II 

116TH CONGRESS 

1ST SESSION S. 1548 

To amend the Internal Revenue Code of 1986 to modify the rate of tax 

on corporations participating in labor lockouts and to prohibit deductions 

and credits for wages and benefits paid to temporary workers during 

labor lockouts. 

IN THE SENATE OF THE UNITED STATES 

MAY 20, 2019 

Mr. TESTER 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 modify 

the rate of tax on corporations participating in labor 

lockouts and to prohibit deductions and credits for wages 

and benefits paid to temporary workers during labor 

lockouts. 

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 ‘‘Prohibiting Incentives 

5 for Corporations that Kickout Employees Tax (PICKET) 

6 Act’’. 


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•S 1548 IS

1 SEC. 2. RATE OF TAX FOR CORPORATIONS PARTICIPATING 

2 IN LABOR LOCKOUTS. 

3 (a) IN GENERAL.—Section 11 of the Internal Rev4 enue Code of 1986 is amended by redesignating sub5 sections (c) and (d) as subsections (d) and (e), respec6 tively, and by inserting after subsection (b) the following 

7 new subsection: 

8 ‘‘(c) EXCEPTION FOR DISQUALIFIED CORPORA9 TIONS.— 

10 ‘‘(1) IN GENERAL.—In the case of any corpora11 tion participating in a labor lockout during the tax12 able year, subsection (b) shall be applied by sub13 stituting ‘35 percent’ for ‘21 percent’. 

14 ‘‘(2) LABOR LOCKOUT.—For purposes of this 

15 subsection, the term ‘labor lockout’ means a labor 

16 dispute involving a work stoppage, wherein an em17 ployer withholds work from its employees in order to 

18 gain a concession from them.’’. 

19 (b) CONFORMING AMENDMENTS.— 

20 (1) The heading of section 11(d) of the Internal 

21 Revenue Code of 1986 (as redesignated by sub22 section (a)) is amended by striking ‘‘EXCEPTIONS’’ 

23 and inserting ‘‘OTHER EXCEPTIONS’’. 

24 (2) Section 280C(c)(2)(B)(ii)(II) of such Code 

25 is amended by inserting ‘‘(section 11(c), in the case 


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•S 1548 IS

1 of a corporation described in such section)’’ after 

2 ‘‘section 11(b)’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to taxable years beginning after 

5 the date of the enactment of this Act. 

6 SEC. 3. DENIAL OF DEDUCTION AND CREDITS FOR WAGES 

7 AND BENEFITS PAID TO TEMPORARY WORK8 ERS DURING A LABOR LOCKOUT. 

9 (a) DEDUCTION.— 

10 (1) IN GENERAL.—Part IX of subchapter B of 

11 chapter 1 of the Internal Revenue Code of 1986 is 

12 amended by adding at the end the following new 

13 subsection: 

14 ‘‘SEC. 280I. REMUNERATION PAID DURING LABOR LOCK15 OUTS. 

16 ‘‘(a) IN GENERAL.—No deduction shall be allowed 

17 for any remuneration paid by the taxpayer (including 

18 wages or other benefits) to any temporary replacement 

19 worker during a labor lockout (as defined in section 

20 11(c)(2)). 

21 ‘‘(b) TEMPORARY REPLACEMENT WORKER.—For 

22 purposes of subsection (a), the term ‘temporary replace23 ment worker’ means any individual compensated to per24 form duties normally performed by employees from whom 

25 work is withheld under the labor lockout.’’. 


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1 (2) CLERICAL AMENDMENT.—The table of sec2 tions for part IX of subchapter B of chapter 1 of 

3 such Code is amended by adding at the end the fol4 lowing new item: 

‘‘Sec. 280I. Remuneration paid during labor lockouts.’’. 

5 (b) CREDITS.— 

6 (1) RESEARCH CREDIT.—Section 41(b)(2)(D) 

7 of the Internal Revenue Code of 1986 is amended by 

8 adding at the end the following new clause: 

9 ‘‘(iv) EXCLUSION FOR WAGES PAID

10 DURING A LABOR LOCKOUT.—The term 

11 ‘wages’ shall not include any amount paid 

12 to a temporary replacement worker (as de13 fined in section 280I) during a labor lock14 out (as defined in section 11(c)(2)).’’. 

15 (2) WORK OPPORTUNITY CREDIT.—Section 

16 51(c) of such Code is amended by adding at the end 

17 the following new paragraph: 

18 ‘‘(6) EXCLUSION FOR WAGES PAID DURING A

19 LABOR LOCKOUT.—The term ‘wages’ shall not in20 clude any amount paid to a temporary replacement 

21 worker (as defined in section 280I) during a labor 

22 lockout (as defined in section 11(c)(2)).’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 the date of the enactment of this Act. 

Æ 


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