Washington, D.C. – Today, Congressman Tom Emmer (MN-06) joined a bipartisan group of lawmakers to introduce legislation to promote workers’ long-term economic success and support U.S. economic recovery efforts amid the COVID-19 pandemic.
The Investing in American Workers Act of 2021 prioritizes workers in U.S. recovery efforts by creating a tax credit to incentivize employers to invest in training tied to recognized postsecondary credentials for lower- and moderate-income workers. Companion legislation has been introduced in the United States Senate by Sen. Warner and Sen. Stabenow.
“A four-year college degree should not, and cannot, be the only path to a successful career or financial security. This bipartisan legislation will promote apprenticeships and build a stronger American workforce. Although our nation continues to face a skills-gap, on-the-job educational and technical training opportunities will help us bridge the divide while giving Americans opportunities to advance their careers. I am proud to join Rep. Krishnamoorthi in this effort to ensure Americans have access to good-paying jobs when they need it more than ever,” said Rep. Emmer.
“Today’s fast-paced economy demands regular training for our workforce to keep our economy competitive, yet the percentage of American workers receiving employer-sponsored and on-the-job training has decreased dramatically in recent decades,” said Rep. Krishnamoorthi. “The Investing In American Workers Act will ensure our workers are able to develop the in-demand skills they need to build rewarding careers while helping American companies grow and thrive.”
“As too many families know, the COVID-19 crisis has taken a major toll on the American workforce, pushing millions of workers into unemployment and decimating jobs that, frankly, may never come back. That’s why we need companies – especially those that employ a lot of low-wage workers – to be equal partners in the recovery effort by stepping in and offering training opportunities that grow workers’ skills for years to come,” said Sen. Warner. “We’re introducing a bill that builds upon the success of the R&D tax credit model and gives companies an incentive to invest in people, like they do R&D, to give more workers a chance to succeed during and after COVID-19.”
“In Michigan, our workers are the best in the world and investing in them is the right thing to do. Our bipartisan bill does just that by supporting employers who offer training opportunities that grow workers’ skills for years to come,” said Sen. Stabenow.
Right now, many companies have almost no direct financial incentive to invest in their workers. In fact, the current U.S. tax code offers a Research and Development (R&D) tax credit for employers that make long-term investments in innovation – such as computers, buildings, and machines – but not workers. In order to ensure the nation’s workforce is better prepared for a post-pandemic 21st century economy, tax and accounting systems need to be updated to promote these same kinds of investments in workforce training.
The Investing in American Workers Act of 2021 would make it easier for companies to invest in training their workers by:
- Establishing a tax credit for employers who increase their spending on worker training:
- Employers who spend more on training their workers in a given year than they have on average in the previous three years are eligible to receive a tax credit based on their increase in spending.
- The amount of the credit is equal to 20 percent of the increased spending. The spending eligible for the credit must be used to provide qualified training to employees earning $82,000 or less per year.
- For employers who are new to spending on qualified training or have a gap in any of the past three taxable years, the credit is calculated as 10 percent of the qualified training expenditures for the current year, multiplied by a cost-of-living adjustment factor. Requires collecting and reporting of racial, ethnic, and gender demographics.
- Incentivizing high-quality training by detailing allowable providers and programs:
- Qualified training may be provided through a nationally or state-recognized registered apprenticeship program; a WIOA-certified training program; a program conducted by an area career and technical education school, community college, or labor organization; or a program sponsored or administered by an employer, industry trade association, industry or sector partnership, or labor organization.
- Qualified training must result in the completion of a recognized postsecondary credential, including an industry-recognized certificate or certification, a certificate of completion of an apprenticeship, a license recognized by the State or Federal Government, or an associate or bachelor’s degree.
- Pursuing clarity on the statutory definition of recognized postsecondary credential:
- Requires the Secretary of Labor, in consultation with the Secretary of the Treasury, to issue regulations or guidance on the definition of “recognized postsecondary credential” within one year.
- Encouraging small businesses to upskill their workers by providing a simplified filing process and allowing them to apply the credit against payroll and alternative minimum taxes:
- Qualified small businesses making less than $5,000,000 for at least six years in a row, as well as qualified tax-exempt entities, can elect to apply up to $250,000 of the credit against payroll taxes.
“U.S. businesses – including small and medium sized employers – are investing every day in the skills of their workforce, helping their employees advance their careers and creating new job opportunities in our communities. But today’s tax code doesn’t adequately reward those companies that are willing to make these critical investments, making it harder for businesses to compete in a global economy,” said Katie Spiker, Director of Government Affairs for the National Skills Coalition. “Sen. Warner’s and Rep. Krishnamoorthi’s legislation is an important step in the right direction, and will help expand high quality training that leads to better results for companies and workers alike. We look forward to working with Senator Warner and Rep. Krishnamoorthi to advance this legislation and we applaud his leadership and vision on this vital issue.”
Bill text is available here. A summary of the bill is available here.