II 

115TH CONGRESS 

1ST SESSION S. 1716 

To amend the Internal Revenue Code of 1986 to provide a credit to employers 

who provide paid family and medical leave, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

AUGUST 2, 2017 

Mrs. FISCHER (for herself and Mr. KING) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

a credit to employers who provide paid family and medical leave, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Strong Families Act’’. 

5 SEC. 2. EMPLOYER CREDIT FOR PAID FAMILY AND MED6 ICAL LEAVE. 

7 (a) IN GENERAL.— 

8 (1) ALLOWANCE OF CREDIT.—Subpart D of 

9 part IV of subchapter A of chapter 1 of the Internal 


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1 Revenue Code of 1986 is amended by adding at the 

2 end the following new section: 

3 ‘‘SEC. 45S. EMPLOYER CREDIT FOR PAID FAMILY AND MED4 ICAL LEAVE. 

5 ‘‘(a) ESTABLISHMENT OF CREDIT.— 

6 ‘‘(1) IN GENERAL.—For purposes of section 38, 

7 in the case of an eligible employer, the paid family 

8 and medical leave credit is an amount equal to the 

9 applicable percentage of the amount of wages paid 

10 to qualifying employees during any period in which 

11 such employees are on family and medical leave. 

12 ‘‘(2) APPLICABLE PERCENTAGE.—For purposes 

13 of paragraph (1), the term ‘applicable percentage’ 

14 means 12.5 percent increased (but not above 25 per15 cent) by 0.25 percentage points for each percentage 

16 point by which the rate of payment (as described 

17 under subsection (c)(1)(B)) exceeds 50 percent. 

18 ‘‘(b) LIMITATION.— 

19 ‘‘(1) IN GENERAL.—The credit allowed under 

20 subsection (a) with respect to any employee for any 

21 taxable year shall not exceed an amount equal to the 

22 product of the normal hourly wage rate of such em23 ployee for each hour (or fraction thereof) of actual 

24 services performed for the employer and the number 


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1 of hours (or fraction thereof) for which family and 

2 medical leave is taken. 

3 ‘‘(2) NON-HOURLY WAGE RATE.—For purposes 

4 of paragraph (1), in the case of any employee who 

5 is not paid on an hourly wage rate, the wages of 

6 such employee shall be prorated to an hourly wage 

7 rate under regulations established by the Secretary, 

8 in consultation with the Secretary of Labor. 

9 ‘‘(3) MAXIMUM AMOUNT OF LEAVE SUBJECT TO

10 CREDIT.—The amount of family and medical leave 

11 that may be taken into account with respect to any 

12 employee under subsection (a) for any taxable year 

13 shall not exceed 12 weeks. 

14 ‘‘(c) ELIGIBLE EMPLOYER.—For purposes of this 

15 section— 

16 ‘‘(1) IN GENERAL.—The term ‘eligible em17 ployer’ means any employer who has in place a pol18 icy that meets the following requirements: 

19 ‘‘(A) The policy provides— 

20 ‘‘(i) in the case of a qualifying em21 ployee who is not a part-time employee (as 

22 defined in section 4980E(d)(4)(B)), not 

23 less than 2 weeks of annual paid family 

24 and medical leave, and 


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1 ‘‘(ii) in the case of a qualifying em2 ployee who is a part-time employee, an 

3 amount of annual paid family and medical 

4 leave that is not less than an amount 

5 which bears the same ratio to the amount 

6 of annual paid family and medical leave 

7 that is provided to a qualifying employee 

8 described in clause (i) as— 

9 ‘‘(I) the number of hours the em10 ployee is expected to work during any 

11 week, bears to 

12 ‘‘(II) the number of hours an 

13 equivalent qualifying employee de14 scribed in clause (i) is expected to 

15 work during the week. 

16 ‘‘(B) The policy requires that the rate of 

17 payment under the program is not less than 50 

18 percent of the wages normally paid to such em19 ployee for services performed for the employer. 

20 ‘‘(2) SPECIAL RULE FOR CERTAIN EMPLOY21 ERS.— 

22 ‘‘(A) IN GENERAL.—An added employer 

23 shall not be treated as an eligible employer un24 less such employer provides paid family and 


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1 medical leave in compliance with a policy which 

2 ensures that the employer— 

3 ‘‘(i) will not interfere with, restrain, 

4 or deny the exercise of or the attempt to 

5 exercise, any right provided under the pol6 icy, and 

7 ‘‘(ii) will not discharge or in any other 

8 manner discriminate against any individual 

9 for opposing any practice prohibited by the 

10 policy. 

