Exempting Overtime Pay from State Income Taxes

2023 Ideas Challenge Entry

Alabama Representative Anthony Daniels is leading the way to enhance workforce participation, grow the state’s economy, and help hard-working families hold onto more of their hard-earned income. His innovative new law, passed this year with strong bipartisan support, exempts from income taxation any hours worked beyond 40 hours per week by hourly waged employees. Exempting the 5% state income tax on time-and-a-half pay helps struggling families, businesses dealing with labor issues, and will help stimulate local economies.

 

The measure empowers workers in all sectors (agriculture, law enforcement, service industries, etc.) to pursue overtime as an avenue to advancement and economic prosperity. The law also includes all sectors and businesses. Furthermore, it does not require employees to work overtime hours if they choose not to, nor does it alter the implementation of the Fair Labor Standards Act or change who is a full-time employee or a part-time employee.

 

Impact:

With no state minimum wage, Alabama workers have not seen a minimum wage increase in nearly 15 years and continue to earn $7.25 an hour. The overtime tax exemption is a step to help many deal with rising prices and costs. The law is effectively a one-year pilot program for 2024. Its success will be tracked through data collection. Employers, both public and private, will report to the Alabama Department of Revenue the amount of overtime paid to full-time hourly employees and the number of employees who received that pay. The program will identify through the analysis of aggregate data, the following:

 – Increased spending, or “replacement spending,” including at local businesses, by workers receiving income-tax-exempted overtime compensation.

 – Increased workforce participation in Alabama’s overall labor force participation rate, the proportion of the working-age population that is either working or actively looking for work, is 56.9%.

Small Business Wage Boost

2023 Ideas Challenge Entry

Scranton Mayor Paige Cognetti’s Small Business Wage Boost program is an employee retention program designed to address the gap between the current working wage and a livable wage, funded by the American Rescue Plan Act (ARPA). Small businesses throughout the City of Scranton can apply for up to $50,000, disbursed over two years, to raise their employees’ wages closer to the state average.

In the program’s first year, Scranton used ARPA funding to fully fund the gap between the current wage and elevated wage. In year two, the City and business will share the responsibility of funding the higher wage. By the third year, the goal is for businesses to fully support their employees’ new wages. The Wage Boost program is an innovative approach to address a minimum wage in Pennsylvania that lags behind the needs of 21st century workers. By helping small businesses raise employees’ wages, it’s a win-win-win for the city: businesses can retain employees who might leave for other better paying jobs, employees can keep up with the cost of living, and the city retains tax-paying businesses.

Impact:

The program was announced to the community in October 2022. Across two rounds of funding announcements, nine businesses have received between $25,000 and $50,000 in wage boost grants to be used over the course of the next two years. A third round of applications opens late summer 2023. The program’s impact is seen in the potential economic mobility of the employees receiving higher wages, a reduction in turnover for employers, and the ongoing success of the businesses that have tapped into the program.

Creating a Diverse STEM Workforce by Leveraging Federal CHIPS Funding

2023 Ideas Challenge Entry

To directly address the gender, social, and racial gaps in STEM education and careers, Oregon Representative Janelle Bynum advocated for two new grant programs focused on leveraging federal CHIPS funding to build a diverse workforce for the future. The first grant ($1.2 million) went to Portland non-profit Self Enhancement Inc. to build a pipeline of diverse students who will be ready to gain employment in Oregon’s expanding semiconductor industry. The second grant ($2 million) went to Building Blocks 2 Success, which will create a semiconductor workforce pipeline by offering summer programming and college preparation for students intending to major in STEM fields at Historically Black Colleges and Universities (HBCU).

These grants, in addition to over $200 million from the Oregon CHIPS act, go above and beyond what other states are doing and will work to ensure that the lucrative semiconductor careers of the future are more equitably distributed and incorporate individuals who are often left out of economic development. Especially considering the Supreme Court’s recent decision on affirmative action, investing in students who will attend HBCUs is more important than ever to address the STEM education and career gap.

Impact

In the short term, Oregon will evaluate the success of these investments by seeing how much federal CHIPS funding comes to our state. This effort will help create a state economy hospitable for future generations to succeed and will help new cohorts of STEM professionals attain the economic and social securities that will bring diverse families and communities to new levels of prosperity and opportunity.

 

Maryland’s New Start Act

2023 Ideas Challenge Entry

Previously justice-involved citizens often find themselves without work or opportunities upon their reentry. Even fewer are able to go on to become small business owners or entrepreneurs. The New Start Act, introduced by Maryland Delegate Jazz Lewis, provides grant money to train returning citizens to be small business owners and with seed money to start their small businesses.

 

Impact:

Approved in 2022, the program has started accepting applications from nonprofits looking to provide training for returning citizens who would like to be small business owners. Graduates from the program are able to apply for funding for their business ideas so that they can turn their ideas into functioning and operating businesses. Success will be measured by looking at the graduates who go on to be entrepreneurial small business owners who move on with their lives to be active participants in their local economy.

E-3 Re-entry Program

2023 Ideas Challenge Entry

Chester County, PA Commissioner Josh Maxwell used federal American Rescue Plan Act funds to launch the county’s E3 (Exit, Enter, Employ) Re-entry Program, a free 12-week program that provides individuals exiting the justice system with a direct pathway to enter the manufacturing industry. This ”outside the box” initiative led by the Chester County Intermediate Unit (CCIU) helps to meet the workforce needs of the regions companies, particularly manufacturing employers, looking to find skilled people, and it trains those who can develop the skills, supporting them as they re-enter the community, and the workforce (annual need for 1,700 jobs). The county. 

