Sen. Chris Van Hollen (D-Md.) has introduced new legislation that would make the president's payroll tax deferral optional for federal employees and servicememb...
Members of Congress made their latest attempt Friday to give federal employees and servicemembers a choice to participate in the president’s payroll tax deferral.
Sen. Chris Van Hollen (D-Md.) introduced new legislation, the Protecting Employees from Surprise Taxes Act, which would simply make the president’s payroll tax deferral optional.
Anyone who chooses to participate must provide written consent to their employer, according to the legislation. The bill applies to all employees and employers, including federal employees and servicemembers.
The executive branch is one of the few, if not only, employers enforcing the payroll tax deferral policy. Few private sector employers have chosen to implement it, and other government entities not in the executive branch have made similar decisions. The U.S. Postal Service announced late last month it wouldn’t implement the president’s payroll tax deferral for its workforce.
Van Hollen’s bill has 15 co-sponsors, all of them Democrats. More than a dozen federal employee organizations and unions have also endorsed the legislation, including the American Federation of Government Employees, National Treasury Employees Union, National Federation of Federal Employees, Senior Executives Association, Professional Managers Association and the National Active and Retired Federal Employees Association.
“The federal government — or any employer — should not force its employees to take on debt through deferred payroll taxes that must be repaid next year,” Ken Thomas, NARFE national president, said in a statement. “This bill would give employees the choice, placing the decision-making authority in the hands of the individual affected, where it ought to be.”
It’s unclear when exactly the Senate would consider this bill in time to make a difference for federal employees and servicemembers, with Supreme Court nomination hearings scheduled to begin next week and the prospects of COVID-19 stimulus bill negotiations changing by the hour.
The concept of making the payroll tax deferral optional, however, does have some bipartisan support. A group of 43 House members asked Treasury Secretary Steven Mnuchin last week to give federal employees and servicemembers a choice in participating in the deferral. More than 20 senators, including at least one Republican, have also written to the administration with their concerns.
The major federal payroll providers began deferring Social Security taxes from employees’ and servicemembers’ paychecks last month. Employees and military members whose basic, taxable income is $4,000 or less during a biweekly pay period are subject to the deferral.
The deferral is expected to run through the end of the year. Federal employees and servicemembers will need to pay deferred taxes back over the course of next year’s paychecks from January through April.
Meantime, military officials, unions and lawmakers have worried the payroll tax deferral will come as a surprise to the civilian and military workforce, especially young servicemembers, who will see the extra cash in their paychecks now and spend it, leaving them unprepared to pay it back in 2021.
In a recent Senate hearing, Mnuchin told Van Hollen “it was reasonable” if federal employees didn’t want to participate in the payroll tax deferral. He said he would follow up with the Office of Management and Budget, which is in charge of the policy’s implementation in the executive branch.
Besides Van Hollen’s payroll tax deferral legislation, here are a few other bills to watch.
Sen. Mark Warner (D-Va.) recently introduced legislation that would require agencies to set and publish specific safety protocols for their employees returning to their offices or work sites.
The House passed the bill last week. Lawmakers named the legislation after Chai Suthammanont, a federal employee who died due to complications from COVID-19 earlier this year.
Specifically, the bill would compel agencies to publish their reopening plans up to 30 days before employees are expected to return. The plans must detail what personal protective equipment they plan to provide employees, additional cleaning procedures, protocols for visitors entering their buildings and guidelines for implementing telework and leave policies.
Agency inspectors general must evaluate these plans and report back to Congress.
Again, it’s unclear when the Senate might take up this bill, though it could make its way into larger legislative package before the year ends.
Several IGs have already committed to investigations of their agencies’ reentry plans for employees, according to an ongoing congressional effort to track their reviews.
Congress has been interested in preserving federal employee leave for much of the pandemic.
Reps. Derek Kilmer (D-Wash.), Jennifer Wexton (D-Va.), Don Beyer (D-Va.), and Gerry Connolly (D-Va.), have introduced the Federal Worker Leave Fairness Act as a solution.
The bill would allow all federal employees to carry over leave accrued during the pandemic. Under current policy, most federal employees can carry up to 30 days of leave to the following year, though some can accrue more. Employees with leave that exceeds that cap must use or lose it before the year ends.
Sens. Mazie Hirono (D-Hawaii) and Brian Schatz (D-Hawaii), Sherrod Brown (D-Ohio), Patty Murray (D-Wash.), Bernie Sanders (I-Vt.), Tammy Duckworth (D-Ill.), Ben Cardin (D-Md.) and Elizabeth Warren (D-Mass.) have introduced a Senate companion.
The Office of Personnel Management has recognized the pandemic’s impact on some federal workers’ leave banks.
It issued a new policy over the summer allowing certain federal employees to carry over the annual leave they’d otherwise have to forfeit at the end of the year because their services are needed during the pandemic.
But those regulations apply only to federal workers deemed “essential” during the health crisis, and it’s up to each agency to determine who specifically fits that bill.
Federal employees who canceled their vacation plans due to a pandemic-related travel restriction, for example, aren’t covered under OPM’s new policy, but they would be under this new bill.
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Nicole Ogrysko is a reporter for Federal News Network focusing on the federal workforce and federal pay and benefits.
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