Fridays with Frank – Nov 15, 2019

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Capitol-long viewHappy friday!

Welcome to a special Washington, DC edition of Fridays with Frank!  As a member of the Society for Human Resource Management (“SHRM”) and a volunteer leader of its Advocacy Team, I joined more than 400 of my HR peers on Capitol Hill this week to meet with members of the Senate and House of Representatives.  As always, it was an exciting opportunity to be part of our democracy in action! Although legislative advocacy isn’t for everyone—my wife imagines it as slightly less enjoyable than enduring several consecutive root canal surgeries—I’m always energized by my discussions of the issues!   

Below is a brief outline of the three primary issues that were on the agenda: Employer Educational Assistance, Student Loan Repayment, and the Work Opportunity Tax Credit.

What $1 bought   In 1978, I was 15 years old, Jimmy Carter was President, the average cost of a new car was $6,379 (unleaded gas was $0.65/gal), and average amount for college tuition, room, and board totaled $2,587. Also, in 1978, President Carter signed a bill that modified Internal Revenue Code (“IRC”) Section 127, allowing employers to provide eligible employees up to $5,250 per year in tax-free college tuition assistance. Today, more than 40 years later, IRC §127 still caps employer-provided educational assistance at $5,250. Enter House bill H.R. 4849, a bipartisan effort to increase this tax-free employee benefit to $11,500, and then index the amount for inflation going forward. Although, to date, no companion bill has been introduced in the Senate, I’ll be watching this important legislation and will keep you up to date with any developments.

Who can afford that?!   Federal estimates show that 44 million Americans have student loan debt. What’s worse, according to a recent Pew Research Center study, student loan debt has reached approximately $1.5 trillion and continues to grow. (Pause for dramatic effect.) With student loan debt having more than doubled over the last 10 years, and decades of loan payments ahead, other financial activities and life events are being ignored, or at least significantly delayed. Contributions to 401(k) retirement accounts, purchasing a home, or simply living independently has become a seemingly impossible dream for many. Enter House of Representatives bill H.R. 1043, and a Senate companion bill S. 460, each called the Employer Participation in Repayment Act. Under this exceptionally bipartisan legislation, existing employer educational assistance (IRC §127)—which is restricted to tuition assistance only—would be expanded to allow employers to provide eligible employees student loan repayment as a form of tax-free educational assistance. With a substantial number of co-sponsors from both sides of the aisle, Washington insiders are cautiously optimistic about this legislation.  

What’s a WOTC?   The Work Opportunity Tax Credit (“WOTC”) is set to expire on December 31, 2019. Who cares, right? Enacted in 1996 as a temporary federal tax credit, they are available to employers that hire and retain individuals from groups that traditionally face significant barriers to employment. These groups include military veterans, individuals with disabilities, the formerly incarcerated, and the long-term unemployed. Historically, employers have claimed approximately $1 billion in tax credits annually under WOTC. Although renewed by Congress several times since 1996, it’s time to make WOTC a permanent part of the Internal Revenue Code. Introduced by Representatives Mike Thompson (D-CA) and Tom Reed (R-NY), H.R. 2213, the Work Opportunity Tax Credit and Jobs Act would make WOTC permanent. In the Senate, the companion bill, S. 978, was introduced by Senators Ben Cardin (D-MD) and Rob Portman (R-OH). Consider these facts: since 1996, WOTC has helped move 24 million individuals from public assistance to the workforce, and in the last decade, WOTC has saved an estimated $202 billion, with savings of $20.2 billion in fiscal-year 2018 alone.    

That’s so retro!   The WOTC has been renewed several times over the last 22 years; however, it’s rarely occurred before the credit expired. Historically, Congress has renewed WOTC weeks, or sometimes months after its expiration, and the credit has always been retroactive to the expiration date. However, the employer must file the necessary forms (Form 8850) for WOTC-eligible employees with the appropriate state agency within the required 28 calendar days from the employee’s start date. So, if the credit expires on December 31, 2019, employers should continue to submit the WOTC forms on time. Failing to do so will preclude an employer from receiving credits for otherwise eligible employees hired during the “dark” period. Stay tuned!

I agree!   Although I’m sure many of you agree with my wife’s assessment of the legislative advocacy process, I hope some of you have even the slightest interest in making your voice heard on these, or other issues. The first step is to identify your Senators and House Member, then call, write, or even tweet what’s on your mind! 

Thanks for spending a small part of your day with me, and have a great weekend! 


Posted by Frank Cania, president of HR Compliance Experts LLC.

Please feel free to contact Frank at frank@hrcexperts.com, or 585-380-1566 with questions or for more information.


Disclaimer: This content is for informational purposes only, does not constitute a legal opinion, and is not legal advice. The facts of each situation should be considered and analyzed individually. Therefore, you should always consult with competent employment counsel regarding any issues discussed here.

CLICK HERE to learn more about Frank Cania and HR Compliance Experts LLC.

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