Sponsors (134)
The bill strengthens workers' ability to organize and increases transparency by denying deductions and adding reporting around employer anti-union spending, but it also raises compliance costs, fines, and legal uncertainty that could increase business costs, chill some employer-employee communications, and affect hiring or prices.
Workers (especially union organizers and rank-and-file employees) would face fewer employer-funded anti-union persuasion efforts when voting, increasing their ability to form or join unions and negotiate collectively.
Employers would have reduced tax incentives to run costly union-avoidance campaigns, likely lowering corporate spending on persuasion efforts and potentially freeing resources for higher wages or business investment.
Stronger enforcement and clearer reporting around labor-related spending could improve compliance with the NLRA/RLA and lead to better bargaining outcomes and workplace protections for employees who organize.
Many employers (including small businesses) would face higher after-tax costs and new compliance burdens from loss of deductions and reporting obligations, which could be passed to consumers, curb hiring, or reduce investment.
New heavy reporting requirements and civil penalties (including per-FTE penalties and escalators) raise the risk of large fines and administrative costs for employers, increasing financial and regulatory exposure.
Broad, Secretary-authorized definitions and expansive rules about what counts as labor-related persuasion create legal uncertainty about which employer communications and activities are nondeductible, driving up legal and HR compliance costs.
Based on analysis of 3 sections of legislative text.
Denies federal tax deductions for employer spending intended to influence employees about labor organizations, elections, collective bargaining, or labor disputes and adds related definitions.
Introduced April 7, 2025 by Donald Norcross · Last progress April 7, 2025
Amends the federal tax code to deny business deductions for any employer spending intended to influence its employees about labor organizations, union elections, collective bargaining, or labor disputes. The change adds new definitions (for labor organization, labor organization activity, collective action, labor dispute, and labor organization election) and lists categories of employer payments that would be nondeductible, including certain wages, general & administrative costs tied to influencing employees, amounts for meetings or trainings, and amounts reportable under the Labor‑Management Reporting and Disclosure Act. The provision requires the Internal Revenue Code and Treasury to apply these new rules and definitions when determining deductible business expenses.