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New Benefit: Bike Commuters Get Reimbursement Incentives

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in Employee Benefits Program,HR Management,Human Resources

Tucked into the massive $700 billion financial rescue bill Congress passed earlier this month is a law that should gladden the hearts of physical fitness enthusiasts and environmentally conscious employees. The Bicycle Commuter Act makes employees who ride their bikes to work eligible for a $20-a-month, tax-free reimbursement from their employers for bicycle-related expenses.

The measure, which takes effect Jan. 1, 2009, will work just like more familiar parking and other commuting-cost subsidies that some employers provide to workers. It's an employee benefit, and no employer is required to offer it.

HR pros whose companies decide to offer the program will have to decide how to administer it. The Internal Revenue Service is expected to develop technical guidance and tax regulations in the next several months.

The new law is intended to help defray bike commuting costs—including the costs of buying a bicycle, lock and helmet—and help pay for bike parking fees, shower facilities and general bike maintenance. The high price of gas made it a no-brainer for Congress to pass the bill this fall, according to Capitol Hill watchers.

Some employers already offer perks to bicyclists:

  • The city of Palo Alto, Calif., offers bicycle commuters $20 per month in taxable cash benefits if they commute by bicycle to 60% or more of their scheduled shifts.
  • Google, at its Mountain View, Calif., headquarters, offers employees bike tune-ups once a month.
  • Discovery Communications reimburses employees $350 for a bike, and it designed its three offices in the Washington, D.C., area as "bicyclist friendly," with secure bike racks, day lockers and showers.
  • Yahoo! has bike lockers and showers at its Sunnyvale and Santa Clara, Calif., buildings and a "bike buddies" matching program so employees can share bicycle commuting tips and trips.

The measure is expected to add a $1 million drop in the debt bucket, according to the League of American Bicyclists, one of the advocacy groups that has been pushing for the legislation for about seven years.

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