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HF 5123

Covered employers required to provide commuter benefits to covered employees.

2025-2026 Regular Session Introduced by Katie Jones and 2 co-sponsors

HF 5123 would require certain large Minnesota employers to offer pretax transit benefits for eligible employees, starting after 120 days, with map guidance and optional additional

Author added Luger-Nikolai
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Bill Summary · HF 5123

HF 5123 (2025-2026) — Covered employers required to provide commuter benefits to covered employees

Purpose and intent

  • Establishes a mandatory commuter benefit program for certain employers in Minnesota.
  • Aims to provide pretax commuter benefits to eligible employees who commute using public transit, with broader transit-related subsidies possible.
  • Requires publicizing and accessibility of a map showing addresses near regular route transit to inform affected employees and employers.

Key provisions and changes

  • Defining terms

    • Covered employee: An individual who averages at least 35 hours of work per week on a full-time basis and is compensated by a covered employer.
    • Covered employer: A broad category (individual, partnership, corporation, LLC, nonprofit, etc.) that directly or indirectly employs or controls wages/hours/working conditions and:
    • Is located in a city of the first class, and
    • Employs 50 or more employees within one mile of a regular transit route, in a geographic area described in the statute.
    • Public transit / Regular route transit: As defined in Minnesota statutes (specific cross-reference to sections 174.22).
    • Transit pass: Any pass or equivalent entitling transportation on public transit.

  • Commuter benefit program (Subd. 2)

    • Mandatory pretax benefit: Covered employers must allow covered employees to purchase transit passes via payroll deduction, with costs excluded from taxable wages up to the federal limit allowed by 26 U.S.C. 132(f) and related regulations. Compliance can be achieved by:
    • Participating in a program offered by the Metropolitan Council or a replacement service provider under § 473.388, or another applicable transit authority in a city of the first class.
    • Additional employer-provided options: Employers may also offer transit programs or subsidies for qualified transportation expenses beyond the pretax transit pass, including reimbursements for walking, biking, carpooling, or vanpooling.
    • Timing: The benefit must be offered to all covered employees beginning with the first full pay period after 120 days of employment.
    • Marketing obligation: Transit authorities and metropolitan planning organizations must promote the existence and requirements of the program to riders, informing affected employees and employers.

  • Covered employers map (Subd. 3)

    • The Metropolitan Council and other relevant transit authorities must maintain a publicly accessible, searchable map of addresses located within one mile of regular route transit.

  • Application and 3rd-party labor considerations (Subd. 4)

    • The bill does not interfere with employees’ rights to bargain collectively or with terms of existing collective bargaining agreements in force as of the effective date.
    • After the effective date, section requirements may be waived in a bona fide collective bargaining agreement only if the waiver is explicit, clear, and unambiguous within the agreement.

  • Effective date

    • The bill text indicates an effective date section, but the specific date is not fully shown in the provided excerpt. The proposal establishes the requirement to begin after 120 days of employment for covered employees, implying a future regulatory or statutory effective date once enacted.

Who is affected

  • Covered employers: Entities located in a city of the first class with 50 or more employees within one mile of a regular transit route.
  • Covered employees: Individuals averaging at least 35 hours per week and employed by a covered employer.
  • Transit authorities and metropolitan planning organizations: Responsible for marketing and maintaining the near-transit address map.
  • Employers and unions: The provisions interact with collective bargaining agreements, allowing waivers only if explicitly agreed in writing.

Procedural and timeline aspects

  • Coverage timing: The commuter benefit must be provided starting with the first full pay period after 120 days of employment for each covered employee.
  • Marketing obligations: Transit authorities must actively market the program to riders and employers.
  • Map availability: A publicly accessible map of addresses within one mile of regular route transit must be maintained.
  • Legislative process: HF 5123 was introduced and referred to the Workforce, Labor, and Economic Development Finance and Policy committee (May 7, 2026). Co-sponsors: Katie Jones and Samantha Sencer-Mura.

Summary in plain terms

HF 5123 would require certain large employers located in specific urban areas to offer a pretax commuter benefit to eligible employees, enabling payroll-deducted transit purchases up to federal limits. Employers may also offer additional subsidies for other commuting options. The benefit would apply after 120 days of employment for affected workers. Public transit authorities would help promote the program and provide a map showing which addresses are near transit routes to aid planning. The measure preserves existing collective bargaining rights, with explicit waivers allowed only if negotiated in writing.

Compiled from official sources — confirm details with the bill’s official record.

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