A group of House lawmakers, led by Rep. Lloyd Smucker (R-PA) have introduced legislation that seeks to update and strengthen the Work Opportunity Tax Credit (WOTC).
The Improve and Enhance the Work Opportunity Tax Credit Act would update the WOTC, which has not been changed since its enactment 27 years ago and encourage longer-service employment.
The WOTC provides federal tax credit to employers who invest in workers who have consistently faced barriers to employment, including eligible veterans, SNAP recipients, individuals with disabilities, and long-term unemployed individuals. Employers incur higher recruitment and training costs to reach WOTC eligible populations and support their successful transition back into employment.
This bipartisan bill would increase the current credit percentage from 40 percent to 50 percent of qualified wages. It would also add a second level of credit for employees who work 400 or more hours. In addition, the bill eliminates the arbitrary age cap at which SNAP recipients are eligible for WOTC. This provision seeks to provide an incentive to hire older workers and better align the credit with the work reforms adopted in the debt ceiling negotiations in 2023.
“Connecting individuals to great-paying jobs through a strengthened Work Opportunity Tax Credit will grow our economy and reduce long-term unemployment. We know that the best anti-poverty program is a good job. I thank my colleagues for joining me in introducing the pro-growth Improve and Enhance the Work Opportunity Tax Credit Act on a bipartisan basis,” Smucker said.
The bill is also sponsored by Reps. Terri Sewell (D-AL), Brian Fitzpatrick (R-PA), Steven Horsford (D-NV), and Mike Kelly (R-PA).
“As Americans continue to return to the workforce, employers need a modern tool to help recruit and retain individuals seeking long-term employment opportunities,” Sewell said. “I am proud that this legislation builds upon the prior successes of Work Opportunity Tax Credit while factoring in the twenty-five years of economic change our country has seen since its enactment.”
The bill has the support of several organizations, including the National Employment Opportunity Network, Critical Labor Coalition, National Restaurant Association, Retail Industry Leaders Association, National Grocers Association, International Franchise Association, American Health Care Association, American Hotel & Lodging Association, American Seniors Housing Association, American Staffing Association, the Family League of Baltimore, National Beer Wholesalers Association, and FMI – The Food Industry Association.
“FMI – The Food Industry Association applauds Representatives Lloyd Smucker and Terri Sewell for their leadership in improving the Work Opportunity Tax Credit (WOTC). WOTC is an important workforce-building tool, utilized by our grocery, wholesaler, and product supplier members, to hire individuals facing barriers to employment. FMI is pleased to support this bipartisan effort to strengthen the path for veterans, SNAP participants, justice-involved individuals, and others to obtain meaningful employment in the food industry,” Christine Pollack, FMI vice president, government relations, said.