Does my business have to offer commuter benefits?

Maybe. Federal law does not require employers to offer commuter benefits, but a growing list of states, counties, and cities do. If your business has 20 or more employees and operates in one of the jurisdictions below, you are very likely required to offer a pretax commuter benefit.

The short decision tree

New York City: Required if you have 20 or more full-time employees in NYC.
New Jersey (statewide): Required if you have 20 or more employees in NJ.
Washington, D.C.: Required if you have 20 or more employees in DC.
Philadelphia: Required if you have 50 or more covered employees working 30+ hours per week in Philadelphia.
Chicago and Cook County, Illinois: Required if you have 50 or more covered employees within one mile of fixed-route transit in the six-county RTA region. The rule is the Illinois Transportation Benefits Program Act.
Seattle: Required if you have 20 or more employees worldwide and any are working in Seattle.
San Francisco Bay Area (nine counties): Required if you have 50 or more full-time employees in the nine-county Bay Area. That covers Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, southwestern Solano, and southern Sonoma counties.
Berkeley, California: Required if you have 10 or more employees averaging 10+ hours per week, under the TRACC ordinance.
Los Angeles: Required under the City of Los Angeles ordinance if you have 50 or more employees in the LA Metro area. Separately, SCAQMD Rule 2202 applies to worksites with 250 or more employees.
Hawaii: A state enabling law (HRS §46-16.2) lets counties adopt commuter benefit ordinances. It is not a statewide mandate, and as of September 2026 we are not aware of a county ordinance in force.

What "required" means

In most jurisdictions, you must offer employees the chance to set aside pretax dollars for transit and (sometimes) parking, up to the federal IRS limit. In 2026 that is $340 per month for transit and $340 per month for qualified parking.

You do not have to subsidize the benefit. You do have to make the option available, communicate it, and keep records.

What happens if I don't comply?

Penalties vary. Examples include $150 to $300 per-day fines in Philadelphia after a written warning, up to $6,000 in first-year penalties in D.C., and fines of up to $250 per violation in NYC. Most cities issue a warning first, then escalate.

What if I'm not required?

Most employers still benefit from offering it. Employees keep more of what they make, and the employer's payroll-tax savings on that spending cover Alice's fee. With Alice, there is no up-front employer cost and no out-of-pocket cost.

Confirm what applies to you

Read the deep-dive articles for Chicago and Cook County and Seattle, or the full 2026 mandates guide. If you want a human to walk you through it, contact sales.

Talk to sales

sales@thisisalice.com or (929) 552-4625.

Specific benefits, election rules, and run-out periods depend on your employer's plan design. Check with your HR team or plan administrator for details.

Figures shown are for the 2026 plan year and are set by the IRS. Limits are indexed annually by the IRS.

Alice does not provide tax, legal, or financial advice. Consult your own tax preparer, lawyer, or financial advisor for guidance specific to your situation.