Rising Gas Prices May Effect Employee Morale
As gas prices continue to soar and make headlines, employees are modifying their travel to reduce expenses. They are becoming creative with their commutes to work and considering alternative resources such as public transportation or car pooling, and all the while wishing they lived closer to their place of employment. To help ease the pain, many employers are seeking ways to help balance the needs of the company with the needs of the employee. Many are considering compressed workweeks or flexible schedule arrangements.
If you are a service company, ensuring that customer business hours are covered is imperative. Using alternate shifts such as four 10-hour days, with different people taking different days off to ensure shift coverage, may be a possibility to reduce the commute. If the position is a “back office” or non-customer facing position, working from home a few days per week may ease the commuting costs. These options may not work for all companies and may not work for all employee positions. In fact, some of these options may actually penalize the employees it is most intended to help.
When considering these options, it is important to solicit your employees’ feedback and evaluate the impact on the business. Sometimes gathering feedback through an employee committee and/or managers who can evaluate suggestions against business impact can reveal viable solutions. Employers who are sensitive to the costs of employee commuting and are willing to discuss or consider alternatives are viewed as compassionate employers demonstrating genuine concern for their employees while balancing the business needs. It can go a long way in building employee morale to engage employees in a healthy discussion.
While many employers and employees are taking advantage of the pre-tax “Flexible Spending Accounts” available for medical expenses and dependent care, they are less familiar with the Section 132 Parking and Transit Plan, which is intended to help employees offset the cost of transportation. Under a Section 132 Plan, parking and transit costs can be set up on a pre-tax basis. The commuter decides how much will be deducted from each paycheck and when he or she incurs parking or transit costs, they submit receipts for reimbursement. Unlike a Flexible Spending Account, there is no “use it or lose it” provision, so commuters can carry funds over into the next calendar year. There is, however, a maximum monthly reimbursement set by federal regulations that changes each year.
The following are reimbursable under the 2008 Section 132 Parking and Transit plan according to www.irs.gov.
- Transit Passes: A pass, token, fare card, voucher or similar item entitling a person to transportation on mass transit facilities, or provided by a person who transports people for compensation or hire in a vehicle that seats at least six adults (excluding the driver).
- Qualified Parking: Parking provided on or near the employer’s business premises or at a location from which the employee commutes by carpool, commuter highway vehicle, etc.
- Commuter Highway Vehicle: Transportation provided by an employer to an employee, in a vehicle which seats at least six adults (excluding the driver) in connection with travel between the employee’s home and work, provided that 80% of the vehicle’s mileage is reasonably expected to be for transporting employees from home to work or on trips where at least half of the adult seating capacity is filled by employees.
While helping employees cut their commuting costs is essential during these tough economic times, employers should carefully consider all options and be mindful not only of what is best for employees, but also what will meet the needs of the business.