11 ‘‘(B) ADDED EMPLOYER; ADDED EM12 PLOYEE.—For purposes of this paragraph— 

13 ‘‘(i) ADDED EMPLOYEE.—The term 

14 ‘added employee’ means a qualifying em15 ployee who is not covered by title I of the 

16 Family and Medical Leave Act of 1993, as 

17 amended. 

18 ‘‘(ii) ADDED EMPLOYER.—The term 

19 ‘added employer’ means an eligible em20 ployer (determined without regard to this 

21 paragraph), whether or not covered by that 

22 title I, who offers paid family and medical 

23 leave to added employees. 

24 ‘‘(3) AGGREGATION RULE.—All persons which 

25 are treated as a single employer under subsections 


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1 (a) and (b) of section 52 shall be treated as a single 

2 taxpayer. 

3 ‘‘(4) TREATMENT OF BENEFITS MANDATED OR

4 PAID FOR BY STATE OR LOCAL GOVERNMENTS.—For 

5 purposes of this section, any leave which is paid by 

6 a State or local government or required by State or 

7 local law shall not be taken into account in deter8 mining the amount of paid family and medical leave 

9 provided by the employer. 

10 ‘‘(5) NO INFERENCE.—Nothing in this sub11 section shall be construed as subjecting an employer 

12 to any penalty, liability, or other consequence (other 

13 than ineligibility for the credit allowed by reason of 

14 subsection (a) or recapturing the benefit of such 

15 credit) for failure to comply with the requirements 

16 of this subsection. 

17 ‘‘(d) QUALIFYING EMPLOYEES.—For purposes of 

18 this section, the term ‘qualifying employee’ means any em19 ployee (as defined in section 3(e) of the Fair Labor Stand20 ards Act of 1938, as amended) who— 

21 ‘‘(1) has been employed by the employer for 1 

22 year or more, and 

23 ‘‘(2) for the preceding year, had compensation 

24 not in excess of an amount equal to 60 percent of 


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1 the amount applicable for such year under clause (i) 

2 of section 414(q)(1)(B). 

3 ‘‘(e) FAMILY AND MEDICAL LEAVE.— 

4 ‘‘(1) IN GENERAL.—Except as provided in para5 graph (2), for purposes of this section, the term 

6 ‘family and medical leave’ means leave for any 1 or 

7 more of the purposes described under subparagraph 

8 (A), (B), (C), (D), or (E) of paragraph (1), or para9 graph (3), of section 102(a) of the Family and Med10 ical Leave Act of 1993, as amended, whether the 

11 leave is provided under that Act or by a policy of the 

12 employer. 

13 ‘‘(2) EXCLUSION.—If an employer provides paid 

14 leave as vacation leave, personal leave, or medical or 

15 sick leave (other than leave specifically for 1 or more 

16 of the purposes referred to in paragraph (1)), that 

17 paid leave shall not be considered to be family and 

18 medical leave under paragraph (1). 

19 ‘‘(3) DEFINITIONS.—In this subsection, the 

20 terms ‘vacation leave’, ‘personal leave’, and ‘medical 

21 or sick leave’ mean those 3 types of leave, within the 

22 meaning of section 102(d)(2) of that Act. 

23 ‘‘(f) WAGES.—For purposes of this section, the term 

24 ‘wages’ has the meaning given such term by subsection 

25 (b) of section 3306 (determined without regard to any dolVerDate Sep 11 2014 23:21 Aug 15, 2017 Jkt 069200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1716.IS S1716

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1 lar limitation contained in such section). Such term shall 

2 not include any amount taken into account for purposes 

3 of determining any other credit allowed under this sub4 part. 

5 ‘‘(g) ELECTION TO HAVE CREDIT NOT APPLY.— 

6 ‘‘(1) IN GENERAL.—A taxpayer may elect to 

7 have this section not apply for any taxable year. 

8 ‘‘(2) OTHER RULES.—Rules similar to the rules 

9 of paragraphs (2) and (3) of section 51(j) shall 

10 apply for purposes of this subsection. 

