US authorities have taken several steps to restrict foreign workers from getting hired by American firms. Now, even US lawmakers are introducing bills that aim to reduce or end American firms’ hiring of foreign workers.
Senator Bernie Moreno (R-Ohio) has introduced the Halting International Relocation of Employment Act, or HIRE Act, to protect American workers from outsourcing by disincentivizing U.S. companies from chasing cheaper wages and hiring foreign workers.
The HIRE Act
The HIRE Act proposes to introduce a 25% tax on outsourcing payments, defined as any money paid by a U.S. company or taxpayer to a foreign person whose work benefits consumers in the United States.
The newly proposed tax shall apply to payments made after December 31, 2025.
The legislation will impose a tax on any company that employs foreign labor instead of Americans and will use the generated revenue to fund workforce development programs that help the middle class.
The HIRE Act Tax
HIRE Act aims to amend the Internal Revenue Code of 1986 to impose an excise tax on payments by United States taxpayers to foreign persons for services provided to United States consumers, and for other purposes.
The HIRE Act imposes a tax on any United States person making an outsourcing payment, a tax equal to 25 percent of the amount of such payment.
“While college grads in America struggle to find work, globalist politicians and C-Suite executives have spent decades shipping good-paying jobs overseas in pursuit of slave wages and immense profits – those days are over,” said Moreno.
“It’s time to fight for working-class Americans and ensure they can work and retire with dignity. If companies want to hire foreign workers instead of Americans, my bill will hit them where it hurts: their pocketbooks.”
The HIRE Act also aims to establish a ‘Domestic Workforce Fund’ to collect funds raised from the outsourcing tax, which will be used to support apprenticeships and workforce development programs.
Further, the HIRE Act prohibits companies from deducting any outsourcing payments, which makes the new tax payments as a non-tax-deductible item.
Even a tax on the earnings of OPT students is being targeted. US lawmakers have proposed taxing international students’ earnings from the Optional Practical Training (OPT) program. Foreign students working in the United States under the OPT program are now exempt from paying FICA taxes. If the Act is passed, overseas students will be required to pay these taxes.