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Driving Factor

Keep gas prices from pushing employees over the edge.

It's getting harder for the average worker to get by. Real wages pay after inflation is factored in--haven't increased in almost four years, thanks in part to higher gas prices.

Some employers are zooming in to help. According to the Society for Human Resource Management, roughly 28 percent of employers are offering employees gas gift certificates, bicycles and increased federal mileage reimbursement rates.

Some small employers are also taking advantage of a federal law that lets workers use up to $105 of their monthly income tax-free to buy bus, train, carpool and ferry passes. This year, RoseWater Engineering, a Seattle civil engineering consulting firm, started offering a transportation benefit so its 35 employees can purchase bus passes on a pretax basis. So far, 20 employees have signed up. "We're providing a system that allows them to save money," says founder Amy Haugerud, 52.

The risk of such benefits is that employees may see them as a permanent entitlement, request additional benefits or want cash instead, says Jim Brennan, a senior associate at the Economic Research Institute, a Redmond, Washington, salary survey research firm. Offering a transportation benefit, however, can be a good option for very small companies that can't commit to long-term perks like bonuses and equity. Haugerud, whose company has more than $3 million in sales, says the benefit hasn't created problems so far, and it's helped RoseWater's recruiting and retention efforts: "We can't afford not to [offer it]."

Chris Penttila is a Washington, DC-based freelance journalist who covers workplace issues on her blog, Workplacediva.blogspot.com.

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This article was originally published in the December 2006 print edition of Entrepreneur with the headline: Driving Factor.

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