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WASHINGTON, D.C. – Congressman Steven Palazzo (R-MS) and Congressman Tim Ryan (D-OH) have reintroduced the Reserve Component Employer Incentive, Compensation, and Relief Act of 2019 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 National Guard and Reserves are activated, this legislation incentivizes employers to hire and retain Guard members and reservists.

“Often times National Guardsmen and Reservists have unique demands that require them to drop everything and respond to their sworn military duties. This bill is a step in the right direction to provide relief for the employers that sometimes must choose between their own bottom line and patriotic duty to hire service members,” said Congressman Palazzo.

“Employers who hire National Guardsmen or Reservists do so with the knowledge that these employees may need to miss work for training or answer the call to defend our country,” said Congressman Ryan. “This legislation will provide these patriotic employers with well-warranted compensation for hiring servicemembers who sacrifice so much for our nation. Maintaining this partnership between our country and employers is critical to the security of our nation.”

Having transitioned from a “Strategic Reserve” to an “Operational Reserve,” the National Guard and Reserve 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 Fellowship 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.

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).

“EANGUS applauds Representative Tim Ryan for reintroducing the Reserve Component Employer Incentive Compensation and Relief Act that provides employers an annual tax credit for every Reservist/Guardsman employed. As Citizen-Soldiers, our members heavily rely on their employers for supporting their families and maintaining their jobs when deployed or in training. This common sense bill enhances the significant role employers play in military readiness. We strongly support this legislation,” said retired Sgt. Maj. Frank Yoakum, EANGUS executive director.

“This is a potential game-changer for employers who hire Guardsmen and Reservists or who are considering one for a position,” said retried Brig. Gen. J. Roy Robinson, the NGAUS president. “Not only would it compensate employers for the loss of valuable employees to training or a deployment, it also recognizes the contributions of Guard and Reserve employers to the defense and security of our nation. We enthusiastically support the Reserve Component Employer Incentive, Compensation, and Relief Act.”  

Specifically, the Reserve Component Employer Incentive, Compensation, and Relief Act of 2019 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 2019, click here for the full bill text.