On July 28, 2023, Governor JB Pritzker signed it into law. House Bill 2068, the “Transportation Benefits Program Act” (the “Illinois Transportation Act”)”), employers are required to provide pre-tax transportation benefits (“transportation benefits”) to their employees.
The Illinois transportation law joins a growing trend of similar local and state pre-tax transportation subsidy laws already in place in various cities and states, including New Jersey, New York City, Washington DC, San Francisco, and Seattle. (See previous blog)Title here and here).
Who is covered by Illinois traffic laws?
Illinois Traffic Laws Apply to Employers[1] Addresses within one mile of a Chicago citywide transit service hub with 50 or more full-time employees working an average of at least 35 hours per week in the geographic areas specified below. It also includes most of the suburbs in Cook County and 37 surrounding townships.[2]
Specifically, the Illinois Transportation Act does not change the terms of existing collective bargaining agreements (CBAs) in effect before January 1, 2024. It also says the transportation law is not intended to reduce unions’ ability to negotiate benefits. The minimum benefits established under the Act, and parties negotiating a new CBA after January 1, 2024, must ensure that such waivers are expressly provided for in the contract and that the language is clear. and that the de minimis benefits under the Act may be waived so long as it is clear. However, it is unclear whether this law applies if her existing CBA is silent regarding transportation benefits.
What transportation allowances must employers provide?
Employers must allow employees to use pre-tax dollars through payroll deductions to purchase transportation passes, including passes, tokens, fare cards, vouchers, or similar items that permit use of public transportation. It won’t. Employers can also comply with Illinois transportation laws by participating in programs offered by the Chicago Department of Transportation or Regional Transit Authority.
Illinois transportation law also requires transportation benefits to be provided in the “maximum amount permitted by federal tax law.” The maximum allowable level for a transportation pass in 2023 is $300 per month. This number is adjusted annually for inflation and is expected to increase by the time the Illinois Transportation Act goes into effect. The 2024 contribution limit is expected to be published in October or November 2023.
What are the deadlines to comply with Illinois traffic laws?
This law takes effect on January 1, 2024. Employees hired after January 1, 2024 will be eligible to participate in transit benefits after 120 days of employment.
What are the penalties for violating Illinois traffic laws?
Notably, as currently drafted, the law does not provide for a private cause of action against employers for noncompliance, nor does it include penalty provisions related to employer noncompliance. Not yet. However, because the law requires employers to provide some benefits, employers who do not comply must comply with the Illinois Wage Payment Collection Act, IL ST CH 820 §115/1; onwardsIt provides both public and private enforcement tools against employers who unreasonably withhold wages under certain circumstances. Similarly, while the Act does not provide relief for employees who are fired in retaliation for invoking the Act, such employees may be entitled to the employment-at-will principle, pointing to the Act’s underlying public policy. may attempt to argue that there is a public policy exception to the . Therefore, although the Act lacks a self-enforcement mechanism, employers should be wary of employees seeking to borrow enforcement mechanisms from other means.
What should employers do now?
Employers subject to Illinois transportation laws should consider taking pre-emptive steps to prepare for compliance on January 1, 2024. However, employers should consider the following:
- Take steps to establish a transportation benefits program (such as exploring options with third-party vendors) and consider implementing a transportation benefits program as soon as possible (instead of waiting until January 1, 2024) .
- Update applicable employee benefit documentation in preparation for open enrollment in 2024.
- Prepare to answer employee questions regarding Illinois traffic laws.
- Disseminate transportation allowances to all employees.
- Oversee the implementation of rules and regulations regarding the administration and enforcement of Illinois traffic laws.and
- Monitor potential violation penalties related to Illinois traffic laws.
[1] Defined as an individual, partnership, association, corporation, limited liability company, government, nonprofit organization, or business trust that directly or indirectly, or through an agent or other person, employs or controls wages, hours, or labor. will be done. Employee Conditions.
[2] Warren Township, Lake County. Grant Township, Lake County. Frankfort Township, Will County. Wheatland Township, Will County. Addison township; Bloomingdale township; York township; Milton township. Winfield township. Downers Grove Township. Lisle township; Naperville township. DUNDEE TOWNSHIP. Elgin township; St. Charles township; Geneva township. BATAVIA TOWNSHIP. Aurora Township; Zion Township; Benton Township. Waukegan township. Avon township. Libertyville township; Shields township. Vernon township. West Deerfield Township. Deerfield Township; McHenry Township. Nanda township. Algonquin Township. DuPage Township. Homer township. LOCKPORT TOWNSHIP. Plainfield township; new Lenox township. JOLIET TOWNSHIP.and Troy Township
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