Senators Introduced Bill Providing Tax Incentives for Offering Paid Leave

As more states institute mandatory paid leave laws, two U.S. Senators have introduced legislation that would provide employers with a tax incentive for offering paid time off. On July 16, Senators Deb Fischer (R-NE) and Angus King (I-ME) introduced the Strong Families Act (S. 2618), a bipartisan measure that would create a 25% non-refundable employer tax credit for each hour of paid leave provided to employees, capped at $4,000 per year for each qualified employee.  To be eligible, the employer must offer at least four weeks of paid leave.  Such leave would have to be available on an hourly basis, and distinct from vacation or sick leave. Employers of any size would qualify for the tax credit.  Finally, the bill includes anti-retaliation provisions. 

In a press release, Sen. Fischer said: 

This hourly paid leave proposal provides families with the flexibility to take paid time to meet family medical and caregiving obligations. Importantly, our bipartisan plan is also a balanced measure that respects employers’ costs of doing business with employee needs. The Strong Families Act creates a meaningful incentive structure to encourage employers to provide working families, including hourly workers, the chance to take paid time off. This plan will strengthen our families, our communities, and our nation. 

A summary of the measure can be accessed here

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.