Employer credit for paid family and medical leave

(a)

In general

(1)

Allowance of credit

Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

45S.

Employer credit for paid family and medical leave

(a)

In general

For purposes of section 38, in the case of an eligible employer, the paid family and medical leave credit is an amount equal to 25 percent of the amount of wages paid to qualifying employees during any period in which such employees are on family and medical leave. (b)

Limitations

(1)

In general

The credit allowed under subsection (a) with respect to any employee for any taxable year shall not exceed the lesser of— (A)$4,000, or (B)the product of the wages normally paid to such employee for each hour (or fraction thereof) of services performed for the employer and the number of hours (or fraction thereof) for which family and medical leave is taken.

For purposes of subparagraph (B), in the case of any employee who is not paid on an hourly basis, the wages of such employee shall be prorated to an hourly basis under regulations established by the Secretary, in consultation with the Secretary of Labor.

(2)

Maximum amount of leave subject to credit

The amount of family and medical leave that may be taken into account with respect to any employee under subsection (a) for any taxable year shall not exceed 12 weeks. (c)

Eligible employer

For purposes of this section— (1)

In general

The term eligible employer means any employer who has in place a policy that meets the following requirements: (A)The policy provides— (i)all qualifying full-time employees with not less than 4 weeks of annual paid family and medical leave, and (ii)all qualifying employees who are not full-time employees with an amount of annual paid family and medical leave that bears the same ratio to 4 weeks as— (I)the number of hours the employee is expected to work during any week, bears to (II)the number of hours an equivalent qualifying full-time employee is expected to work during the week. (B)The policy requires that the rate of payment under the program is not less than 100 percent of the wages normally paid to such employee for services performed for the employer. (2)

Special rule for certain employers

(A)

In general

An added employer shall not be treated as an eligible employer unless such employer provides paid family and medical leave under a policy with a provision that states that the employer— (i)will not interfere with, restrain, or deny the exercise of or the attempt to exercise, any right provided under the policy, and (ii)will not discharge or in any other manner discriminate against any individual for opposing any practice prohibited by the policy. (B)

Added employer; added employee

For purposes of this paragraph— (i)

Added employee

The term added employee means a qualifying employee who is not covered by title I of the Family and Medical Leave Act of 1993. (ii)

Added employer

The term added employer means an eligible employer (determined without regard to this paragraph), whether or not covered by that title I, who offers paid family and medical leave to added employees. (3)

Treatment of State-paid benefits

For purposes of paragraph (1), any leave which is paid by a State or local government shall not be taken into account in determining the amount of paid family and medical leave provided by the employer. (4)

No inference

Nothing in this subsection shall be construed as subjecting an employer to any penalty, liability, or other consequence (other than ineligibility for the credit allowed by reason of subsection (a)) for failure to comply with the requirements of this subsection. (d)

Qualifying employees

For purposes of this section, the term qualifying employee means any employee (as defined in section 3(e) of the Fair Labor Standards Act of 1938) who has been employed by the employer for 1 year or more. (e)

Family and medical leave

For purposes of this section, the term family and medical leave means leave for any purpose described under subparagraph (A), (B), (C), (D), or (E) of paragraph (1), or paragraph (3), of section 102(a) of the Family and Medical Leave Act of 1993, whether the leave is provided under that Act or by a policy of the employer. Such term shall not include any leave provided as paid vacation leave, personal leave, or medical or sick leave (within the meaning of those 3 terms under section 102(d)(2) of that Act). (f)

Wages

For purposes of this section, the term wages has the meaning given such term by subsection (b) of section 3306 (determined without regard to any dollar limitation contained in such section). Such term shall not include any amount taken into account for purposes of determining any other credit allowed under this subpart. (g)

Election To have credit not apply

(1)

In general

A taxpayer may elect to have this section not apply for any taxable year. (2)

Other rules

Rules similar to the rules of paragraphs (2) and (3) of section 51(j) shall apply for purposes of this subsection.

(b)

Credit part of general business credit

Section 38(b) of the Internal Revenue Code of 1986 is amended by striking plus at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting , plus, and by adding at the end the following new paragraph:

(37)in the case of an eligible employer (as defined in section 45S(c)), the paid family and medical leave credit determined under section 45S(a).

(c)

Credit allowed against AMT

Subparagraph (B) of section 38(c)(4) of the Internal Revenue Code of 1986 is amended by redesignating clauses (vii) through (ix) as clauses (vii) through (x), respectively, and by inserting after clause (vi) the following new clause:

(vii)the credit determined under section 45S,

(d)

Conforming amendments

(1)

Denial of double benefit

Section 280C(a) of the Internal Revenue Code of 1986 is amended by inserting 45S(a), after 45P(a),. (2)

Election to have credit not apply

Section 6501(m) of such Code is amended by inserting 45S(g), after 45H(g),. (3)

Clerical amendment

The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:

Sec. 45S. Employer credit for paid family and medical leave.

(e)

Effective date

The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.