Worker Dividend Act of 2018

Summary: Worker Dividend Act of 2018  This bill amends the Internal Revenue Code to impose a tax on certain publicly traded companies that have at least $250 million in U.S. earnings for the year, buy back securities during the year, and fail to pay employees a worker dividend.  An employer covered by the bill must pay to U.S. employees a worker dividend that totals at least the lesser of: (1) the amount paid by the employer to repurchase securities of the employer on the open market during the taxable year; or (2) 50% of the amount by which the employer's U.S. earnings before interest, taxes, depreciation, and amortization exceed $250 million.  Employers who fail to pay a required worker dividend are subject to a tax that is equal to the required dividend. The bill also specifies that the dividend must be distributed equally to employees and be paid in addition to compensation that the employer would ordinarily pay to employees.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Worker Dividend Act of 2018''.

SEC. 2. FAILURE OF EMPLOYER TO PAY WORKER DIVIDENDS.

    (a) In General.--Subtitle D of the Internal Revenue Code of 1986 is 
amended by inserting after chapter 36 the following new chapter:

         ``CHAPTER 37--PROVISIONS RELATING TO WORKER DIVIDENDS

``Sec. 4501. Failure of employer to pay worker dividends.

``SEC. 4501. FAILURE OF EMPLOYER TO PAY WORKER DIVIDENDS.

    ``(a) General Rule.--If, for a taxable year in which a covered 
employer repurchases any securities of the employer on the open market, 
the covered employer fails to pay to its employees a worker dividend 
meeting the requirements of subsection (b), then there is hereby 
imposed on the covered employer a tax equal to the lesser of the 
amounts determined under subparagraphs (A) and (B) of subsection 
(b)(1).
    ``(b) Worker Dividend.--For purposes of this section--
            ``(1) In general.--The term `worker dividend' means a 
        payment made by a covered employer to employees of the employer 
        at locations in the United States, if the total of all such 
        payments made during the taxable year is not less than the 
        lesser of--
                    ``(A) the amount paid by the employer to repurchase 
                securities of the employer on the open market during 
                the taxable year, and
                    ``(B) 50 percent of the amount by which the 
                earnings before interest, taxes, depreciation, and 
                amortization of the employer during the taxable year in 
                the United States exceed $250,000,000.
            ``(2) Payments to be in addition to compensation.--Such 
        term shall not include any payment unless such payment is in 
        addition to, and (including by election of the employee) is not 
        included in (except as provided in paragraph (5)) or 
        substituted for, any cash or other compensation ordinarily paid 
        to the employee by the employer.
            ``(3) Payments to be equal.--Such term shall not include 
        any payment unless the amount of the payment made to each 
        employee of the employer in the United States is of an equal 
        amount. Notwithstanding the preceding sentence, in the case of 
        an employee employed at less than full time, the payment to 
        such employee may be in a pro rata amount based on the hours 
        worked by the employee per week.
            ``(4) Timing of payment.--Such term shall not include any 
        payment which is not made within 60 days of the close of the 
        taxable year to which it relates.
            ``(5) Option to increase compensation.--A covered employer 
        may, by providing such documentation as the Secretary may 
        require, elect to have the worker dividend paid to employees in 
        the form of an increase in regular compensation. In the case of 
        a covered employer making such election--
                    ``(A) paragraph (4) shall not apply, and
                    ``(B) the term `worker dividend' includes only 
                increases in compensation which are so documented and 
                which are paid within 1 calendar year of the date the 
                increase goes into effect.
    ``(c) Covered Employer.--For purposes of this section, the term 
`covered employer' means, for any taxable year, any entity the stock of 
which is publicly traded.
    ``(d) Aggregation Rule.--All persons treated as a single employer 
under subsection (a) or (b) of section 52 shall be treated as a single 
employer for purposes of determining whether an individual is an 
employee of a covered employer.
    ``(e) Regulations.--The Secretary, in consultation with the 
Secretary of Labor, shall promulgate regulations or other guidance to 
ensure compliance with this section, including the determination of 
full time status and rules to prevent avoidance of the purposes of 
subsection (b)(2).
    ``(f) Reporting.--With respect to any taxable year in which a 
covered employer repurchases any securities of the employer on the open 
market, not later than the due date for the return of tax for such 
taxable year such employer shall report to the Secretary and the 
Chairman of the Securities and Exchange Commission, in such manner as 
the Secretary shall determine, the amount of any worker dividend paid 
during such taxable year and any other information as the Secretary 
shall require.''.
    (b) Clerical Amendment.--The table of chapters for subtitle D of 
the Internal Revenue Code of 1986 is amended by inserting after the 
item relating to chapter 36 the following new item:

        ``Chapter 37--Provisions Relating to Worker Dividends''.

    (c) Effective Date.--The amendments made by this section shall 
apply to repurchases of employer securities in taxable years beginning 
after the date of the enactment of this Act.