Bill Currently Making Its Way

¶ … bill currently making its way through the legislative process that would promote labor force participation of older workers. The writer examines the importance of older workers, as well as how this bill would impact corporations across the nation. The bill provides a tax credit to those who employ older workers that fit the criteria set out for the tax credit. There were two sources used to complete this paper.

Tax Credit Bill Designed to Encourage the Employment of Older Workers

For many years, potential employees were politely interviewed then never called back to accept the position. There was a general mindset that they could not work as hard, or as fast or as well as their younger peers could work. The advances in medical science have begun to change the way the older population is viewed. People are living longer than ever before and with that longevity come the desire to stay busy and contribute to society well into the "golden years."

One of the problems that the older generation is encountering however is the attitude toward their contribution to the workforce. When a person reaches a certain age they suddenly find themselves "unemployable" even when they are highly skilled and experienced in the field.

A bill recently introduced to Congress and making its way across the legislative floors will provide a tax credit to corporations that employer older workers. This bill is being used as the backdrop to encourage an older workforce.

Over the past five decades the demographic makeup of the labor force has been slowly changing. "In 1950, there were seven working age people for every elderly person in the United States. By 2030, there will be only three. The aging workforce represents a major economic challenge at home and abroad. The question is -- how will society and world leaders address this challenge (Lockwood, 2003)?"

Older workers are defined differently in different field of employment. For the most part however, an older worker is a worker that is more than 45-50 years old with senior workers being 60-75 years old (Lockwood, 2003).

The Age Discrimination in Employment Act of 1967 (ADEA) identifies any worker past the age of 40 as an older worker (Lockwood, 2003).

With the advances of medical science allowing people to live longer than ever before and the number of baby boomers coming up on retirement one study suggests that the age of an older worker be moved to 51, however the Committee for Economic Development's New Opportunities for Older Workers believes it should be held at 45 and older (Lockwood, 2003).

There are many changes taking place in the American workforce with regards to older workers including:

Since 1950, the number of people aged 65 and older in the United States has increased from 8% to 12%(Lockwood, 2003).

By the end of 2002, the number of older workers in the labor force aged 55 to 64 -- employed or seeking work -- increased to 62.9%, the highest level during the postwar era (Lockwood, 2003).

According to the U.S. Bureau of Labor Statistics, more than 25% of the working population will reach retirement age by 2010, resulting in a potential worker shortage of nearly 10 million (Lockwood, 2003)."

There are federal laws in place that protect older workers from being discriminated against however there is no way of knowing when a potential employee is passed over in favor of a younger candidate simply because of age (Lockwood, 2003).

While the protective measures in government prohibit workers from being forced into retirement at early ages, it cannot be ascertained how many older workers simply don't get hired to begin with because of the age bracket they are in.

Research has shown that older workers have a better overall work attitude, attendance and job performance record than their younger counterparts do, leaving the only reasons for discrimination is their age (Lockwood, 2003).

The bill being currently introduced to the federal legislative bodies will provide financial incentives for companies to hire older workers. The bill is designed to give corporations a reason to hire older workers and to retain them on the payroll each year by providing a tax incentive on an annual basis for each qualified older worker that the corporation employs (Older Worker Opportunity Act of 2007 (Introduced in Senate) (http://thomas.loc.gov/cgi-bin/query/D-c110:223:./temp/~c110wsEq1c).

The cited purpose of the bill is to "promote labor force participation of older Americans, with the goals of increasing retirement security, reducing the projected shortage of experienced workers, maintaining future economic growth, and improving the Nation's fiscal outlook (Older Worker Opportunity Act of 2007 (Introduced in Senate) (http://thomas.loc.gov/cgi-bin/query/D-c110:223:./temp/~c110wsEq1c)."

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.