The bill is going to provide tax benefits for eligible workers at companies that meet the criteria to receive the tax credit.
A flexible work credit is going to be determined to be 25% of qualified wages each tax year.
The employer will have to meet certain requirements in order to qualify for the credit. These qualifications include the fact that the employer must provide health coverage to the employee and pay at least 60% of the premium for that coverage.
There are other restrictions as well including a cap of $6,000 a year in wages eligible for the tax credit possibility.
While many aging worker organizations believe that older workers are 45 and older, the bill will only cover workers who are beyond the age of 62.
The employee must be a flexible work program however, "such term shall not include any individual who begins participation in a formal flexible work program during any period in which more than 20% of the employees of the eligible employer are already participating in a formal flexible work program (Older Worker Opportunity Act of 2007 (Introduced in Senate) (http://thomas.loc.gov/cgi-bin/query/D-c110:223:./temp/~c110wsEq1c)."
In general the term 'formal flexible work program' means a program of an eligible employer-- which consists of core time and flex time, under which core time does not exceed
20 hours per week, days per week, or 1,000 hours per year, and which meets the requirements of subsection (Older Worker Opportunity Act of 2007 (Introduced in Senate) (http://thomas.loc.gov/cgi-bin/query/D-c110:223:./temp/~c110wsEq1c)"
The employee is required to pay the same percentage of wages to health insurance premiums that non-program workers pay.
Benefits of Bill
The bill will provide a very positive step toward the promotion of older workers because it will allow employers to claim a tax credit on their taxes for hiring and retaining such workers.
In addition the qualifications that are in place for an older worker to be eligible for the program will insure that corporations cannot simply hire a bunch of older workers and mistreat them or give them substandard pay, hours and benefits simply to be able to collect on the tax credit that this bill provides.
The bill is set up in such a manner that for the employer to reap the benefits of the tax credit the employer will have to provide a stable, and beneficial work environment to the older workers that is equal to the program and environment that the younger workers enjoy.
The older workers who will qualify their employers for the tax credit will also be required eligible to participate in any retirement savings plan and they cannot be excluded from said plan for any reason other than their opting out of the plan.
The restrictions and requirements of this bill will make it a safety feature for older employees as they begin to get hired by large corporations and provided with solid and equal benefits as compared to their younger counterparts.
The provision of the bill that requires that the employee wages be close to if not equal to those of peer wages is an important one. "Most research on older workers focuses on individuals approaching traditional retirement ages of 55 to 65, there has been little research on the labor supply of individuals aged 65 and older, sometimes referred to as "the elderly (Lockwood, 2003)." The Center for Retirement Research at Boston College's (CRR) Elderly Labor Supply: Work or Play notes that "the labor supply of the elderly is concentrated among the healthiest, wealthiest, and most educated individuals, and yet they earn very low wages (Lockwood, 2003). Nearly 70% of individuals aged 70 and above earn wages in the bottom quintile of the overall wage distribution of those aged 50 to 61(Lockwood, 2003)."
This bill will provide a benefit to corporations with a healthy 25% tax credit on wages for older workers while at the same time provide stop gap measures to be sure corporations do not hire older workers to get the tax credit without treating them with respect and fairness once they are employed.
It is an excellent bill that will provide a positive element for everyone involved.
Lockwood, Nancy R (2003) the aging workforce: the reality of the impact of older workers and eldercare in the workplace.(2003 SHRM[R] Research Quarterly)
Older Worker Opportunity Act of 2007 (Introduced in Senate)
709 IS 110th CONGRESS 1st Session (accessed 4-26-07)