text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Economic Mobility for Productive 
  Livelihoods and Expanding Opportunity Act of 2016'' or the ``EMPLEO 
  Act''.
  
  SEC. 2. FEDERAL MINIMUM WAGE REQUIREMENT FOR ELIGIBLE PUERTO RICO 
                EMPLOYEES.
  
      Section 6(a) of the Fair Labor Standards Act of 1938 (29 U.S.C. 
  206(a)) is amended--
              (1) by redesignating paragraphs (2) through (4) as 
          paragraphs (3) through (5), respectively; and
              (2) by inserting after paragraph (1) the following:
              ``(2) if such employee is an eligible Puerto Rico employee, 
          as defined in section 6433(c) of the Internal Revenue Code of 
          1986, who receives a qualified wage subsidy payment under 
          section 6433 of such Code from a participating employer, $5.00 
          an hour (as determined without regard to the qualified wage 
          subsidy payment);''.
  
  SEC. 3. WAGE SUBSIDY FOR PUERTO RICO WORKERS.
  
      (a) In General.--Subchapter B of chapter 65 of the Internal Revenue 
  Code of 1986 is amended by adding at the end the following new section:
  
  ``SEC. 6433. WAGE SUBSIDY FOR PUERTO RICO WORKERS.
  
      ``(a) In General.--In the case of a participating employer which 
  makes qualified wage subsidy payments to eligible Puerto Rico 
  employees, such participating employer shall be treated for purposes of 
  this title as having paid to the Secretary, on the date any such 
  qualified wage subsidy payment is paid, payroll taxes in an amount 
  equal to such wage subsidy payment.
      ``(b) Participating Employer.--
              ``(1) In general.--For purposes of this section, the term 
          `participating employer' means an employer which--
                      ``(A) elects the application of this section,
                      ``(B) makes qualified wage subsidy payments to all 
                  eligible Puerto Rico employees of such employer,
                      ``(C) provides to each eligible Puerto Rico 
                  employee (in such form and manner as the Secretary 
                  shall by regulations prescribe) information about the 
                  amount of qualified wage subsidy payments paid to such 
                  employee at the time such payments are made, and
                      ``(D) in the case of an employer which elects to 
                  receive an advance payment under subsection (g), 
                  provides to the Secretary the information described in 
                  paragraph (2) not later than 30 days before the 
                  beginning of the applicable period.
              ``(2) Information required.--The information required under 
          this paragraph is the following:
                      ``(A) An estimate of the number of workers who will 
                  be employed by the participating employer for the 
                  applicable period.
                      ``(B) An estimate of the payroll taxes (determined 
                  without regard to any increase in tax under section 
                  3111 by reason of subsection (g)(2)) that will be paid 
                  by the participating employer with respect to all 
                  employees for such applicable period.
                      ``(C) An estimate of the number of eligible Puerto 
                  Rico employees who will be employed by the 
                  participating employer for such applicable period and 
                  the hourly rate of pay for each such employee 
                  (determined without regard to any qualified wage 
                  subsidy payment).
                      ``(D) An estimate of the aggregate amount of 
                  qualified wage subsidy payments that will be paid by 
                  such employer to eligible Puerto Rico employees for 
                  such applicable period.
              ``(3) Failure to make subsidy payments.--For purposes of 
          this title (including penalties), the failure by any employer 
          which makes an election under paragraph (1)(A) to make any 
          qualified wage subsidy payment at the time provided therefor 
          shall be treated as the failure at such time to deduct and 
          withhold under section 3102 an amount equal to the amount of 
          such qualified wage subsidy payment.
      ``(c) Eligible Puerto Rico Employee.--For purposes of this section, 
  the term `eligible Puerto Rico employee' means, with respect to any 
  calendar year, any individual who--
              ``(1) is a citizen of the United States,
              ``(2) has a social security number issued to the individual 
          by the Social Security Administration, and
              ``(3) certifies, in such form and manner as provided by the 
          Secretary, to the employer that such individual is a resident 
          of Puerto Rico and intends to remain a resident of Puerto Rico 
          for not less than the next 6 months.
      ``(d) Qualified Wage Subsidy Payment.--For purposes of this 
  section--
              ``(1) In general.--The term `qualified wage subsidy 
          payment' means, with respect to any eligible Puerto Rico 
          employee for any period, a payment equal to 50 percent of the 
          excess (if any) of--
                      ``(A) the median hourly wage for Puerto Rico, over
                      ``(B) the hourly wage paid to the eligible Puerto 
                  Rico employee.
              ``(2) Median hourly wage for puerto rico.--For purposes of 
          paragraph (1)(A), the median hourly wage for Puerto Rico is--
                      ``(A) $10 for calendar years 2017 and 2018, and
                      ``(B) for any calendar year beginning after 2018, 
                  the amount determined by the Bureau of Labor Statistics 
                  based on the most recent data available as of 30 days 
                  before the start of such calendar year.
              ``(3) Determination of hourly wage.--For purposes of 
          paragraph (1)(B)--
                      ``(A) In general.--The hourly wage of any employee 
                  shall be determined without regard to any qualified 
                  wage subsidy payment under this section.
                      ``(B) Period.--Each hour at which an eligible 
                  Puerto Rico employee performs services for a different 
                  rate of pay shall be treated as a separate period.
                      ``(C) Salaried employees.--In the case of a 
                  salaried employee, the hourly wage for such employee 
                  for any period shall be determined by dividing the 
                  annual rate of pay for such period by 2,080.
      ``(e) Payroll Taxes.--For purposes of this section, the term 
  `payroll taxes' means--
              ``(1) amounts required to be deducted for the payroll 
          period under section 3102 (relating to FICA employee taxes), 
          and
              ``(2) amounts of the taxes imposed for the payroll period 
          under section 3111 (relating to FICA employer taxes).
      ``(f) Other Definitions and Special Rules.--For purposes of this 
  section--
              ``(1) Applicable period.--For purposes of this section, the 
          term `applicable period' means--
                      ``(A) except as provided in subparagraph (B), a 
                  calendar quarter, and
                      ``(B) in the case of any employer which files 
                  returns for payroll taxes less frequently than 
                  quarterly, such period as determined by the Secretary 
                  under regulations.
              ``(2) Wage subsidy payments in excess of payroll tax 
          liability.--To the extent that the amount treated as paid under 
          subsection (a) exceeds the amount of such person's liability 
          for payroll taxes, the Secretary shall credit and refund such 
          excess in the same manner as if it were an overpayment of such 
          taxes.
      ``(g) Advanced Payments for Certain Participating Employers.--
              ``(1) In general.--In the case of a participating employer 
          which elects the application of this subsection, the Secretary 
          shall pay to such participating employer, not later than the 
          first day of the applicable period, an amount equal to the 
          excess of--
                      ``(A) the aggregate amount of qualified wage 
                  subsidy payments for such applicable period (as 
                  determined based on estimates submitted under 
                  subsection (b)(2)), exceeds
                      ``(B) the aggregate amount of payroll taxes 
                  (determined without regard to any increase in tax under 
                  section 3111 by reason of paragraph (2) and based on 
                  estimates submitted under subsection (b)(2)) for such 
                  applicable period.
              ``(2) Treatment of payments.--For purposes of this title, 
          the amount of taxes imposed under section 3111 on any 
          participating employer for any calendar quarter shall be 
          increased by an amount equal to any payment made under 
          paragraph (1) with respect to such calendar quarter.''.
      (b) Social Security Trust Funds Held Harmless.--In determining the 
  amount of any amount transferred or appropriated to any fund under the 
  Social Security Act, section 6433 of the Internal Revenue Code of 1986 
  shall not be taken into account.
      (c) Conforming Amendments.--
              (1) Section 1324(b)(2) of title 31, United States Code, is 
          amended by striking ``or 6431'' and inserting ``6431, or 
          6433''.
              (2) The table of sections for subchapter B of chapter 65 of 
          the Internal Revenue Code of 1986 is amended by adding at the 
          end the following new item:
  
