Sponsors (138)
Official title: To amend the Internal Revenue Code of 1986 to end the tax subsidy for employer efforts to influence their workers' exercise of their rights around labor organizations and engaging in collective action.
Introduced April 7, 2025 by Donald Norcross · Last progress April 7, 2025
The bill shifts incentives to curb employer anti-union spending—strengthening workers' ability to organize and increasing tax transparency—at the cost of higher employer tax and compliance burdens, legal uncertainty, and the risk that some lawful employer-employee communications or hiring/investment may be reduced.
Union members and workers (especially middle-class families) would face fewer employer-funded interference efforts and stronger enforcement of labor rights, making it easier for employees to organize and improve collective bargaining outcomes.
Employers would likely reduce costly anti-union persuasion spending (because it becomes nondeductible), freeing resources that could be redirected toward higher wages, benefits, or business investment.
Tax reporting and enforcement rules would increase transparency about employer spending related to labor organization activity, improving IRS oversight and taxpayer visibility into these expenditures.
Small and medium employers could face higher after-tax costs and new compliance burdens (e.g., loss of deductions for certain communications and wages), which may be passed to consumers, reduce hiring, or squeeze margins.
New heavy reporting requirements and civil penalties (base fines plus per-employee escalation) raise administrative burdens and the risk of sizable fines for employers, increasing legal and accounting costs.
Broad, Secretary‑authorized definitions of taxable/nondeductible activities create legal uncertainty about which employer communications are subject to penalty or nondeductibility, complicating HR and legal planning across jurisdictions.
Based on analysis of 3 sections of legislative text.
Disallows federal tax deductions for employer spending intended to influence employees about labor organizations, elections, disputes, or collective activity.
Denies business tax deductions for employer spending intended to influence employees about labor organizations, union elections, labor disputes, or collective activity. It adds definitions and exceptions to the Internal Revenue Code to identify covered payments, reporting requirements, and what counts as ‘‘attempting to influence’’ workers on labor matters. The law narrows IRC section 162(e) by specifying categories of employer costs that are nondeductible when tied to anti‑union or union‑influencing activity (including certain meetings, trainings, outside consultant spending, and LMRA‑reportable payments). It also inserts statutory definitions referencing the NLRA and Railway Labor Act to define covered terms and creates reporting and definitional rules for administration and enforcement.