HR2692-119

What This Bill Does

The No Tax Breaks for Union Busting Act treats employer anti-union spending more like nondeductible political influence spending. It amends Internal Revenue Code section 162 to deny deductions for attempts to influence employees with respect to labor organizations or labor organization activities, including labor organization elections, labor disputes, collective actions, National Labor Relations Act rights, and Railway Labor Act rights. Covered amounts include spending tied to NLRB unfair-labor-practice complaints or settlements, federal court findings of interference under the Railway Labor Act, captive-audience style meetings or trainings where union activity is discussed with bargaining-unit employees, and amounts reportable under the Labor-Management Reporting and Disclosure Act. The bill excludes direct negotiations with selected representatives, required shareholder communications, voluntary recognition consultations, labor-management partnership work, grievance procedures, spending by unions, legally required employee notices, and complaints later set aside. Treasury must issue regulations within 240 days. Employers that fail to provide required information face penalties of the greater of $10,000 or $1,000 times full-time equivalent employees, with added penalties after 90 days capped at $100,000, and consultants conducting covered activities must file information returns.

Who Benefits and How

Workers considering union representation benefit because employers lose a federal tax subsidy for spending that influences organizing or collective bargaining choices. Labor organizations benefit because union-avoidance spending becomes less tax-favored and more transparent. National Labor Relations Board enforcement staff benefit indirectly because tax reporting can surface spending tied to unfair labor practice complaints or settlements. Treasury tax compliance staff benefit from new reporting categories and penalties for employer labor-influence spending.

Who Bears the Burden and How

Employers conducting union-avoidance campaigns bear higher after-tax costs because covered spending is no longer deductible. Union avoidance consultants must file information returns identifying clients, dates, activity categories, and amounts paid or incurred. Large employers face larger reporting penalties because the base penalty can be $1,000 times the number of full-time equivalent employees. The Internal Revenue Service must issue guidance, receive disclosures, enforce penalties, and administer exceptions.

Key Provisions

• Bars business deductions for attempts to influence employees about labor organizations or labor organization activities.
• Defines covered spending to include certain unfair-labor-practice matters, captive-audience meetings, trainings, and LMRDA-reportable amounts.
• Requires Treasury guidance or regulations within 240 days after enactment.
• Creates employer penalties and consultant information-return requirements for covered labor-influence spending.