11 ‘‘(h) TERMINATION.—This section shall not apply to 

12 wages paid in any taxable year beginning after the date 

13 which is 5 years after the date of the enactment of the 

14 Strong Families Act.’’. 

15 (b) CREDIT PART OF GENERAL BUSINESS CREDIT.— 

16 Section 38(b) of the Internal Revenue Code of 1986 is 

17 amended by striking ‘‘plus’’ at the end of paragraph (35), 

18 by striking the period at the end of paragraph (36) and 

19 inserting ‘‘, plus’’, and by adding at the end the following 

20 new paragraph: 

21 ‘‘(37) in the case of an eligible employer (as de22 fined in section 45S(c)), the paid family and medical 

23 leave credit determined under section 45S(a).’’. 

24 (c) CREDIT ALLOWED AGAINST AMT.—Subpara25 graph (B) of section 38(c)(4) of the Internal Revenue 


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1 Code of 1986 is amended by redesignating clauses (vii) 

2 through (ix) as clauses (vii) through (x), respectively, and 

3 by inserting after clause (vi) the following new clause: 

4 ‘‘(vii) the credit determined under sec5 tion 45S,’’. 

6 (d) CONFORMING AMENDMENTS.— 

7 (1) DENIAL OF DOUBLE BENEFIT.—Section 

8 280C(a) of the Internal Revenue Code of 1986 is 

9 amended by inserting ‘‘45S(a),’’ after ‘‘45P(a),’’. 

10 (2) ELECTION TO HAVE CREDIT NOT APPLY.— 

11 Section 6501(m) of such Code is amended by insert12 ing ‘‘45S(g),’’ after ‘‘45H(g),’’. 

13 (3) CLERICAL AMENDMENT.—The table of sec14 tions for subpart D of part IV of subchapter A of 

15 chapter 1 of such Code is amended by adding at the 

16 end the following new item: 

‘‘Sec. 45S. Employer credit for paid family and medical leave.’’. 

17 (e) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to wages paid in taxable years be19 ginning after the date of the enactment of this Act. 

20 SEC. 3. GAO STUDY OF IMPACT OF TAX CREDIT TO PRO21 MOTE ACCESS TO PAID FAMILY AND MED22 ICAL LEAVE. 

23 (a) STUDY.—Not later than 4 years after the date 

24 of enactment of this Act, the Comptroller General of the 


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1 United States, in consultation with the Secretary of the 

2 Treasury and the Secretary of Labor, shall— 

3 (1) complete a study that— 

4 (A) examines the effectiveness of the tax 

5 credit for paid family and medical leave author6 ized under section 45S of the Internal Revenue 

7 Code of 1986 (as added by this Act) in terms 

8 of— 

9 (i) increasing access to paid family 

10 and medical leave among qualifying em11 ployees; 

12 (ii) promoting the creation of new 

13 paid family and medical leave policies 

14 among eligible employers; 

15 (iii) increasing the generosity of exist16 ing paid family and medical leave policies 

17 among eligible employers; and 

18 (iv) incentivizing employee or em19 ployer behavior that might not otherwise 

20 have occurred in the absence of the credit; 

21 (B) provides recommendations for ways to 

22 modify or enhance the tax credit to further pro23 mote access to paid family and medical leave 

24 for qualifying employees; and 


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1 (C) provides suggestions of alternative 

2 policies that Federal and State governments 

3 could implement to increase access to paid fam4 ily and medical leave, particularly among quali5 fying employees; and 

6 (2) prepare and submit a report to the Com7 mittee on Finance of the Senate and the Committee 

8 on Ways and Means of the House of Representatives 

9 setting forth the conclusions of the study conducted 

10 under paragraph (1) in such a manner that the rec11 ommendations included in the report can inform fu12 ture legislative action. Such report shall also be 

13 made publicly available via the website of the Gov14 ernment Accountability Office. 

15 (b) PROHIBITION.—In carrying out the requirements 

16 of this section, the Comptroller General of the United 

17 States may request qualitative and quantitative informa18 tion from employers and employees claiming the credit 

19 under section 45S of the Internal Revenue Code of 1986, 

20 but nothing in this section shall be construed as man21 dating additional reporting requirements for such employ22 ers or employees beyond what is already required by law. 

Æ 


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