Federal lawmakers are considering a bipartisan bill that would allow grocery and convenience store workers who earn less than $75,000 per year to avoid paying federal income tax on up to $25,000 in wages they receive between Feb. 15 and June 15, 2020. The bill, known as the Giving Retailers and Our Convenience Employees Relief (GROCER) Act, was introduced in the House of Representatives April 21 by Pennsylvania Reps. Glenn Thompson, a Republican, and Dwight Evans, a Democrat.
The legislation would allow the Treasury Department to extend the tax holiday for as long as three additional months if the national emergency President Trump declared in response to the novel coronavirus outbreak continues beyond the initial three-month period. Workers would be able to exclude up to $6,250 in income per month if the tax break is lengthened.
The Food Industry Association (FMI) and the National Grocers Association both reacted positively to the proposed bill. Jennifer Hatcher, FMI's chief public policy officer, said in a statement the legislation "recognizes the efforts the food industry has contributed as critical infrastructure and gives [workers] well-deserved tax relief for their commitment to ensuring that grocery stores are able to remain open and stocked to serve all of us during this national emergency." NGA, meanwhile, supports the lawmakers’ "efforts to recognize front line workers by providing them with tax relief for their time spent working during the COVID-19 pandemic,” Molly Pfaffenroth, the association’s director of government relations, said in a statement released jointly by Thompson and Evans.
The proposed tax holiday could offer an added measure of financial support to grocery workers, who are risking their health in order to work in settings where they must come into contact with other people for an extended period of time. If approved, the move could also help grocers attract or retain workers as the industry scrambles to bring on additional staff to meet crushing demand from shoppers.
Thompson described the proposal as a way to reward grocery workers for their contributions during the coronavirus outbreak. “The GROCER Act is a simple way of saying 'thank you' to the men and women who put themselves on the front lines, sanitizing, stocking, and serving communities by putting a little more of their hard-earned money back in their paychecks,” he said in the statement.
Grocers have taken steps since the start of the outbreak to give a boost to their workers by temporarily raising pay, with some companies announcing extensions to the wage increases as the pandemic wears on. For example, H-E-B announced in an April 2 tweet that it will pay an extra $2 per hour through May 10 to hourly store associates and manufacturing, warehouse and transportation employees. Hy-Vee said yesterday that it is extending the 10% bonus it is paying front-line employees through March 16.
But even with the pay increases, grocery workers remain at the low end of the income spectrum, raising questions about how much many would actually benefit from a short-term income tax exemption. Dean Baker, senior economist at the Center for Economic and Policy Research, told Law360 that tax holidays can wind up providing few benefits to low-wage workers because they often earn too little to have federal tax liability. The median pay for cashiers at retailers like grocery stores in 2019 was $11.37 per hour, or $23,650 per year, according to the U.S. Bureau of Labor Statistics. By comparison, median full-time weekly earnings for workers in the United States were $936 in the fourth quarter of 2019, which would translate to $48,672 per year, the agency reported.