Covered employee:

An “'Employee'…. as provided in the ‘unemployment compensation law,’ (R.S.43:21-1 et seq.).”

Covered employee:

An “'Employer'... as provided in the ‘unemployment compensation law,’ (R.S.43:21-1 et seq.).”

Any employer in New Jersey with 20 or more employees must offer a pre-tax transportation fringe benefit to all employees. This benefit allows employees to use pre-tax income to cover transit or vanpool commuting costs, in accordance with IRS Section 132(f) and up to the maximum amount allowed by federal law. Employers are not required to offer this benefit to employees covered by a collective bargaining agreement until that agreement expires.

Financial penalties in New Jersey are assessed on a case-by-case basis and can reach up to $3,000 in the first year. Repeat offenses result in even higher fines, escalating every 30 days. For larger companies, these violations can quickly result in substantial financial penalties, making non-compliance an expensive and serious risk.

For New Jersey, the nationwide IRS tax-free limits for commuter benefits apply. For 2025, employees can allocate up to $325 per month for transit and $325 per month for parking, reducing taxable income.

• Pre-tax savings: Employees can lower their taxable income by setting aside funds for transit and vanpool expenses.
• Employer tax benefits: Businesses save an average of 7.65% per employee on payroll taxes.
• Direct transit subsidies: Employers can provide up to $325 per month per employee in tax-deductible transit benefits.
• Additional incentives: Some cities and states offer grants, tax credits, or subsidies for implementing commuter benefit programs.

The mandate applies to the entire state of New Jersey.