Whether mandatory or optional, the provisions for covering home-workplace transport costs have been made more flexible in the amended finance law for 2022 in order to encourage employers, in a context of rising fuel prices, to go beyond their obligations.

Questions related to the extent to which the employer should cover transportation costs have also arisen for judges in the context of urban migration and the development of telecommuting, which were amplified by the Covid pandemic.

Reminder of the existing systems

(i) A compulsory system: payment of public transport passes

Employers must pay 50% of the cost of subscriptions taken out by their employees for the entire journey between their usual place of residence and their place of work using public transport services, even if several subscriptions are required to make this journey (Article L 3261-2 of the French Labor Code). This also applies to public bicycle rental services.

(ii) Two optional schemes

• The transportation bonus: this allows the employer to pay for all or part of the fuel or power costs of non-thermal vehicles for employees who meet one of the following two conditions:

• The employee's usual place of residence or workplace must be in a town not served by a regular public transport service and must not be included in a compulsory mobility plan (scheme for towns with more than 100,000 inhabitants)
• Given the particular working hours that do not allow the use of public transport, the use of a personal vehicle is essential (Art. L 3261-3 of the French Labor Code)

• The sustainable mobility package: this allows the employer to pay for all or part of the costs of alternative transport, known as soft mobility (e.g., bicycles, scooters or carpooling) (L 3261-3-1 of the French Labor Code).

In a question-and-answer document posted online on September 5, the Ministry of Energy Transition details the payment methods that can be used for this package:

• A lump sum payment conditional on cycling
• A lump sum per kilometer driven or per number of days of practice
• A contribution to actual expenses (purchase or rental of a bicycle, accessories, subscription to a secure bicycle parking, etc.)
• For carpooling: coverage of expenses incurred as part of the cost sharing between the driver and passengers.

The amount, terms and criteria for the allocation of these two schemes are set by company agreement or, failing that, by industry agreement or, in the absence of an agreement, by a unilateral decision of the employer after consultation of the CSE.

Each of these two schemes was exempt from taxes and contributions and from CSG/ CRDS up to a limit of 500 euros, it being specified that in the case of a combination of the two schemes, the exemption limits are not cumulative.

Flexibility in existing schemes

This flexibility takes the form of extending the number of employees eligible for the transport bonus, a new possibility of combining existing schemes and also raising the exemption limits.

(i) The transport bonus is open to all employees

For the years 2022 and 2023, all employees incurring fuel or power costs for travel between their usual residence and their place of work are now eligible for the transportation bonus without having to meet the requirements of Article L.3261-3 of the French Labor Code.

Thus, the transport bonus is now open to all employees, even those who have the possibility of using public transport.

(ii) It is now possible to combine the transport bonus with a public transport pass

While article L 3261-3 expressly prohibits the combination of the transport bonus and the reimbursement of the public transport pass, the combination of the transport bonus and the sustainable mobility package is now permitted

The amending finance law authorizes this accumulation for the years 2022 and 2023.

(iii) Increase in the exemption limits

• For the two optional devices

For the years 2022 and 2023, the tax and social security exemption ceilings for the transport bonus and the sustainable mobility package have been raised from 500 euros to 700 euros, including 400 euros (compared to 200 euros previously) for fuel costs.

• In case of combination of a sustainable mobility pass and a public transport pass

The ceiling for tax and social security exemptions has been raised from 600 to 800 euros.

Unlike the other flexibility measures, which are limited to the years 2022 and 2023, this increase in the exemption limit is not limited in time.

• The employer's contribution to the cost of public transport passes beyond the mandatory 50%.

For the years 2022 and 2023, the employer's contribution, beyond the mandatory 50% of the public transport pass, is exempt from social charges.

However, this exemption is limited to a maximum of 75%.

The employer's coverage of transportation costs

The lockdown imposed by the Covid pandemic, but also the development of digital tools, have allowed the emergence of new forms of work which may raise issues with regard to the employer's obligations in terms of coverage of transport costs.

(i) Does the employer have to cover the transportation costs of an employee who has chosen to move to the provinces during the pandemic?

In a decision dated July 5, 2022, the Judicial Court ordered an employer to pay the transportation costs of an employee who had established his principal residence in the provinces, on the occasion of the first lockdown.

The employer had refused to pay for the transportation costs on the grounds that the company's internal rules limited the payment to journeys of a maximum of four hours per day to and from work (not including public transport from the station to the workplace).

For the Court, by inserting a criterion of maximum geographical distance between the usual residence and the place of work, the employer had added a condition that is not provided for by law, by regulations or by the collective bargaining agreements applicable in the company.

In terms of reimbursement of transportation costs, case law consistently refers to the notion of "usual residence" to determine whether or not transportation costs (e.g., province - Paris) should be covered by the employer.

According to case law, the usual residence is the one in which the employee has established his family life.

(ii) Does the employer have to pay for the transportation costs of his telecommuting employee?

The prevailing principle is that the employer is obliged to pay half the cost of the public transport pass taken out by the employee for travel between his or her usual place of residence and the workplace.

Does this obligation remain if the employee teleworks?

The telecommuting employee will be entitled to reimbursement of his or her public transport pass if he or she uses it for travel between home and work and if the provisions of Article L 1214-3 of the French Labor Code are respected.

Article L 1222-9 of the French Labor Code establishes the principle that "the teleworker has the same rights as the employee who performs his work in the company's premises".

However, the question could arise if the employee works exclusively from home.

Neither the French Supreme Court nor the administration has yet ruled on such a case.

However, if the employee is required to travel to the company's premises (for meetings, for example), the employer would be obliged to reimburse the employee's travel expenses in accordance with the legal requirements.