EMPLEO Act
Bill: S.841 | Sponsor: Sen. Rubio, Marco (R-FL)
Policy area: Labor and Employment

Summary:
Economic Mobility for Productive Livelihoods and Expanding Opportunity Act of 2021 or the EMPLEO Act
This bill permits employers to participate in a wage subsidy program for eligible Puerto Rican employees. Eligible employees must be (1) U.S. citizens, (2) have Social Security numbers, and (3) certify their residency in Puerto Rico and intent to remain residents for at least the next six months.
Employers who opt in must pay their eligible employees a minimum wage of $5. The Department of the Treasury then subsidizes those wages in an amount equal to 50% of the difference between $10 and the hourly wages the employees receive from their employers. For example, if a participating employer pays their eligible employees $5 hourly, the subsidy would equal $2.50 for an effective hourly wage of $7.50. Participating employers may elect advance payment of the aggregate subsidy amounts that exceed the employer's aggregate payroll taxes for the applicable period based on estimates the employer provides to Treasury.
The bill treats employers who make such wage subsidy payments to eligible Puerto Rico employees as having paid payroll taxes in an amount equal to such payments.

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

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Economic Mobility for Productive 
Livelihoods and Expanding Opportunity Act of 2021'' or the ``EMPLEO 
Act''.

SEC. 2. FEDERAL MINIMUM WAGE REQUIREMENT FOR ELIGIBLE PUERTO RICO 
              EMPLOYEES.

    Section 6(a) of the Fair Labor Standards Act of 1938 (29 U.S.C. 
206(a)) is amended--
            (1) by redesignating paragraphs (2) through (4) as 
        paragraphs (3) through (5), respectively; and
            (2) by inserting after paragraph (1) the following:
            ``(2) if such employee is an eligible Puerto Rico employee, 
        as defined in section 6431(c) of the Internal Revenue Code of 
        1986, who receives a qualified wage subsidy payment under 
        section 6431 of such Code from a participating employer, $5.00 
        an hour (as determined without regard to the qualified wage 
        subsidy payment);''.

SEC. 3. WAGE SUBSIDY FOR PUERTO RICO WORKERS.

    (a) In General.--Subchapter B of chapter 65 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new section:

``SEC. 6431. WAGE SUBSIDY FOR PUERTO RICO WORKERS.

