SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Older Worker Opportunity Act of 
2007''.

SEC. 2. TAX CREDIT FOR EMPLOYING OLDER WORKERS IN FLEXIBLE WORK 
              PROGRAMS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following new section:

``SEC. 45O. FLEXIBLE WORK CREDIT.

    ``(a) In General.--For purposes of section 38, in the case of an 
eligible employer, the flexible work credit determined under this 
section for the taxable year shall be equal to 25 percent of the 
qualified wages for such taxable year.
    ``(b) Eligible Employer.--For purposes of this section, the term 
`eligible employer' means an employer which--
            ``(1) maintains a qualified trust (within the meaning of 
        section 401(a)), and
            ``(2) provides health insurance coverage (as defined in 
        section 9832(b)(1)(A)) to employees and pays no less than 60 
        percent of the cost of such health insurance coverage with 
        respect to each full-time employee receiving such coverage.
    ``(c) Qualified Wages Defined.--For purposes of this section--
            ``(1) Qualified wages.--The term `qualified wages' means 
        the wages paid or incurred by an eligible employer during the 
        taxable year to eligible individuals.
            ``(2) Eligible individuals.--
                    ``(A) In general.--The term `eligible individual' 
                means an individual who, at the time such wages are 
                paid or incurred--
                            ``(i) has attained the age of 62, and
                            ``(ii) is participating in a formal 
                        flexible work program.
                    ``(B) Limitation.--Such term shall not include any 
                individual who begins participation in a formal 
                flexible work program during any period in which more 
                than 20 percent of the employees of the eligible 
                employer are already participating in a formal flexible 
                work program.
            ``(3) Wages.--
                    ``(A) In general.--The term `wages' has the meaning 
                given such term by subsection (b) of section 3306 
                (determined without regard to any dollar limitation 
                contained in such section).
                    ``(B) Other rules.--Rules similar to the rules of 
                paragraph (2) and (3) of section 51(c) shall apply for 
                purposes of this section.
                    ``(C) Termination.--The term `wages' shall not 
                include any amount paid or incurred to an individual 
                after December 31, 2010.
            ``(4) Only first $6,000 of wages per year taken into 
        account.--The amount of the qualified wages which may be taken 
        into account with respect to any individual shall not exceed 
        $6,000 per year.
    ``(d) Formal Flexible Work Program.--For purposes of this section--
            ``(1) In general.--The term `formal flexible work program' 
        means a program of an eligible employer--
                    ``(A) which consists of core time and flex time,
                    ``(B) under which core time does not exceed--
                            ``(i) 20 hours per week,
                            ``(ii) 3 days per week, or
                            ``(iii) 1,000 hours per year, and
                    ``(C) which meets the requirements of subsection 
                (e).
            ``(2) Core time.--The term `core time' means the specific 
        time--
                    ``(A) during which an employee is required to 
                perform services related to employment, and
                    ``(B) which is determined by the employer.
            ``(3) Flex time.--The term `flex time' means the time other 
        than core time--
                    ``(A) during which an employee is required to 
                perform services related to employment, and
                    ``(B) which is determined at the election of the 
                employee.
    ``(e) Requirements.--A program shall not be considered a formal 
flexible work program under this section unless such program meets the 
following requirements:
            ``(1) Duration of program.--The program shall allow for 
        participation for a period of at least 1 year.
            ``(2) No change in health care benefits.--With respect to a 
        participant whose work schedule is no less than 20 percent of 
        the work schedule of a similarly situated full-time employee--
                    ``(A) such participant shall be entitled to the 
                same health insurance coverage to which a similarly 
                situated full-time employee would be entitled,
                    ``(B) the employer shall contribute the same 
                percentage of the cost of health insurance coverage for 
                such participant as the employer would contribute for a 
                similarly situated full-time employee, and
                    ``(C) such participant shall be entitled to 
                participate in a retiree health benefits plan of the 
                employer in the same manner as a similarly situated 
                full-time employee, except that service credited under 
                the plan for any plan year shall be equal to the ratio 
                of the participant's work schedule during such year to 
                the work schedule of a similarly situated full-time 
                employee during such year.
            ``(3) No reduction in pension benefits.--
                    ``(A) Defined benefit plans.--
                            ``(i) A participant shall be entitled to 
                        participate in a defined benefit plan (within 
                        the meaning of section 414(j)) of the employer 
                        in the same manner as a similarly situated 
                        full-time employee.
                            ``(ii) Service credited to a participant 
                        under the plan for any plan year shall be equal 
                        to the ratio of the participant's work schedule 
                        during such year to the work schedule of a 
                        similarly situated full-time employee during 
                        such year.
                            ``(iii) If the plan uses final average 
                        earnings to determine benefits, final average 
                        earnings of the participant shall be no less 
                        than such earnings were before the participant 
                        entered the program.
                    ``(B) Defined contribution plans.--A participant 
                shall be entitled to participate in a defined 
                contribution plan (within the meaning of section 
                414(i)) of the employer in the same manner as a 
                similarly situated full-time employee, and the employer 
                shall match the participant's contributions at the same 
                rate that the employer would match the contributions of 
                a similarly situated full-time employee.
                    ``(C) No forfeiture of pension benefits.--The 
                pension benefits of a participant shall not be 
                forfeited under the rules of section 411(a)(3)(B) or 
                section 203(a)(3)(B) of the Employee Retirement Income 
                Security Act of 1974 with respect to a participant who 
                has attained normal retirement age as of the end of the 
                plan year.
            ``(4) Nondiscrimination rule.--Eligibility to participate 
        in the program shall not discriminate in favor of highly 
        compensated employees (within the meaning of section 414(q)).
    ``(f) Certain Individuals Ineligible.--For purposes of this 
section, rules similar to the rules of section 51(i)(1) and section 52 
shall apply.
    ``(g) Regulations.--The Secretary may prescribe such regulations as 
are necessary to carry out the purposes of this section, including 
simplified rules to satisfy the requirements of subsection (e)(3)(C) 
taking into account the requirements of section 411 and section 203 of 
the Employee Retirement Income Security Act of 1974.''.
    (b) Credit Made Part of General Business Credit.--Subsection (b) of 
section 38 of the Internal Revenue Code of 1986 is amended by striking 
``plus'' at the end of paragraph (30), by striking the period at the 
end of paragraph (31) and inserting ``, plus'', and by adding at the 
end the following new paragraph:
            ``(32) the flexible work credit determined under section 
        45O(a).''.
    (c) No Double Benefit.--Subsection (a) of section 280C of the 
Internal Revenue Code of 1986 is amended by inserting ``45O(a),'' after 
``45A(a),''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new item:

``Sec. 45O. Flexible work credit.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to wages paid after December 31, 2006.
Older Worker Opportunity Act of 2007 - Amends the Internal Revenue Code to allow employers who maintain a tax-qualified pension or retirement plan and who provide health insurance coverage a business-related tax credit for 25% of the first $6,000 of the wages of employees who have attained the age of 62 and who are participating in a formal flexible work program.

Defines "formal flexible work program" as a work program: (1) that consists of core and flex time; (2) whose core time does not exceed 20 hours per week, three days per week, or 1,000 hours per year; (3) that allows participation for at least one year; and (4) that does not permit a change or reduction in the health care or pension benefits of the participating employee.
A bill to promote labor force participation of older Americans, with the goals of increasing retirement security, reducing the projected shortage of experienced workers, maintaining future economic growth, and improving the Nation's fiscal outlook.