On January 1, 2014, the amount of the public transportation subsidy that is deemed nontaxable automatically decreased from $245 per month to $130 per month due to the failure of Congress to enact legislation extending the parity of the transit subsidy with the parking subsidy. On December 16, 2014, the Tax Increase Prevention Act of 2014 (TIPA) became law. In passing TIPA, Congress retroactively increased the nontaxable amount of the transit subsidy to $250 per month for all months in 2014.
On March 31, 2015, NTEU filed a national grievance alleging that HHS breached Article 53, Section 2 of the parties’ Consolidated CBA when it refused to pay employees retroactive transit subsidies up to the new nontaxable amount for 2014. An arbitration hearing was held on March 16, 2016. On September 16, 2016, the arbitrator sustained NTEU’s grievance.
The arbitrator held that the Department is obligated to provide transit benefits to participating employees in the amount of the employee’s actual commuting costs, not to exceed the amount that is nontaxable under the Internal Revenue Code; TIPA made the nontaxable amount $250 per month retroactive to January 2014. Specifically, this entails payment of retroactive transit subsidies to employees who participated in HHS’ Transhare Program at any time from January 1, 2014, through December 31, 2014, in the amount of transit costs they incurred in excess of $130 per month and up to $250 per month. The arbitrator remanded the case to the parties to create a claims process establishing the method for making payments of retroactive transit subsidies to impacted employees.
NTEU is currently working on creating a claims process whereby impacted employees can submit requests for payment of retroactive transit subsidies to the Department. Based on current regulations, this will require employees to certify the actual amount of commuting costs they incurred each month from January 1, 2014, through December 31, 2014. At this time, NTEU encourages any employees who believe they are entitled to receive retroactive transit subsidies to review their public transit expenses in preparation for submitting reimbursement requests to HHS once a claims process has been established.
I will continue to keep you informed as developments occur.