  ``Sec. 6433. Wage subsidy for Puerto Rico workers.''.
      (d) Other Provisions.--
              (1) Reporting of wage subsidy information.--Section 6051(a) 
          of the Internal Revenue Code of 1986 is amended by striking 
          ``and'' at the end of paragraph (13), by striking the period at 
          the end of paragraph (14) and inserting ``, and'', and by 
          inserting after paragraph (14) the following new paragraph:
              ``(15) in the case of an eligible Puerto Rico employee (as 
          defined in section 6433), the amount of any qualified wage 
          subsidy payment paid to such employee.''.
              (2) Penalty for failure to provide information to 
          employees.--Section 6652 of such Code is amended by adding at 
          the end the following new subsection:
      ``(o) Failure To Report Wage Subsidy Information to Employees.--In 
  the case of a failure to provide the information required under section 
  6433(b)(1)(C) at the time required for providing such information, 
  there shall be paid (upon notice and demand by the Secretary and in the 
  same manner as tax) by the person failing to provide such information, 
  an amount equal to $50 for each such failure. In the case of any 
  failure due to negligence or intentional disregard, the preceding 
  sentence shall be applied by substituting `$100' for `$50'.''.
      (e) Effective Date.--The amendments made by this section shall 
  apply to wages paid after December 31, 2016.
target: Economic Mobility for Productive Livelihoods and Expanding Opportunity Act of 2016 or the EMPLEO Act This bill amends the Fair Labor Standards Act of 1938 to require every employer to pay to each of his or her eligible Puerto Rican employees who in any workweek are engaged in commerce and who receive qualified wage subsidy payments minimum wages of $5.00 an hour, determined without regard to those wage subsidy payments.  The bill amends the Internal Revenue Code to treat certain employers who make qualified wage subsidy payments to eligible Puerto Rico employees as having paid payroll taxes in an amount equal to the wage subsidy payment.  An &ldquo;eligible Puerto Rico employee&rdquo; is any individual who: (1) is a U.S. citizen, (2) has a Social Security number, and (3) certifies to the employer that he or she is a resident of Puerto Rico and intends to remain a resident for at least the next six months.   A &ldquo;qualified wage subsidy payment&rdquo; is a payment equal to 50% of the excess (if any) of: (1) the median hourly wage for Puerto Rico ($10 for 2017 and 2018), over (2) the hourly wage paid to the eligible Puerto Rico employee.  The bill sets forth reporting requirements for participating employers and requirements for determining the median hourly wage for Puerto Rico after 2018.
feat_title: EMPLEO Act