Minnesota Commuting laws & HR compliance analysis

Minnesota Commuting: What you need to know

The state encourages employers to promote ridesharing and to provide commuting alternatives for employees. The Minnesota Department of Transportation Office of Transit coordinates public transit subsidies, ridesharing programs, and park-and-ride lots. For information, go to http://www.dot.state.mn.us.
For a Limited Time receive a FREE HR Report on the "Critical HR Recordkeeping”.  This exclusive special report covers hiring records, employment relationships, termination records, litigation issues, electronic information issues, tips for better recordkeeping, and a list of legal requirements.  Download Now
Rideshare. Minnesota law defines “ridesharing” as transportation for a fee or that otherwise is “incidental to another purpose of a volunteer driver”--that is, employees sharing a commute to work in carpools and vanpools (MN Stat. Sec. 169.01).
Taxation. No county, municipality, or other political subdivision in Minnesota may impose taxes on or require a license for a ridesharing arrangement (MN Stat. Sec. 174.257).
Licensing. Carpool and vanpool operators are not held to the same strict standard of care as that demanded of common carriers and are specifically excluded from the regulations that apply to public transportation and common carriers (MN Stat. Sec. 221.71).
Compensation. Minimum wage and overtime laws do not apply to employees' time spent in ridesharing arrangements (MN Stat. Sec. 177.251).
Employer tax benefits. Minnesota employers may provide transit passes or vanpool subsidies as a pretax benefit for employees, reducing payroll taxes. If an employer writes off the full transit benefit as a business expense, it may claim the 30 percent state tax credit on the employer-paid amount of employee transit expenses subsidized, equivalent to 7.6 percent of the employees’ contribution. If an employer writes off the full cost of transit benefits as a business expense and claims the 30 percent state tax credit in the same year, it must report the credit as income in the following year. Note that employee-paid ...

Read more about Commuting