. For legal or tax advice, you should consult your own legal counsel, tax and investment advisers. 

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