On Senate Floor, Portman Highlights Tax Incentives to Ensure Healthy Workplaces & Bolster Employment in Next COVID Response Package

July 29, 2020 | Press Releases

WASHINGTON, DC – Today on the Senate floor, U.S. Senator Rob Portman (R-OH) praised the inclusion in Senate Republicans’ HEALS COVID-19 response package of critical tax incentives that promote a safe and effective reopening of the U.S. economy by bolstering employment and ensuring healthy and safe workplaces. Specifically, the package announced by Leader McConnell contains Portman’s Healthy Workplaces Tax Credit Act he introduced last week. The bill is designed to help businesses and nonprofits continue to safely reopen while ensuring the safety of employees and consumers through a refundable tax credit against payroll taxes for 50 percent of the costs incurred by a business for increased testing, personal protective equipment (PPE), disinfecting, extra cleaning and reconfiguring work spaces to adhere to social distancing guidelines. Congressman Tom Rice (R-SC) has introduced this legislation in the House of Representatives.  

Portman also highlighted the inclusion in the new rescue package an expansion and repurposing of the Work Opportunity Tax Credit and the Employee Retention Credit from the CARES Act into a more encompassing employment or hiring credit to incentivize hiring and job creation, a reform for which Portman has advocated during this negotiation process. 

A transcript of the speech can be found below and a video can be found here.

“I’m here on the floor today to talk about some of the steps Congress should take in response to the coronavirus pandemic. I’m going to start with talking about the legislation the Majority Leader, Senator Mitch McConnell, introduced yesterday. One of the aspects of it that hasn’t gotten much attention, and I think is very positive and a very effective way to get the economy moving in a safe way is some tax legislation. These are tax credits and tax deductions that help to encourage the hiring of new workers, but also to do so in a safe way. These are the kinds of things that make a lot of sense and have a lot of bipartisan support and appeal so I think it should be a part of whatever final package we end up with. The goal of these tax incentives is to say that we want people to reenter the workforce but do it in a safe and sustainable way.  

“For example, in the McConnell proposal is legislation I had introduced called the Healthy Workplace Tax Credit Act. It’s very simple, it says there will be a credit on employer side of payroll taxes against qualified employee protection expenses and workplace reconfiguration expenses to ensure employers can afford additional safety measures. As I’m traveling around the state of Ohio, I see the Plexiglas dividers – you’ve probably seen those in offices where it’s a more open setting, you see it in a lot of retail places now. There’s a cost to that, but there’s also a cost to the personal protective gear – you know, the masks and the gowns and the gloves and the other things that people are needing in order to have a safe workplace. I’ve also seen, as I have been in some of the factories around Ohio, that they’ve had to reconfigure the factory space in order to provide more social distancing. At one plant I was at, a Ford plant, they had expanded the lunch room in order to provide more social distancing at the lunch room and that of course meant that there was less space for manufacturing. These are costs, and these are the kinds of things that could be part of this credit. So, my hope is that whether it’s the thermometer check or whether it’s more testing or whether it’s PPE or whether it’s more hand sanitizer, that we can encourage people to use these things by having a tax credit. 

It would provide immediate stimulus to the economy as well, which is a good thing because many businesses would be operating at a loss, not have taxable income but they have payroll tax liability and this is a credit to the payroll tax. It also applies, by the way, to nonprofits, as it should, and 501(c)(3)'s. I was at one of the drug and alcohol addiction entities in one of our counties the week before last and they had Plexiglas up and frankly they're hurting in terms of their budget right now but they felt like they had to have a safe place for people to work. We want everybody to have a safe place. We want people to go back to work and go back safely. So I commend Senator McConnell for including that bill in the CARES 2.0 package that was released this week.  

“This tax credit will support our efforts to make the workplace safe and healthy and to build consumer confidence that all the appropriate measures are being taken. It's important to get consumers back in the mix and whether it's people going back into a restaurant and feeling safe or going back into a retail establishment, if people feel safe, they're more likely to go back and this economy can get going again. So I think it's something, again, that both sides of the aisle should be able to support and it will show we're doing everything we can to get people back to a more normal life.  

“Second, with the unemployment rate still at about 11 percent, we need to encourage hiring and employee retention as this virus continues to affect our economy. In the McConnell proposal we have a way to create this incentive that builds on legislation that we've already passed in the form of the Work Opportunity Tax Credit. This is an existing law that gives employers an incentive to hire individuals who might not otherwise be able to get a job. Categories now include, as an example, our veterans, so if you are a veteran, having a tough time getting a job, you can go through the Work Opportunity Tax Credit, the employer can get a credit for hiring you initially. By the way, almost everyone I’ve talked to say they end up hiring these people full time, paying them their full wages, but in the meantime they get a credit to bring them on during a first transition period. So it works. 

“Another category, as an example, is folks who have been out of prison, second chance individuals, have a chance under the Work Opportunity Tax Credit – WOTC -- to be able to get a job. So we have proposed adding a new category which is qualified COVID-19 employees, those who are on unemployment insurance immediately prior to their hiring date. It increases the Work Opportunity Tax Credit amount for this new targeted group of individuals from 40 percent to the first $6,000 in wages to 50 percent for the first $10,000 in qualified wages. So again, it encourages us to help get people from unemployment insurance back to work. Let's say they work for a company that's not going back because of COVID-19. Let's say it's a movie theater or bowling alley or maybe it's a bar. Those individuals would qualify.  

“Third, I support a proposal in this McConnell draft that builds on what's called the Employee Retention Tax Credit. That's already in law. We put it in law in the first CARES Act. The credit was a good start but it needs to be updated and expanded given the course of our economy since March and what's happened with the coronavirus. This credit applies to employers who have operations partially or fully suspended due to COVID-19 and any related government order saying that you've got to shut down, but chose to retain their affected employees. It's a credit that increases from the CARES one, from 50 to 65 percent for employee, from $10,000 under current law for the whole year to $10,000 per quarter. It also helps businesses that have had a 25 percent decline in revenues, not a 50 percent decline in revenue. So it’s this group of companies who may not have qualified for a PPP credit or a PPP loan, they may not have gotten one, but they're having a tough time keeping their workers. This will encourage them to keep those workers and bring on new workers. Again, it's the kind of support that our workforce needs as the economy reopens, and companies resume ramping up operations. It helps to bring people off the employment rolls, it's a pull into the workforce and that's a good thing.  

“These are common-sense proposals. What's more, they've been, historically, policies that have had bipartisan support. I worked with my friend Senator Ben Cardin on the other side in designing the Employee Retention Credit back in March, and expanding the Opportunity Tax Credit has always had bipartisan support. On the Healthy Workplace Tax Credit, Senator Sinema has a similar bill. Goes a little further but it's very similar. I see no reason why we can't take what we all agree with works and make it even better in this new package. Again, these tax incentives are the kind of bipartisan consensus-builders that we ought to be looking at right now to get us to a new package and hopefully by the end of this week. We have to ensure, I think all of us agree, the safe reopening of our economy and these tax revisions do that.”