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House Committee Approves Paulsen Bill to Empower Startup Employees

09/14/16
Washington, D.C. – The House Committee on Ways and Means voted to pass Congressman Erik Paulsen’s (MN-03) Empowering Employees through Stock Ownership Act to promote employee ownership at startup companies and encourage innovation. The Empowering Employees through Stock Ownership Act (H.R. 5719) helps employees keep their ownership interests and utilize all options offered to them when taking a new and exciting job at a startup.
 
“This bipartisan legislation will accomplish two simple – but very important – goals: Keep America on the forefront of innovation and promote employee ownership at startup small businesses,” said Congressman Erik Paulsen. “Helping startups attract talent is an essential component of encouraging innovation and entrepreneurship, as well as inventing the next big idea or developing a life-changing technology.”
 
Click on the video below for Congressman Paulsen’s remarks on the bill at the Ways and Means Committee markup:
 
 
At many startup companies, employees are offered stock options or equity interest as part of their compensation. Currently, if employees exercise these options, they are required to immediately pay taxes often times before they may have the available cash to do so. As a result, these rank-and-file employees cannot afford to exercise their stock options and therefore miss out on a significant financial opportunity. This is a deterrent to many that wish to join a startup company. The Empowering Employees through Stock Ownership Act will help startup companies attract and keep top talent by allowing employees to defer the taxes on their stock options until they are likely to have the funds necessary to make their tax payment.
 
For complete text of the bill, click here. Identical legislation was also introduced in the U.S. Senate by Senators Mark Warner (D-VA) and Dean Heller (R-NV).
 
Congressman Paulsen, a champion of small business and advocate of free enterprise, entrepreneurship, and innovation, serves on the House Ways and Means Committee, the bicameral Joint Economic Committee, and is co-chair of the Congressional Medical Technology Caucus.
 
For more information on Congressman Paulsen’s work in Congress visit paulsen.house.gov. 
 
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