    ``(a) In General.--In the case of a participating employer which 
makes qualified wage subsidy payments to eligible Puerto Rico 
employees, such participating employer shall be treated for purposes of 
this title as having paid to the Secretary, on the date any such 
qualified wage subsidy payment is paid, payroll taxes in an amount 
equal to such wage subsidy payment.
    ``(b) Participating Employer.--
            ``(1) In general.--For purposes of this section, the term 
        `participating employer' means an employer which--
                    ``(A) elects the application of this section,
                    ``(B) makes qualified wage subsidy payments to all 
                eligible Puerto Rico employees of such employer,
                    ``(C) provides to each eligible Puerto Rico 
                employee (in such form and manner as the Secretary 
                shall by regulations prescribe) information about the 
                amount of qualified wage subsidy payments paid to such 
                employee at the time such payments are made, and
                    ``(D) in the case of an employer which elects to 
                receive an advance payment under subsection (g), 
                provides to the Secretary the information described in 
                paragraph (2) not later than 30 days before the 
                beginning of the applicable period.
            ``(2) Information required.--The information required under 
        this paragraph is the following:
                    ``(A) An estimate of the number of workers who will 
                be employed by the participating employer for the 
                applicable period.
                    ``(B) An estimate of the payroll taxes (determined 
                without regard to any increase in tax under section 
                3111 by reason of subsection (g)(2)) that will be paid 
                by the participating employer with respect to all 
                employees for such applicable period.
                    ``(C) An estimate of the number of eligible Puerto 
                Rico employees who will be employed by the 
                participating employer for such applicable period and 
                the hourly rate of pay for each such employee 
                (determined without regard to any qualified wage 
                subsidy payment).
                    ``(D) An estimate of the aggregate amount of 
                qualified wage subsidy payments that will be paid by 
                such employer to eligible Puerto Rico employees for 
                such applicable period.
            ``(3) Failure to make subsidy payments.--For purposes of 
        this title (including penalties), the failure by any employer 
        which makes an election under paragraph (1)(A) to make any 
        qualified wage subsidy payment at the time provided therefor 
        shall be treated as the failure at such time to deduct and 
        withhold under section 3102 an amount equal to the amount of 
        such qualified wage subsidy payment.
    ``(c) Eligible Puerto Rico Employee.--For purposes of this section, 
the term `eligible Puerto Rico employee' means, with respect to any 
calendar year, any individual who--
            ``(1) is a citizen of the United States,
            ``(2) has a social security number issued to the individual 
        by the Social Security Administration, and
            ``(3) certifies, in such form and manner as provided by the 
        Secretary, to the employer that such individual is a resident 
        of Puerto Rico and intends to remain a resident of Puerto Rico 
        for not less than the next 6 months.
    ``(d) Qualified Wage Subsidy Payment.--For purposes of this 
section--
            ``(1) In general.--The term `qualified wage subsidy 
        payment' means, with respect to any eligible Puerto Rico 
        employee for any period, a payment equal to 50 percent of the 
        excess (if any) of--
                    ``(A) the median hourly wage for Puerto Rico, over
                    ``(B) the hourly wage paid to the eligible Puerto 
                Rico employee.
            ``(2) Median hourly wage for puerto rico.--For purposes of 
        paragraph (1)(A), the median hourly wage for Puerto Rico is--
                    ``(A) $10 for calendar years 2022 and 2023, and
                    ``(B) for any calendar year beginning after 2023, 
                the amount determined by the Bureau of Labor Statistics 
                based on the most recent data available as of 30 days 
                before the start of such calendar year.
            ``(3) Determination of hourly wage.--For purposes of 
        paragraph (1)(B)--
                    ``(A) In general.--The hourly wage of any employee 
                shall be determined without regard to any qualified 
                wage subsidy payment under this section.
                    ``(B) Period.--Each hour at which an eligible 
                Puerto Rico employee performs services for a different 
                rate of pay shall be treated as a separate period.
                    ``(C) Salaried employees.--In the case of a 
                salaried employee, the hourly wage for such employee 
                for any period shall be determined by dividing the 
                annual rate of pay for such period by 2,080.
    ``(e) Payroll Taxes.--For purposes of this section, the term 
`payroll taxes' means--
            ``(1) amounts required to be deducted for the payroll 
        period under section 3102 (relating to FICA employee taxes), 
        and
            ``(2) amounts of the taxes imposed for the payroll period 
        under section 3111 (relating to FICA employer taxes).
    ``(f) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Applicable period.--For purposes of this section, the 
        term `applicable period' means--
                    ``(A) except as provided in subparagraph (B), a 
                calendar quarter, and
                    ``(B) in the case of any employer which files 
                returns for payroll taxes less frequently than 
                quarterly, such period as determined by the Secretary 
                under regulations.
            ``(2) Wage subsidy payments in excess of payroll tax 
        liability.--To the extent that the amount treated as paid under 
        subsection (a) exceeds the amount of such person's liability 
        for payroll taxes, the Secretary shall credit and refund such 
        excess in the same manner as if it were an overpayment of such 
        taxes.
    ``(g) Advanced Payments for Certain Participating Employers.--
            ``(1) In general.--In the case of a participating employer 
        which elects the application of this subsection, the Secretary 
        shall pay to such participating employer, not later than the 
        first day of the applicable period, an amount equal to the 
        excess of--
                    ``(A) the aggregate amount of qualified wage 
                subsidy payments for such applicable period (as 
                determined based on estimates submitted under 
                subsection (b)(2)), exceeds
                    ``(B) the aggregate amount of payroll taxes 
                (determined without regard to any increase in tax under 
                section 3111 by reason of paragraph (2) and based on 
                estimates submitted under subsection (b)(2)) for such 
                applicable period.
            ``(2) Treatment of payments.--For purposes of this title, 
        the amount of taxes imposed under section 3111 on any 
        participating employer for any calendar quarter shall be 
        increased by an amount equal to any payment made under 
        paragraph (1) with respect to such calendar quarter.''.
    (b) Social Security Trust Funds Held Harmless.--In determining the 
amount of any amount transferred or appropriated to any fund under the 
Social Security Act, section 6431 of the Internal Revenue Code of 1986 
shall not be taken into account.
    (c) Conforming Amendment.--The table of sections for subchapter B 
of chapter 65 of the Internal Revenue Code of 1986 is amended by adding 
at the end the following new item:

``Sec. 6431. Wage subsidy for Puerto Rico workers.''.
    (d) Other Provisions.--
            (1) Reporting of wage subsidy information.--Section 6051(a) 
        of the Internal Revenue Code of 1986 is amended by striking 
        ``and'' at the end of paragraph (16), by striking the period at 
        the end of paragraph (17) and inserting ``, and'', and by 
        inserting after paragraph (17) the following new paragraph:
            ``(18) in the case of an eligible Puerto Rico employee (as 
        defined in section 6431), the amount of any qualified wage 
        subsidy payment paid to such employee.''.
            (2) Penalty for failure to provide information to 
        employees.--Section 6652 of such Code is amended by adding at 
        the end the following new subsection:
    ``(q) Failure To Report Wage Subsidy Information to Employees.--In 
the case of a failure to provide the information required under section 
6431(b)(1)(C) at the time required for providing such information, 
there shall be paid (upon notice and demand by the Secretary and in the 
same manner as tax) by the person failing to provide such information, 
an amount equal to $50 for each such failure. In the case of any 
failure due to negligence or intentional disregard, the preceding 
sentence shall be applied by substituting `$100' for `$50'.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to wages paid after December 31, 2021.
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