A new legislative proposal introduced in the House and Senate would establish a tax credit for employers who invest in employee training on emerging technologies, such as artificial intelligence.
The Investing in American Workers Act, led by Rep. Raja Krishnamoorthi, D-Ill., and Sen. Mark Warner, D-Va., seeks to encourage employers to provide training for their workforce that would result in certified postsecondary credentials so that they can adapt to new and evolving technologies.
Lower- and middle-income employees specifically are targeted by the legislation, as the proposal aims to make affordable and employer-supported training more available.
“As artificial intelligence and automation transform nearly every sector of our economy, the question isn’t whether jobs will change – it’s whether workers will be given a fair shot to keep up,” Warner explained in a statement.
“This bill applies a proven model, the R&D (research and development) tax credit, to incentivize employers to offer workforce training, so workers can build new skills, businesses can stay competitive, and the benefits of technological change are more widely shared,” he added.
The lawmakers noted that while the current tax code offers an R&D tax credit for employer investments in technology and capital assets, it does not do the same for workforce training.
“Businesses across the country are still struggling to find workers with the training needed for today’s jobs, and workers need better access to affordable, employer-supported opportunities to build new skills,” Krishnamoorthi said. “This legislation expands access to high-quality training programs that help workers move into good, stable careers while strengthening the competitiveness of our businesses and growing the middle class.”
Skills gaps related to emerging technologies are one of the most pressing challenges facing the global workforce today, research from the World Economic Forum recently found, especially skills tied to AI, big data, and technology literacy.
To address this, the bill would give a tax credit to employers who increase spending on employee training that is equal to 20% of increased training expenditures for eligible employees who earn less than $96,000 annually.
Trainings emphasized by the legislation include industry-aligned programs through registered apprenticeships, WIOA-certified programs, community college and career and technical education programs, and employer-sponsored training for recognized postsecondary credentials.
Under the legislation, small businesses would be encouraged to participate by applying the credit against payroll taxes through a simplified filing process.
The bill has some support from major workforce nonprofits and organizations, including Workday and the National Skills Coalition.