II 

114TH CONGRESS 

2D SESSION S. 3503 

To decrease the cost of hiring, and increase the take-home pay of, Puerto 

Rican workers. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 6, 2016 

Mr. RUBIO introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To decrease the cost of hiring, and increase the take-home 

pay of, Puerto Rican workers. 

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 ‘‘Economic Mobility for 

5 Productive Livelihoods and Expanding Opportunity Act of 

6 2016’’ or the ‘‘EMPLEO Act’’. 

7 SEC. 2. FEDERAL MINIMUM WAGE REQUIREMENT FOR ELI8 GIBLE PUERTO RICO EMPLOYEES. 

9 Section 6(a) of the Fair Labor Standards Act of 

10 1938 (29 U.S.C. 206(a)) is amended— 


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1 (1) by redesignating paragraphs (2) through 

2 (4) as paragraphs (3) through (5), respectively; and 

3 (2) by inserting after paragraph (1) the fol4 lowing: 

5 ‘‘(2) if such employee is an eligible Puerto Rico 

6 employee, as defined in section 6433(c) of the Inter7 nal Revenue Code of 1986, who receives a qualified 

8 wage subsidy payment under section 6433 of such 

9 Code from a participating employer, $5.00 an hour 

10 (as determined without regard to the qualified wage 

11 subsidy payment);’’. 

12 SEC. 3. WAGE SUBSIDY FOR PUERTO RICO WORKERS. 

13 (a) IN GENERAL.—Subchapter B of chapter 65 of the 

14 Internal Revenue Code of 1986 is amended by adding at 

15 the end the following new section: 

16 ‘‘SEC. 6433. WAGE SUBSIDY FOR PUERTO RICO WORKERS. 

17 ‘‘(a) IN GENERAL.—In the case of a participating 

18 employer which makes qualified wage subsidy payments 

19 to eligible Puerto Rico employees, such participating em20 ployer shall be treated for purposes of this title as having 

21 paid to the Secretary, on the date any such qualified wage 

22 subsidy payment is paid, payroll taxes in an amount equal 

23 to such wage subsidy payment. 

24 ‘‘(b) PARTICIPATING EMPLOYER.— 


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1 ‘‘(1) IN GENERAL.—For purposes of this sec2 tion, the term ‘participating employer’ means an em3 ployer which— 

4 ‘‘(A) elects the application of this section, 

5 ‘‘(B) makes qualified wage subsidy pay6 ments to all eligible Puerto Rico employees of 

7 such employer, 

8 ‘‘(C) provides to each eligible Puerto Rico 

9 employee (in such form and manner as the Sec10 retary shall by regulations prescribe) informa11 tion about the amount of qualified wage subsidy 

12 payments paid to such employee at the time 

13 such payments are made, and 

14 ‘‘(D) in the case of an employer which 

15 elects to receive an advance payment under sub16 section (g), provides to the Secretary the infor17 mation described in paragraph (2) not later 

18 than 30 days before the beginning of the appli19 cable period. 

20 ‘‘(2) INFORMATION REQUIRED.—The informa21 tion required under this paragraph is the following: 

22 ‘‘(A) An estimate of the number of workers 

23 who will be employed by the participating em24 ployer for the applicable period. 


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1 ‘‘(B) An estimate of the payroll taxes (de2 termined without regard to any increase in tax 

3 under section 3111 by reason of subsection 

4 (g)(2)) that will be paid by the participating 

5 employer with respect to all employees for such 

6 applicable period. 

7 ‘‘(C) An estimate of the number of eligible 

8 Puerto Rico employees who will be employed by 

9 the participating employer for such applicable 

10 period and the hourly rate of pay for each such 

11 employee (determined without regard to any 

12 qualified wage subsidy payment). 

13 ‘‘(D) An estimate of the aggregate amount 

14 of qualified wage subsidy payments that will be 

15 paid by such employer to eligible Puerto Rico 

16 employees for such applicable period. 

