EMPLEO Act

II 117TH CONGRESS 1ST SESSION S. 841 To decrease the cost of hiring, and increase the take-home pay of, Puerto Rican workers. IN THE SENATE OF THE UNITED STATES MARCH 18, 2021 Mr. RUBIO introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To decrease the cost of hiring, and increase the take-home pay of, Puerto Rican workers. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Economic Mobility for 4 Productive Livelihoods and Expanding Opportunity Act of 5 2021’’ or the ‘‘EMPLEO Act’’. 6 SEC. 2. FEDERAL MINIMUM WAGE REQUIREMENT FOR ELI- 7 GIBLE PUERTO RICO EMPLOYEES. 8 Section 6(a) of the Fair Labor Standards Act of 9 1938 (29 U.S.C. 206(a)) is amended— 10 VerDate Sep 11 2014 22:14 Apr 10, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S841.IS S841 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 841 IS (1) by redesignating paragraphs (2) through 1 (4) as paragraphs (3) through (5), respectively; and 2 (2) by inserting after paragraph (1) the fol- 3 lowing: 4 ‘‘(2) if such employee is an eligible Puerto Rico 5 employee, as defined in section 6431(c) of the Inter- 6 nal Revenue Code of 1986, who receives a qualified 7 wage subsidy payment under section 6431 of such 8 Code from a participating employer, $5.00 an hour 9 (as determined without regard to the qualified wage 10 subsidy payment);’’. 11 SEC. 3. WAGE SUBSIDY FOR PUERTO RICO WORKERS. 12 (a) IN GENERAL.—Subchapter B of chapter 65 of the 13 Internal Revenue Code of 1986 is amended by adding at 14 the end the following new section: 15 ‘‘SEC. 6431. WAGE SUBSIDY FOR PUERTO RICO WORKERS. 16 ‘‘(a) IN GENERAL.—In the case of a participating 17 employer which makes qualified wage subsidy payments 18 to eligible Puerto Rico employees, such participating em- 19 ployer shall be treated for purposes of this title as having 20 paid to the Secretary, on the date any such qualified wage 21 subsidy payment is paid, payroll taxes in an amount equal 22 to such wage subsidy payment. 23 ‘‘(b) PARTICIPATING EMPLOYER.— 24 VerDate Sep 11 2014 22:14 Apr 10, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S841.IS S841 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 841 IS ‘‘(1) IN GENERAL.—For purposes of this sec- 1 tion, the term ‘participating employer’ means an em- 2 ployer which— 3 ‘‘(A) elects the application of this section, 4 ‘‘(B) makes qualified wage subsidy pay- 5 ments to all eligible Puerto Rico employees of 6 such employer, 7 ‘‘(C) provides to each eligible Puerto Rico 8 employee (in such form and manner as the Sec- 9 retary shall by regulations prescribe) informa- 10 tion about the amount of qualified wage subsidy 11 payments paid to such employee at the time 12 such payments are made, and 13 ‘‘(D) in the case of an employer which 14 elects to receive an advance payment under sub- 15 section (g), provides to the Secretary the infor- 16 mation described in paragraph (2) not later 17 than 30 days before the beginning of the appli- 18 cable period. 19 ‘‘(2) INFORMATION REQUIRED.—The informa- 20 tion required under this paragraph is the following: 21 ‘‘(A) An estimate of the number of workers 22 who will be employed by the participating em- 23 ployer for the applicable period. 24 VerDate Sep 11 2014 22:14 Apr 10, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S841.IS S841 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 841 IS ‘‘(B) An estimate of the payroll taxes (de- 1 termined without regard to any increase in tax 2 under section 3111 by reason of subsection 3 (g)(2)) that will be paid by the participating 4 employer with respect to all employees for such 5 applicable period. 6 ‘‘(C) An estimate of the number of eligible 7 Puerto Rico employees who will be employed by 8 the participating employer for such applicable 9 period and the hourly rate of pay for each such 10 employee (determined without regard to any 11 qualified wage subsidy payment). 