Senate Majority Leader Chuck Schumer is weighing adding a provision to the $1.9 trillion COVID-19 relief plan that would put a penalty tax on big companies that don’t pay workers at least $15 an hour, a Democratic aide said on condition of anonymity.
Two Senate committee chairs earlier floated that idea following a ruling by the Senate parliamentarian that Democrats’ minimum-wage proposal, as previously drafted, fell afoul of rules for the legislative process that congressional leaders are using for President Joe Biden’s aid bill. Requirements dictate that measures be primarily fiscal in nature.
The House is scheduled to take up the stimulus bill on the floor of the chamber Friday — including a phased-in hike in the minimum wage to $15 an hour — with passage expected late in the evening or potentially Saturday.
Action then shifts to the Senate, where the changes to the legislation are certain given the minimum-wage debate and a separate requirement to trim some spending after the Congressional Budget Office said the House legislation weighs in at greater than the limit set by the House and Senate earlier this month.
Congressional leaders aim to pass the final package by March 14.
Schumer is looking at adding a provision that would penalize large corporations that don’t pay workers at least $15 an hour, according to a Democratic aide who spoke on condition of anonymity.
Democrats have sought to include a phased-in increase in the federal minimum wage from $7.25 to $15 an hour in the pandemic-assistance legislation.
Senate Finance Committee Chair Ron Wyden on Friday proposed a tax on big companies’ payroll costs that would start at 5 percent as punishment if any of their workers “earn less than a certain amount.”
Wyden, along with Senate Budget Committee Chair Bernie Sanders, both floated corporate-tax measures to be attached to the COVID-19 relief bill as a means of reviving the minimum-wage hike Democrats want to include in the bill. That’s after the Senate parliamentarian, Elizabeth MacDonough, ruled Thursday that the wage increase as proposed didn’t qualify for the fast-track legislative procedure Democrats are using for the aid bill.
“While conversations are continuing, I believe this ‘plan B’ provides us a path to move forward and get this done through the reconciliation process,” Wyden said of his tax-hike idea.
The proposal hits big companies with a “penalty” on their total payroll that starts at 5 percent and increases over time if any workers earn less than an amount that Wyden didn’t specify in his statement Friday. There would also be “safeguards to prevent companies from trying to outsource labor to avoid paying living wages.”
Wyden didn’t specify the size of companies affected. He said he would provide a benefit to “the smallest of small businesses,” with an income-tax credit equal to 25 percent of wages, up to $10,000 a year per employer, to those that pay their workers higher wages.
Business groups including the Chamber of Commerce and International Franchise Association criticized moves to boost taxes as part of the aid bill.