 The CCIU developed the comprehensive skills training program, found interested employers to participate in the placement of graduates of the program, and provided participants with training in social skills, positive self-change, and problem-solving. The program consists of 45 hours of manufacturing training, cognitive behavioral therapy, and job readiness training. Upon completion of the program, students participate in a job fair where they meet and interview with local companies supporting the E3 program. Graduates are offered one year of follow-up support.

 

Impact:

 The Chester County Intermediate Unit (CCIU) has successfully completed 2 E3 Post Release program cohorts to date. Between the two cohorts, 9 participants successfully graduated, with the first cohort graduating 100% of those enrolled. Of the nine post-release graduates, five have successfully secured full-time employment-4 in manufacturing, one part-time employment, two graduates are currently interviewing with companies (from cohort 2 that graduated June 16), and two have not responded to efforts to maintain contact with our office following graduation.

Requirement for Employers to Post Minimum and Maximum Salary Information

2023 Ideas Challenge Entry

New York City Councilmember Nantasha Williams’s bill would revise local salary disclosure laws to clarify that the law that requires employers to include the minimum and maximum salary ranges that apply to both employees who are paid hourly and those who receive an annual salary. A person would not be able to bring a lawsuit against an employer based on this law unless that individual is a current employee who is bringing an action against their employer for advertising a job, promotion, or transfer without posting a minimum and maximum hourly wage or annual salary. This bill would also clarify that the penalty for the first violation of this law would be zero, and employers would have 30 days to correct the violation. This bill would also move the effective date of Local Law 32 of 2022 to November 1, 2022.

 

Impact:

The Committee on Civil & Human Rights (CCHR), which Williams Chairs, has started receiving complaints about employers failing to comply with the transparency law. Williams plans to enact legislation to study the overall pay equity of the city after a few years of the full implementation of the law to see its impact.

Work To Break the Cycle

 2023 Ideas Challenge Entry

Shelby County, TN Mayor Lee Harris’s “Work to Break the Cycle” is a job website featuring updated Shelby County Government positions for individuals with arrest or conviction records. It complements the 2020 Ban the Box Ordinance, which removed questions about criminal history from job applications. This initiative has facilitated numerous opportunities for previously incarcerated individuals to join the county government workforce, with over 100 employment offers extended. By offering tailored jobs, Harris aims to reduce recidivism rates, as employment cuts reoffending chances by 20%. This dedicated job site enhances application confidence, promotes local economic engagement, and reduces incarceration expenses, aligning with the goal of reintegrating justice-impacted individuals into the community.

 

Impact:

Harris believes each hire is a marker of success. Since launching in May 2023, the program has resulted in employment offers to over 100 individuals so far, with plans to partner with the local Chamber of Commerce to provide more job opportunities. These jobs not only change their situation, but it has a ripple impact for their families and the Shelby County Community as a whole.

 

ARP: Partnering with Community Colleges to Prepare Workers for High-Demand Sectors

Problem

According to the Congressional Research Service, in general, persons with lower educational attainment experience relatively higher unemployment rates compared to peers with high levels of educational attainment. This population was also hit hardest during the pandemic with the highest rates of unemployment. Furthermore the report found that  persons identifying as Black or Hispanic and younger workers also experienced relatively high levels of unemployment and relatively steep declines in labor force participation over the course of the pandemic.

Solution

After a tech firm recently chose Phoenix as the location for a new semiconductor factory, Mayor Gallego partnered with community colleges to make it easier for residents to obtain degrees and training that prepare them for jobs at the plant and other high-demand sectors. The Rescue Plan is allowing Phoenix to offer monthly stipends of up to $1,000 to help residents who enroll in courses for high-demand industries, such as technology and health care. The funds can be used to offset costs such as books and child care. And Gallego is particularly focused on ensuring single parents are able to participate.

New Mexico: Albuquerque Mayor Tim Keller Announced the Participants of the 2023 Mayor’s Creative Youth Corps

New Mexico: Albuquerque Mayor Tim Keller announced the participants of the 2023 Mayor’s Creative Youth Corps. This will be the fourth cohort of high school juniors, seniors, and recent graduates participating in a six-week paid summer internship program focused on arts-based leadership. This initiative provides internship and career exploration opportunities for Albuquerque’s youth. Each participant will work closely with mentors to develop their creative skills. “In Albuquerque, we believe in nurturing the creativity and incredible potential of our young people. Our Creative Youth Corps get valuable hands-on experience in our local creative economy, as well as training and skills that will stay with them no matter what their bright futures hold,” said Mayor Keller.

 

Maryland Senator Antonio Hayes Secures Funding for West Baltimore Revitalization Programs

Maryland: Senator Antonio Hayes helped secure funding to invest in and revitalize West Baltimore. The state’s budget will provide over $11 million to the area’s Development Authority, which will strategically invest the new funding to build on recent support provided to local businesses. Around $10 million of the funding package will be used for community grants and $1 million will go toward hiring staff for the authority. Hayes sponsored the original legislation creating the authority as well as legislation to expedite the appropriation process and send out grants to spur economic growth and create jobs.

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