King, Fischer Urge Acting Labor Secretary to Better Promote Paid Family Leave Tax Credit

WASHINGTON, D.C.-U.S. Senators Angus King (I-ME) and Deb Fischer (R-NE) are recommending the Biden Administration raise awareness of the paid family leave tax credit. In a letter to U.S. Department of Labor (DOL) Acting Secretary Julie Su, the Senators highlight that due to delays in messaging guidance and bureaucratic confusion, many employers are unaware of the existing, proven, bipartisan Paid Family and Medical Leave (PFML) tax credit.

"We write today to respectfully request that the Department's Women's Bureau (WB) expeditiously carry out the report language included in the Fiscal Year 2024 Departments of Labor, Health and Human Services, Education, and Related Agencies Appropriation Bill report¹ encouraging the WB to coordinate a campaign to raise awareness of the Paid Family and Medical Leave (PFML) tax credit under Section 45S of the Internal Revenue Code," the Senators wrote.

The Senators continued, "The Section 45S PFML tax credit provides employers with a tax credit up to 25% of wages paid to employees while on PFML. In order to claim the credit, an employer must offer all qualifying employees at least two weeks of PFML, have a written PFML in place, and pay at least 50% of an employee's normal wages while on PFML."

"With the late enactment of the FY 2024 appropriations bills, time is of the essence to carry out these efforts. We stand ready to work with you and the Department to help carry out these awareness efforts in order to help more employees gain access to PFML," the Senators concluded.

King and Fischer previously led the effort to establish the country's first ever nationwide PFML policy, which was included in the 2017 Tax Cuts and Jobs Act and implemented in 2018. Earlier this year, they introduced thePaid Family and Medical Leave Tax Credit Extension and Enhancement Actthat would provide certainty to businesses by making the paid family leave tax credit permanent and would provide additional options for financing paid leave such as through PFML insurance. Importantly, the bill also includes a King-led provision that allows eligible employers to receive the credit for leave offered in excess of any state or local mandates, offering a significant incentive for employers who wish to offer more leave than the Maine requirement.

In addition to Paid Family Leave, Senator King has long worked to expand access to child care and reduce the workforce shortage in the critical sector. He secured millions to improve child care services in the 2022, 2023, and 2024 omnibus appropriations bills, and worked to authorize the planning and development of a new child development center at Portsmouth Naval Shipyard. He is also the cosponsor of the recently-introducedChild and Dependent Care Tax Credit Enhancement Act, which would permanently expand the Child and Dependent Care Tax Credit that helps households offset their child care costs.

Read the full letter here or below.

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Dear Acting Secretary Su:

We write today to respectfully request that the Department's Women's Bureau (WB) expeditiously carry out the report language included in the Fiscal Year 2024 Departments of Labor, Health and Human Services, Education, and Related Agencies Appropriation Bill report¹encouraging the WB to coordinate a campaign to raise awareness of the Paid Family and Medical Leave (PFML) tax credit under Section 45S of the Internal Revenue Code.

The Section 45S PFML tax credit provides employers with a tax credit up to 25% of wages paid to employees while on PFML. In order to claim the credit, an employer must offer all qualifying employees at least two weeks of PFML, have a written PFML in place, and pay at least 50% of an employee's normal wages while on PFML.

Unfortunately, due to the delay in issuing guidance for the credit along with the confusion of temporary paid leave credits associated with the COVID-19 pandemic, many employers remain unaware of the availability of the credit. A recent survey conducted by the National Federation of Independent Business found that only 22% of small business owners had heard of the credit.

As a result, we believe that there is a significant opportunity to help close this awareness gap and increase employee's access to PFML by working to promote the availability of the credit.

With the late enactment of the FY 2024 appropriations bills, time is of the essence to carry out these efforts. We stand ready to work with you and the Department to help carry out these awareness efforts in order to help more employees gain access to PFML.

Sincerely,

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