WASHINGTON, D.C. – Today, U.S. Representative Tim Walz (MN-01) introduced the Reserve Component Employer Incentive, Compensation, and Relief Act of 2018 in the U.S. House of Representatives. By providing employers with a tax credit aimed to offset costs accrued and hardships undertaken when employees that are members of the Reserve Component (comprised of both the National Guard and Reserves) are activated, this legislation incentivizes employers to hire and retain Guard members and reservists. Reps. Steven Palazzo (R-MS) and Tim Ryan (D-OH) joined Walz in introducing this piece of legislation.

“Guard members and reservists are hard workers with highly sought-after skills and experience. It’s no surprise that America’s employers want to hire them,” said Rep. Walz. “This legislation empowers employers to do just that while ensuring the topnotch workforce of the Reserve Component doesn’t have to choose between serving our nation in uniform and maintaining a job to support their families.”

“The men and women who serve this nation in uniform are some of the brightest and hardest working Americans we have, but because of their unique service requirements, their employers often have to make sacrifices to keep them during their guard service,” said Rep. Steven Palazzo. “Incentivizing these civilian employers to continue employing our National Guard Soldiers is a no brainer, and a win-win for all.”

“Employers who hire National Guard or Reserve servicemembers do so with the knowledge that these employees may need to miss work for training and may need to deploy to defend our country,” said Rep. Tim Ryan. “This legislation will provide these patriotic employers with an appropriate level of compensation for hiring servicemembers who sacrifice so much for our nation.”

Having transitioned from a “Strategic Reserve” to an “Operational Reserve,” the Reserve Component is fully integrated in ongoing national security missions around the globe. This transition has led to increased training requirements which go beyond the statutorily required 39 days of annual training to requirements totaling 80 or more days per year.

Moreover, tax credits in the past have been targeted at too small a population and were too small monetarily to truly incentivize companies and small business to hire members of the National Guard and Reserves. Further, a study conducted by Members of the Minnesota National Guard enrolled in the Hubert H. Humphrey Policy Fellows Program at the University of Minnesota found the following:

• Whether big or small, employers are very patriotic and willing to shoulder an inordinate burden, but all agreed that there should be some type of benefit/compensation provided.
• 30 days of continual absence is the threshold that causes issues for employers of all sizes.
• Employers prefer a continuous absence versus many small absences (60 days vs. multiple 2-4-week periods).
• Absences for training causes more friction than absence for a deployment.
• Small businesses that employ Reserve Component service members would benefit the most from any employer compensation model.
• Rarely do employers hire temporary employees to cover the reservist’s absence from the workplace.  Work often must be picked up by fellow employees.

“The impact of the Minnesota National Guard's increased operations tempo and readiness requirements in support of our nation have not only been felt by our soldiers, airmen, and their families, but by their employers as well,” said Brig. Gen. Sandra Best, Deputy Adjutant General, Minnesota National Guard. “We are supportive of civilian employment initiatives that assist our dedicated citizen soldiers and airmen.”

For the first time, the Reserve Component Employer Incentive, Compensation, and Relief Act provides long overdue continuous benefits for all employers of actively serving members of the Reserve Component and provides a scalable benefit for those employers that experience extended absences of employees for military service. 

The Reserve Component Employer Incentive, Compensation, and Relief Act is endorsed by the Enlisted Association of the National Guard of the United States (EANGUS) and the National Guard Association of the United States (NGAUS).

“As part of the triad of support of our National Guard members who are called to military duty as Soldiers and Airmen, our employers play a vital role in the security of this nation,” said Frank Yoakum, Executive Director, EANGUS. “This bill recognizes that role by ensuring our citizen Soldiers and Airmen retain their jobs as they answer the call to defend America.” 

“On behalf of the 45,000 members of the National Guard Association of the United States (NGAUS) and the nearly 500,000 soldiers and airmen of the National Guard, please accept our sincere thanks for your leadership in introducing the Reserve Component Employer Incentive, Compensation and Relief Act,” said J. Roy Robinson, Brigadier General (Ret.), President, NGAUS. “After nearly twenty years of the National Guard providing an integral role in our nation’s war on terror, we often neglect to remember the sacrifices also made by our civilian employers. This legislation is an important first step in recognizing the partnership between the nation and employers.”

Specifically, the Reserve Component Employer Incentive, Compensation, and Relief Act of 2018 accomplishes the following:

• Amends the Internal Revenue Code of 1986 to provide a reservist employment credit.  An employer can elect to have the tax credit not apply.
• The credit amount is equal to the sum of the credit for each reservist employed by an eligible employer during the taxable year.
  
• The reservist credit amount is equal to $1,000 plus an additional amount dependent on the days of service in uniform during such year.
  
  • 30 to 89 days of service equates to $3,000
  • 90 to 179 days of service equates to $5,000
  • 180 plus days of service equates to $10,000

A key difference between the Reserve Component Employer Incentive, Compensation, and Relief Act and similar past efforts is that this tax credit applies to all employers that hire and employ actively serving members of the Reserve Component.

To learn more about the Reserve Component Employer Incentive, Compensation, and Relief Act of 2018, click here for a fact sheet and here for the full bill text.

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