Wednesday, June 17, 2009

UPENN Says No To Bicycle Commuter Benefit

The University of Pennsylvania - Philadelphia's largest employer has rejected requests from employees to set aside benefits for bicycle commuters.

The Human Resources department sent this statement out as a response to a recent inquiry:
Currently the University is unable to offer this deduction for its employees due to the technical and procedural challenges involved. However, given the University’s strong commitment to sustainable transportation, we plan to explore automated processes for assigning, verifying and processing this benefit that may enable us to provide this benefit to our employees at some future date.

While the law itself in its current form is poorly written and needs reform, I don't think anyone would believe this simple tax benefit is too complex for the Ivy League institution to figure out. In fact UPenn recently won an award for its commuter services programming and has been adding hundreds of bike parking spaces.


Todd said...

While I and many others would like to receive the bicycle commuter benefit, it is not a tax benefit, nor is it simple. The way the the IRS has chosen to interpret the law makes it impossible for employers to give this benefit in place of wages, as they can for other commuter benefits. Which means they must give a bicycle commuter that money as additional compensation.

This makes it hard for a lot of employers, who are not sure how they can justify giving more money to certain people based on their commuting choice.

This has been really confusing in my own office. I can't say what the IRS hoped to accomplish with the way they put this law into practice. I would be interested to see which employers, if any, have been willing to offer this benefit to their employees in the Philadelphia area.

Elizabeth Fiend said...

I’m the person who sent the original inquiry to the Human Resources Dept. at University of Pennsylvania. Since then I’ve also received this additional email, and below it you’ll find an email response to a similar employee’s-inquiry at Drexel University. I’m very disappointed that the largest employers’ in Philadelphia won’t be participating in this program – which means that I, and MANY other Philadelphian's who ride their bikes to work, are to be denied a legal benefit that would amount to $240 a year -- 2x for the Fiends as Mr. Fiend rides his bike to work alongside me. It seems that we have no recourse to make it happen either.
Lov,e Elizabeth Fiend

“This message is sent on behalf of Marie Witt, Vice President of Business Services:
Dear Elizabeth,
Thank you for your June 15 email to President Gutmann inquiring about the implementation of the Bicycle Commuter Act. Your message was forwarded to me for response.

As you noted, the 2009 IRS tax law does provide the option of offering a $20/month income tax deduction from employees’ paychecks for anyone who bikes to work. While the law has been implemented in some small- to medium-sized companies (and our research shows that most of the businesses currently offering this benefit have less than 5,000 employees) it is much more difficult to implement with organizations as large and diverse as Penn.

However, given the University’s strong commitment to sustainable transportation, we are exploring options that may enable us to provide this benefit to our employees at some future date. Additionally, while we are unable at this time to offer this particular benefit, the University is looking into a number of options that make biking both safer and more convenient in and around Penn’s campus. These plans include adding more bike parking, increasing security around bike corrals and working with the city to improve bike lanes in the streets around Penn’s campus.
Thank you again for your inquiry.
Marie D. Witt
Vice President
Division of Business Services”

And an email response to a similar employee’s inquiry at Drexel University:

“We're aware of the Bicycle Commuter benefit and are reviewing the feasibility of adding it. The issue is with how to administer the reimbursement process. We outsource our benefits administration and I'm unaware of any flexible spending account vendors who offer processing Bicycle Commuter plans as a service yet.
Jen Loftis
Senior Human Resources Consultant
Think Green - Not every email needs to be printed.”