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Posted December 19, 2019

Why You Should Consider Adding Commuter Benefits to Your Benefits Portfolio

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Having to sit in traffic morning after morning—and then, night after night—during a daily commute is enough to make a job unbearable for many employees.

Research by one global staffing firm shows that nearly a quarter of workers today have left a job because of a bad commute, with residents in Chicago, Miami, New York and San Francisco (in that order) being most likely to resign for this reason. And a separate survey by the Workforce Institute found that almost half of employees agree that their commute has a significant impact on their job satisfaction.

A grueling commute doesn’t just affect employee retention. It also factors into employee productivity and a company’s ability to attract employees: 32 percent of employees have considered the commute when choosing a job, and 4 percent have even called in sick to avoid a commute.

 

How can employers help?

If you’re an employer, you can offset stress and costs affiliated with your employees’ commute by providing financial incentives through a commuter benefits plan. These benefits encourage healthier, stress-relieving habits and go a long way in helping with recruitment and retention in your workplace, which takes on greater importance when you consider recent record-low unemployment numbers.

Commuter benefits also encourage your employees to ditch the tiring task of driving to and from work every day while providing them with flexible ways to save money through pre-tax dollars.

And these pre-tax benefits help your business reduce its payroll tax burden.

 

What do commuter benefits cover?

Mass transit: Commuter benefits can be used for expenses incurred for a pass, fare card, voucher or similar item for transportation on mass transit. Mass transit examples include train, bus and subway.

Vanpooling: Funds can be used for expenses incurred in a commuter highway vehicle, which is defined as any vehicle that seats at least six adults, not including the driver. At least 80 percent of the mileage in the vehicle must be used for the purpose of transporting employees to and from work, and the number of employees is on average at least half of the adult seating capacity of the vehicle. Lyft Shared and uberPOOL comply with IRS vanpooling regulations.

Parking: Eligible parking expenses include amounts paid for parking of your vehicle at or near work or at a location used to commute to work (such as a park-and-ride facility)

 

What’s not covered?

Commuter benefits cannot be used to pay for tolls, taxis, gasoline, mileage, business trip costs, airport parking fees or residential parking fees.

 

How do employees benefit from commuter benefits? 

Healthier results: Your employees’ wellness affects their health—and your bottom line. A recent study found that unhealthy workers cost companies $1.1 trillion in lost productivity annually.11 And providing healthcare for obese employees costs $12.7 billion due to increased costs in healthcare, sick leave, disability and life insurance.

Commuter benefits can help. One study found that women who commuted to and from work “by any means other than a private vehicle” had a BMI 0.7 points lower and weighed more than five pounds less than women who drove to work. For men, the drop in BMI was 1.0 points, and they weighed nearly seven pounds less than their driving counterparts.

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.

Reduced stress: Employee stress can lead to long-term health issues, including heart disease, obesity, diabetes and depression. And 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 reduce stress, which increases the productivity and effectiveness of your business. And the financial incentive and tax savings that come with commuter benefits also alleviate another important stress trigger, since nearly half of employees say financial stress has caused them to miss work or has reduced their productivity.

Less time driving: There’s never enough time in the workday. The average American works somewhere between 44 hours and 47 hours every week. 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 lead to employee burnout.

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

 

For more information on how commuter benefits work and how they can enhance your benefits offering and employee satisfaction, listen to this Benefits Buzz podcast.

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