What's more important than employee benefit offerings at the workplace? Ensuring employees actually make it to work. Although driving their own vehicle is the most popular transportation mode among U.S. workers, one-third of employers offer incentives to employees who bike, walk, use mass transportation or carpool to work.
Transportation benefits and incentives have even been a discussion point during the tax reform debate. Both the House and Senate bills contain provisions reducing or eliminating some of their tax deductibility, but the provisions in each bill differ.
Employers reported the most common ways their employees travel to the workplace in Transportation Benefits and Incentives: 2017 Survey Results from the International Foundation of Employee Benefit Plans. When asked to choose the top three from a list of options, organizations selected:
- Car with single occupant – 90%
- Rapid transit – 44%
- City bus – 41%
- Carpool – 22%
- Bicycle – 15%
- Walk – 10%
- Motorcycle/moped – 10%
- Ride share (Uber, Lyft, etc.) – 5%
With the majority of employees driving their own vehicle to work, parking benefits and incentives are a major perk. More than four in five (83%) organizations offer some type of on-site parking. Forty-three percent of organizations provide free parking to employees.
Among employers offering mass transportation incentives, nearly one-third of their employees use mass transit incentives when offered. I spoke with Michael Cerullo, a claims advocate in Long Island, New York, and he uses both mass transit and parking benefits from his employer as needed because of the frequent transit system delays with subway and commuter trains.
"Our organization offers parking reimbursement for those who work in the New York City office if there are major issues with trains," said Cerullo, who takes the Long Island Rail Road and the New York City Subway on a daily basis to get to and from his Midtown Manhattan office.
More than one-half of employers that offer transportation incentives have a pretax benefit program in place, enabling their workers to exclude mass transit and/or carpool costs from their gross taxable income.
On the West Coast, Jenny Sherman, human resources manager at a credit union in Portland, Oregon, is focused on a different transit benefit—bicycling to work.
"Because Portland is such a bicycling-friendly city, employees who bike to work have expressed desire to be paid more for their choice," said Sherman.
Over the last two years, Sherman's company has responded by increasing their transit benefit to a full 100% reimbursement. Employees who bike to work also receive ten dollars per month and have access to shower and locker room services.
Of employers offering biking/walking transportation incentives, 44% provide on-site bicycle storage, 39% provide locker rooms and showers, and 19% offer bike-to-work subsidies, allowances or reimbursements.
Attracting and retaining talented workers is the main reason organizations offer transportation incentives. The second most common reason is response to worker requests. Organizations said their workers choose their specific mode of transportation based on convenience, commute length and cost.
For more information and to read the full survey report, visit www.ifebp.org/transportationbenefits.