12 ‘‘(D) An estimate of the aggregate amount 13 of qualified wage subsidy payments that will be 14 paid by such employer to eligible Puerto Rico 15 employees for such applicable period. 16 ‘‘(3) FAILURE TO MAKE SUBSIDY PAYMENTS.— 17 For purposes of this title (including penalties), the 18 failure by any employer which makes an election 19 under paragraph (1)(A) to make any qualified wage 20 subsidy payment at the time provided therefor shall 21 be treated as the failure at such time to deduct and 22 withhold under section 3102 an amount equal to the 23 amount of such qualified wage subsidy payment. 24 VerDate Sep 11 2014 22:14 Apr 10, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S841.IS S841 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 841 IS ‘‘(c) ELIGIBLE PUERTO RICO EMPLOYEE.—For pur- 1 poses of this section, the term ‘eligible Puerto Rico em- 2 ployee’ means, with respect to any calendar year, any indi- 3 vidual who— 4 ‘‘(1) is a citizen of the United States, 5 ‘‘(2) has a social security number issued to the 6 individual by the Social Security Administration, 7 and 8 ‘‘(3) certifies, in such form and manner as pro- 9 vided by the Secretary, to the employer that such in- 10 dividual is a resident of Puerto Rico and intends to 11 remain a resident of Puerto Rico for not less than 12 the next 6 months. 13 ‘‘(d) QUALIFIED WAGE SUBSIDY PAYMENT.—For 14 purposes of this section— 15 ‘‘(1) IN GENERAL.—The term ‘qualified wage 16 subsidy payment’ means, with respect to any eligible 17 Puerto Rico employee for any period, a payment 18 equal to 50 percent of the excess (if any) of— 19 ‘‘(A) the median hourly wage for Puerto 20 Rico, over 21 ‘‘(B) the hourly wage paid to the eligible 22 Puerto Rico employee. 23 VerDate Sep 11 2014 22:14 Apr 10, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S841.IS S841 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 841 IS ‘‘(2) MEDIAN HOURLY WAGE FOR PUERTO 1 RICO.—For purposes of paragraph (1)(A), the me- 2 dian hourly wage for Puerto Rico is— 3 ‘‘(A) $10 for calendar years 2022 and 4 2023, and 5 ‘‘(B) for any calendar year beginning after 6 2023, the amount determined by the Bureau of 7 Labor Statistics based on the most recent data 8 available as of 30 days before the start of such 9 calendar year. 10 ‘‘(3) DETERMINATION OF HOURLY WAGE.—For 11 purposes of paragraph (1)(B)— 12 ‘‘(A) IN GENERAL.—The hourly wage of 13 any employee shall be determined without re- 14 gard to any qualified wage subsidy payment 15 under this section. 16 ‘‘(B) PERIOD.—Each hour at which an eli- 17 gible Puerto Rico employee performs services 18 for a different rate of pay shall be treated as 19 a separate period. 20 ‘‘(C) SALARIED EMPLOYEES.—In the case 21 of a salaried employee, the hourly wage for such 22 employee for any period shall be determined by 23 dividing the annual rate of pay for such period 24 by 2,080. 25 VerDate Sep 11 2014 22:14 Apr 10, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S841.IS S841 pamtmann on DSKBC07HB2PROD with BILLS 7 •S 841 IS ‘‘(e) PAYROLL TAXES.—For purposes of this section, 1 the term ‘payroll taxes’ means— 2 ‘‘(1) amounts required to be deducted for the 3 payroll period under section 3102 (relating to FICA 4 employee taxes), and 5 ‘‘(2) amounts of the taxes imposed for the pay- 6 roll period under section 3111 (relating to FICA em- 7 ployer taxes). 8 ‘‘(f) OTHER DEFINITIONS AND SPECIAL RULES.— 9 For purposes of this section— 10 ‘‘(1) APPLICABLE PERIOD.—For purposes of 11 this section, the term ‘applicable period’ means— 12 ‘‘(A) except as provided in subparagraph 13 (B), a calendar quarter, and 14 ‘‘(B) in the case of any employer which 15 files returns for payroll taxes less frequently 16 than quarterly, such period as determined by 17 the Secretary under regulations. 