NTEU Wins Retroactive Transit Benefit Arbitration at IRS; SEC Continues to Refuse to Provide Retro Transit Subsidies


1/17/14: Last week, NTEU won a national grievance against the IRS for its refusal to provide retroactive transit benefits to its employees under the American Taxpayer Relief Act of 2012 (ATRA). The independent arbitrator ordered the IRS to pay retroactive transit benefits to IRS employees for each month in 2012. NTEU has a similar case pending against the SEC, which is scheduled for an arbitration hearing in early 2014. Furthermore, other financial regulators, such as the FDIC and NCUA, voluntarily provided this retroactive transit benefit to their employees. Nevertheless, we have remained unable to resolve this issue with SEC management.

A few months ago, Congress passed ATRA, which amended the law governing qualified transportation fringe benefits. Specifically, it amended the amount of the transportation subsidy that may be provided to an employee by an employer and which may be excluded from gross income. The amendment in section 203 of ATRA increased the maximum monthly transportation subsidy that may be provided from $125 per month to $240 per month by making the subsidy dependent on inflation adjustments under 26 U.S.C. 132(f)(6).  It also provided that the amendment resulting in an increased transportation subsidy shall apply to months after December 31, 2011.  The monthly amount was later adjusted by inflation to a maximum of $245.

In April, NTEU Chapter 293 filed the national grievance against the SEC over its refusal to implement retroactive transit benefits under Article 23 of the Collective Bargaining Agreement, as well as the agency’s refusal to bargain over the issue -- despite the fact that other agencies, such as the FDIC and NCUA, have already provided the benefits to their employees. In fact, the SEC in response to their grievance stated that they are "not required" to provide the same benefits as other FIRREA agencies, even though the Pay Parity Act of 2002 requires them to provide comparable benefits.

Last year, the SEC claimed that the retroactive benefit provided by ATRA only allows tax relief related to transit benefits that were already provided back in 2012, but that it does not allow employees to receive retroactive transit benefits today. This is simply not the case, however, as a number of other agencies represented by NTEU have provided the benefit to their employees -- including the IRS, which is charged with interpreting the law.

"It is not clear to us why the SEC is refusing this benefit," Chapter 293 President Greg Gilman noted today. "The benefit has again dropped to $130 per month for this year, so clearly the agency can afford to pay the retroactive amount, since it would have been obligated under the CBA to pay the same amount if Congress had left the benefit at $245 for 2014. And it is also clear that the agency can legally provide the benefit, because other agencies have done so. Since there is no legal or budgetary impediment, we remain perplexed as to why management is continuing to refuse to give it to SEC employees." Gilman further stated, "The Union notes that the FDIC, which quickly and voluntarily gave this retro benefit to its employees last year, is at the top of the Best Places to Work ratings."

In the arbitration, the Union is asking for make whole relief for impacted employees, including, but not limited to, retroactive payment of transportation subsidy benefits up to $240 per month for the months of January 2012 through February 2013, minus any monthly benefit amount already provided; interest on such amounts; attorney’s fees; an order to cease and desist from violating the parties’ collective bargaining agreements; a posting; and all other appropriate relief. 

The Union will continue to keep you posted on the progress of this matter.