17 ‘‘(3) FAILURE TO MAKE SUBSIDY PAYMENTS.— 

18 For purposes of this title (including penalties), the 

19 failure by any employer which makes an election 

20 under paragraph (1)(A) to make any qualified wage 

21 subsidy payment at the time provided therefor shall 

22 be treated as the failure at such time to deduct and 

23 withhold under section 3102 an amount equal to the 

24 amount of such qualified wage subsidy payment. 


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1 ‘‘(c) ELIGIBLE PUERTO RICO EMPLOYEE.—For pur2 poses of this section, the term ‘eligible Puerto Rico em3 ployee’ means, with respect to any calendar year, any indi4 vidual who— 

5 ‘‘(1) is a citizen of the United States, 

6 ‘‘(2) has a social security number issued to the 

7 individual by the Social Security Administration, 

8 and 

9 ‘‘(3) certifies, in such form and manner as pro10 vided by the Secretary, to the employer that such in11 dividual is a resident of Puerto Rico and intends to 

12 remain a resident of Puerto Rico for not less than 

13 the next 6 months. 

14 ‘‘(d) QUALIFIED WAGE SUBSIDY PAYMENT.—For 

15 purposes of this section— 

16 ‘‘(1) IN GENERAL.—The term ‘qualified wage 

17 subsidy payment’ means, with respect to any eligible 

18 Puerto Rico employee for any period, a payment 

19 equal to 50 percent of the excess (if any) of— 

20 ‘‘(A) the median hourly wage for Puerto 

21 Rico, over 

22 ‘‘(B) the hourly wage paid to the eligible 

23 Puerto Rico employee. 


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1 ‘‘(2) MEDIAN HOURLY WAGE FOR PUERTO

2 RICO.—For purposes of paragraph (1)(A), the me3 dian hourly wage for Puerto Rico is— 

4 ‘‘(A) $10 for calendar years 2017 and 

5 2018, and 

6 ‘‘(B) for any calendar year beginning after 

7 2018, the amount determined by the Bureau of 

8 Labor Statistics based on the most recent data 

9 available as of 30 days before the start of such 

10 calendar year. 

11 ‘‘(3) DETERMINATION OF HOURLY WAGE.—For 

12 purposes of paragraph (1)(B)— 

13 ‘‘(A) IN GENERAL.—The hourly wage of 

14 any employee shall be determined without re15 gard to any qualified wage subsidy payment 

16 under this section. 

17 ‘‘(B) PERIOD.—Each hour at which an eli18 gible Puerto Rico employee performs services 

19 for a different rate of pay shall be treated as 

20 a separate period. 

21 ‘‘(C) SALARIED EMPLOYEES.—In the case 

22 of a salaried employee, the hourly wage for such 

23 employee for any period shall be determined by 

24 dividing the annual rate of pay for such period 

25 by 2,080. 


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1 ‘‘(e) PAYROLL TAXES.—For purposes of this section, 

2 the term ‘payroll taxes’ means— 

3 ‘‘(1) amounts required to be deducted for the 

4 payroll period under section 3102 (relating to FICA 

5 employee taxes), and 

6 ‘‘(2) amounts of the taxes imposed for the pay7 roll period under section 3111 (relating to FICA em8 ployer taxes). 

9 ‘‘(f) OTHER DEFINITIONS AND SPECIAL RULES.— 

10 For purposes of this section— 

11 ‘‘(1) APPLICABLE PERIOD.—For purposes of 

12 this section, the term ‘applicable period’ means— 

13 ‘‘(A) except as provided in subparagraph 

14 (B), a calendar quarter, and 

15 ‘‘(B) in the case of any employer which 

16 files returns for payroll taxes less frequently 

17 than quarterly, such period as determined by 

18 the Secretary under regulations. 