18 ‘‘(2) WAGE SUBSIDY PAYMENTS IN EXCESS OF 19 PAYROLL TAX LIABILITY.—To the extent that the 20 amount treated as paid under subsection (a) exceeds 21 the amount of such person’s liability for payroll 22 taxes, the Secretary shall credit and refund such ex- 23 cess in the same manner as if it were an overpay- 24 ment of such taxes. 25 VerDate Sep 11 2014 22:14 Apr 10, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S841.IS S841 pamtmann on DSKBC07HB2PROD with BILLS 8 •S 841 IS ‘‘(g) ADVANCED PAYMENTS FOR CERTAIN PARTICI- 1 PATING EMPLOYERS.— 2 ‘‘(1) IN GENERAL.—In the case of a partici- 3 pating employer which elects the application of this 4 subsection, the Secretary shall pay to such partici- 5 pating employer, not later than the first day of the 6 applicable period, an amount equal to the excess 7 of— 8 ‘‘(A) the aggregate amount of qualified 9 wage subsidy payments for such applicable pe- 10 riod (as determined based on estimates sub- 11 mitted under subsection (b)(2)), exceeds 12 ‘‘(B) the aggregate amount of payroll taxes 13 (determined without regard to any increase in 14 tax under section 3111 by reason of paragraph 15 (2) and based on estimates submitted under 16 subsection (b)(2)) for such applicable period. 17 ‘‘(2) TREATMENT OF PAYMENTS.—For pur- 18 poses of this title, the amount of taxes imposed 19 under section 3111 on any participating employer 20 for any calendar quarter shall be increased by an 21 amount equal to any payment made under para- 22 graph (1) with respect to such calendar quarter.’’. 23 (b) SOCIAL SECURITY TRUST FUNDS HELD HARM- 24 LESS.—In determining the amount of any amount trans- 25 VerDate Sep 11 2014 22:14 Apr 10, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S841.IS S841 pamtmann on DSKBC07HB2PROD with BILLS 9 •S 841 IS ferred or appropriated to any fund under the Social Secu- 1 rity Act, section 6431 of the Internal Revenue Code of 2 1986 shall not be taken into account. 3 (c) CONFORMING AMENDMENT.—The table of sec- 4 tions for subchapter B of chapter 65 of the Internal Rev- 5 enue Code of 1986 is amended by adding at the end the 6 following new item: 7 ‘‘Sec. 6431. Wage subsidy for Puerto Rico workers.’’. (d) OTHER PROVISIONS.— 8 (1) REPORTING OF WAGE SUBSIDY INFORMA- 9 TION.—Section 6051(a) of the Internal Revenue 10 Code of 1986 is amended by striking ‘‘and’’ at the 11 end of paragraph (16), by striking the period at the 12 end of paragraph (17) and inserting ‘‘, and’’, and by 13 inserting after paragraph (17) the following new 14 paragraph: 15 ‘‘(18) in the case of an eligible Puerto Rico em- 16 ployee (as defined in section 6431), the amount of 17 any qualified wage subsidy payment paid to such 18 employee.’’. 19 (2) PENALTY FOR FAILURE TO PROVIDE INFOR- 20 MATION TO EMPLOYEES.—Section 6652 of such 21 Code is amended by adding at the end the following 22 new subsection: 23 ‘‘(q) FAILURE TO REPORT WAGE SUBSIDY INFORMA- 24 TION TO EMPLOYEES.—In the case of a failure to provide 25 VerDate Sep 11 2014 22:14 Apr 10, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S841.IS S841 pamtmann on DSKBC07HB2PROD with BILLS 10 •S 841 IS the information required under section 6431(b)(1)(C) at 1 the time required for providing such information, there 2 shall be paid (upon notice and demand by the Secretary 3 and in the same manner as tax) by the person failing to 4 provide such information, an amount equal to $50 for each 5 such failure. In the case of any failure due to negligence 6 or intentional disregard, the preceding sentence shall be 7 applied by substituting ‘$100’ for ‘$50’.’’. 8 (e) EFFECTIVE DATE.—The amendments made by 9 this section shall apply to wages paid after December 31, 10 2021. 11 Æ VerDate Sep 11 2014 22:14 Apr 10, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6301 E:\BILLS\S841.IS S841 pamtmann on DSKBC07HB2PROD with BILLS