Last updated: May 26, 2026. Primary source: NJ Transit commuter tax benefits.
New Jersey was the first US state to enact a statewide commuter benefits mandate. The NJ law requires employers with 20 or more employees to offer eligible employees a pretax transportation fringe benefit, with collective-bargaining exclusions. Alice provides the pretax payroll mechanism, employee-facing enrollment flow, and Alice Card when available under the employer’s plan.
Who NJ’s Mandate Covers
Covered employers. The New Jersey commuter benefits law applies to any employer with 20 or more employees. The threshold is applied at the employer level across New Jersey locations — not per worksite.
Covered employees. Under NJ rules, a covered employee is one whose wages are subject to New Jersey’s gross income tax and who is not under a collective bargaining agreement. Confirm CBA edge cases with employment counsel.
Government employer exclusion. The mandate does not apply to government employers.
Collective bargaining exclusion. Employees covered by a collective bargaining agreement (CBA) are excluded from the mandate — unless the CBA already provides a pretax transportation fringe benefit. In that case, the exclusion does not apply because the benefit is already covered.
For expense rules, see Alice’s eligibility guide. For workforce coverage, use the NJ rule summary above and confirm edge cases with counsel.
What NJ Requires
The core obligation is straightforward: offer eligible employees the opportunity to use a pretax transportation fringe benefit, up to the applicable federal IRS monthly limit.
For 2026, the IRS limit is $340 per month for transit and commuter highway vehicle transportation, and $340 per month for qualified parking. See the 2026 commuter benefit limits.
The law does not require the employer to fund the benefit. The employer’s obligation is to make the benefit available so that eligible employees can elect a pretax payroll deduction for qualified commuter expenses — subway, bus, train, ferry, eligible vanpool, and qualified parking near work or a transit connection.
Recordkeeping. Employers should maintain records sufficient to demonstrate that the benefit was offered and that eligible employees had the opportunity to elect it.
Source: NJ Transit Commuter Tax Benefits.
Enforcement and Penalties
The New Jersey Department of Labor and Workforce Development (NJDOL) enforces the commuter benefits mandate.
- First violation: a civil penalty of up to $250.
- Continued noncompliance: an additional civil penalty of up to $250 for each 30-day period after the first violation during which the employer has not cured the violation.
Each uncured 30-day period adds exposure, and a NJDOL audit or employee complaint can surface the issue at any time. Getting compliant before a notice arrives is the lower-cost path.
How Alice Supports NJ Compliance
Alice provides the pretax transportation fringe benefit infrastructure that NJ employers need. The employer remains responsible for compliance; Alice supports the setup and documentation workflow. Five steps:
- Payroll connection. Alice connects to your existing payroll system. Alice has connections to 30+ payroll providers, including ADP, UKG, Paylocity, Paychex, Toast, and others.
- Offer documentation. Alice’s enrollment flow and records support evidence that the benefit has been offered to eligible employees.
- Employee enrollment. Employees enroll through Alice at their own pace.
- Pretax payroll deduction. Elected amounts are deducted pretax through your connected payroll system. Alice is designed to match the deduction to paycheck reality.
- Alice Card. Employees use Alice Card — a Visa commercial credit card, not a debit, prepaid, or preloaded card — for eligible commuter expenses.
Alice is built for the kinds of teams NJ’s mandate is most likely to reach: restaurants, hospitality, retail, healthcare, and other frontline employers where schedules and paychecks vary. Learn more about Alice for restaurants or hospitality.
Comparing providers? See Alice vs WageWorks or Alice vs HealthEquity.
NJ Employers Already on Alice
New Jersey employers across industries are already using Alice.
- Oddfellows Montclair — the Montclair, NJ ice cream destination — uses Alice to cover its NJ workforce.
- O’Bagel — the Hoboken, NJ bagel shop featured on the Food Network and Good Morning America — runs its commuter benefits through Alice.
- Stout NYC Hospitality Group — the bar and restaurant group with 18+ locations across New York City and New Jersey — uses Alice for 145 employees, including its NJ locations.
Set Up NJ Commuter-Benefit Support
If your New Jersey business has 20 or more employees, the mandate applies now. Alice can have you onboarded with a commuter-benefit program that supports NJ requirements, typically within about a week from your first call.
Contact sales@thisisalice.com or (929) 552-4625. We’ll get you onboarded in one call.
Also operating in New York City? See NYC commuter benefits compliance with Alice.
Alice does not provide tax, legal, or financial advice. Consult qualified counsel for guidance specific to your business.