19 ‘‘(2) WAGE SUBSIDY PAYMENTS IN EXCESS OF

20 PAYROLL TAX LIABILITY.—To the extent that the 

21 amount treated as paid under subsection (a) exceeds 

22 the amount of such person’s liability for payroll 

23 taxes, the Secretary shall credit and refund such ex24 cess in the same manner as if it were an overpay25 ment of such taxes. 


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1 ‘‘(g) ADVANCED PAYMENTS FOR CERTAIN PARTICI2 PATING EMPLOYERS.— 

3 ‘‘(1) IN GENERAL.—In the case of a partici4 pating employer which elects the application of this 

5 subsection, the Secretary shall pay to such partici6 pating employer, not later than the first day of the 

7 applicable period, an amount equal to the excess 

8 of— 

9 ‘‘(A) the aggregate amount of qualified 

10 wage subsidy payments for such applicable pe11 riod (as determined based on estimates sub12 mitted under subsection (b)(2)), exceeds 

13 ‘‘(B) the aggregate amount of payroll taxes 

14 (determined without regard to any increase in 

15 tax under section 3111 by reason of paragraph 

16 (2) and based on estimates submitted under 

17 subsection (b)(2)) for such applicable period. 

18 ‘‘(2) TREATMENT OF PAYMENTS.—For pur19 poses of this title, the amount of taxes imposed 

20 under section 3111 on any participating employer 

21 for any calendar quarter shall be increased by an 

22 amount equal to any payment made under para23 graph (1) with respect to such calendar quarter.’’. 

24 (b) SOCIAL SECURITY TRUST FUNDS HELD HARM25 LESS.—In determining the amount of any amount transVerDate Sep 11 2014 00:18 Dec 07, 2016 Jkt 069200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S3503.IS S3503

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1 ferred or appropriated to any fund under the Social Secu2 rity Act, section 6433 of the Internal Revenue Code of 

3 1986 shall not be taken into account. 

4 (c) CONFORMING AMENDMENTS.— 

5 (1) Section 1324(b)(2) of title 31, United 

6 States Code, is amended by striking ‘‘or 6431’’ and 

7 inserting ‘‘6431, or 6433’’. 

8 (2) The table of sections for subchapter B of 

9 chapter 65 of the Internal Revenue Code of 1986 is 

10 amended by adding at the end the following new 

11 item: 

‘‘Sec. 6433. Wage subsidy for Puerto Rico workers.’’. 

12 (d) OTHER PROVISIONS.— 

13 (1) REPORTING OF WAGE SUBSIDY INFORMA14 TION.—Section 6051(a) of the Internal Revenue 

15 Code of 1986 is amended by striking ‘‘and’’ at the 

16 end of paragraph (13), by striking the period at the 

17 end of paragraph (14) and inserting ‘‘, and’’, and by 

18 inserting after paragraph (14) the following new 

19 paragraph: 

20 ‘‘(15) in the case of an eligible Puerto Rico em21 ployee (as defined in section 6433), the amount of 

22 any qualified wage subsidy payment paid to such 

23 employee.’’. 

24 (2) PENALTY FOR FAILURE TO PROVIDE INFOR25 MATION TO EMPLOYEES.—Section 6652 of such 


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1 Code is amended by adding at the end the following 

2 new subsection: 

3 ‘‘(o) FAILURE TO REPORT WAGE SUBSIDY INFORMA4 TION TO EMPLOYEES.—In the case of a failure to provide 

5 the information required under section 6433(b)(1)(C) at 

6 the time required for providing such information, there 

7 shall be paid (upon notice and demand by the Secretary 

8 and in the same manner as tax) by the person failing to 

9 provide such information, an amount equal to $50 for each 

10 such failure. In the case of any failure due to negligence 

11 or intentional disregard, the preceding sentence shall be 

12 applied by substituting ‘$100’ for ‘$50’.’’. 

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

14 this section shall apply to wages paid after December 31, 

15 2016. 

Æ 


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