Payroll-Related Legislation Still Pending as Congress Prepares for Summer Recess

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As the 113th Congress prepares to take its five-week summer break starting Aug. 2, several proposals affecting payroll practices remain to be addressed for the rest of the session.  

Additionally, an overhaul of the nation's income tax system would eliminate several payroll-related tax benefits, according to a draft of possible legislation.

The Mobile Workforce State Income Tax Simplification Act of 2013 would prevent mobile employees who perform duties in more than one state from being taxed by multiple states for a period of time. Under the proposal, employees would be taxed in the state they reside and only would be taxed on income earned in other states if they conduct business for more than 30 days in those states in a year.

In the House, hearings on the measure were held April 29, 2014.

A similar bill proposed in the 112th Congress was passed by the House; the Senate took no action on the measure.

Not considered under the bill would be income of professional athletes, professional entertainers and prominent public figures who perform services for wages or other remuneration on a per-event basis.

Status of Minimum-Wage, Tax-Reform Initiatives

Several bills were introduced to increase the federal minimum wage in increments to $10.10 an hour by 2017, with subsequent adjustments for inflation (H.R. 1010, S. 460, S. 1737 and S. 2223).

H.R. 1010 and S. 460 would increase the federal minimum wage to $8.20 an hour three months after enactment. The hourly rate would increase to $9.15 one year later and to $10.10 two years later. Qualified tipped employees could be eligible for a minimum wage of $3 an hour, up from $2.13 an hour, and later 70 percent of the minimum wage under the pending legislation.

An attempt by the Senate to consider and approve S. 2223 failed in April.

With several states approving higher minimum wage requirements, Congress may revisit this issue before the 113th session ends.

Other payroll-related proposals left to be considered by Congress include the Working Families Flexibility Act of 2013 (H.R. 1406), which would allow private employers to provide voluntary paid time off to employees at a rate of 1.5 times an hour as compensatory time in lieu of required overtime pay. The bill was approved May 8, 2013, by the House and has not been taken up by the Senate.

Earlier this year, House Ways and Means Committee Chairman Dave Camp (R-Mich.) circulated a draft of the proposed Tax Reform Act 2014. The proposal would repeal several tax code areas, including the exclusion for employee achievement awards, the $5,250-a-year employer-provided educational assistance exclusion and the tax exclusion for business-related moving expenses. There was no formal introduction of the proposal as legislation.

Congress is scheduled to return from its summer recess Sept. 8 and the congressional session is to end in December.

To contact the editor responsible for this story: Michael Baer at mbaer@bna.com