WASHINGTON—U.S. Senators Dick Durbin (D-IL) and Sherrod Brown (D-OH) introduced a pair of bills to encourage corporations to invest in their workers. The Patriot Employer Tax Credit Act would provide a tax credit to companies that provide fair wages and good benefits to workers. This is the first bill introduced by Durbin in the 116th Congress. The Corporate Freeloader Fee would levy a fee on large mega-corporations that are often extremely profitable yet pay their workers poorly.
“In America, if you work full-time you should be able to support your family—you should be paid a living wage, have access to quality health insurance and paid leave, and be able to save for retirement. However, far too often, employers are more focused on returning profits to their wealthy shareholders and executives than doing the right thing for the American workers and the American communities they rely upon,” said Durbin. “We should reward companies that exemplify American values by treating their workers fairly and keep jobs here in our country. I thank Senator Brown for championing this issue with me.”
“The President’s tax law rewards Wall Street and corporations that ship jobs overseas at the expense of American workers. These bills will put workers first and encourage companies to invest in good-paying American jobs,” said Brown.
Under the Patriot Employer Tax Credit Act, Patriot Employers would receive a tax credit up to $1,500 per employee if they meet the following criteria:
- Invest in American Jobs: Maintain headquarters in the U.S. if the company has ever been headquartered in America, maintain or increase the number of workers in the U.S. compared to the number of workers overseas and independent contractors, and has not inverted to avoid U.S. taxes.
- Pay Fair Wages: Pay at least 90 percent of U.S. workers an hourly wage equal to 218 percent of federal poverty for an individual (about $15/hour).
- Provide Quality Health Insurance: Offer Affordable Care Act compliant health care to employees.
- Prepare Workers for Retirement: Provide 90 percent of non-highly compensated U.S. employees a defined benefit plan OR a defined contribution plan and contribute at least 5 percent of worker compensation.
- Support Our Troops and Veterans: Pay the difference between regular salary and military compensation for all National Guard and Reserve employees called for active duty and have a plan in place to recruit veterans.
- Create a Diverse Workforce: Have a plan in place to recruit employees with disabilities.
- Support Working Families: Provide paid sick or family and medical leave to fulltime employees.
In recognition of the different business circumstances that small employers face, companies with fewer than 50 employees could qualify for the tax credit by fulfilling a subset of these criteria.
The Patriot Employer Tax Credit Act is endorsed by Communications Workers of America (CWA) and Economic Policy Institute.
The Corporate Freeloader Fee applies only to mega-corporations who file at least $100,000 in payroll taxes with the IRS daily for at least 180 days straight. The legislation levies a fee based on the number of employees at a company who earn less than 218 percent of the federal poverty rate for an individual. The fee increases as the percentage of a company’s workforce that earns less than a living wage goes up. Companies can reduce fees by providing health care benefits and making contributions to employee retirement plans.