FUTURE of Workers Act
Sponsored By: Senator Schatz, Brian [D-HI]
Introduced
Summary
This bill would create a national Worker Adaptation and Training Program (WATP) to retrain and support workers displaced by automation and artificial intelligence, funded by new AI-service taxes and employer contributions. It combines wage-replacement, job-placement, Medicaid eligibility changes, employer accountability, and dedicated trust-fund financing into a single federal framework.
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- Workers: WATP would cover gig and contractor workers and offer career counseling, retraining, placement, temporary wage replacement phased over up to five years (75% for years 1–3, 50% year 4, 25% year 5), relocation aid capped at $10,000, and monthly support payments tied to state median wages or prior income.
- Families and households: Participants and their dependents could access optional Medicaid under a new WATP pathway, with medical assistance extended for six months after placement and WATP-related income excluded from Medicaid income counting.
- Employers and taxes: The bill creates a new excise tax on qualifying AI services with tiered rates (typically 4%, 6%, 8% with a lower first-year phase-in), a payroll contribution regime, and an Excess Displacement Accountability tax plus C-corporation surtaxes; state and local employers hiring participants face a 25% wage and fringe cost share.
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Bill Overview
Analyzed Economic Effects
5 provisions identified: 1 benefits, 3 costs, 1 mixed.
Higher employer taxes for job cuts
If enacted, the bill would tax employers for eliminated U.S. full-time positions during a saturation period. The tax would generally equal payroll-tax equivalents for baseline pay for each eliminated position for five years; replacing employees with contractors would count as elimination. The bill would also recapture prior accelerated depreciation on automation assets and deny bonus expensing for automation assets placed during a saturation period. For three taxable years after a saturation period, C corporations would pay an extra tax tiered at 2%, 4%, and 6% on taxable income bands.
New national retraining program for workers
If enacted, the bill would create a Worker Adaptation and Training Program run by the Labor Department. The program would offer career counseling, retraining, job placement help, and financial supports. It would be authorized at $60 billion per fiscal year, with up to 5% for administration. Participants could get one-time relocation assistance up to $10,000, monthly New Foundations payments, and phased wage-replacement payments; participation is generally limited to 3 years. Labor could use tax and state wage records to run the program, and disputes over which employer pays could not delay a worker’s benefits. The bill would also create a Worker Adaptation Trust Fund to receive related tax receipts.
Federal response to high unemployment
If enacted, the bill would trigger stepped federal actions when unemployment stays above set thresholds for two consecutive quarters. Above 6% unemployment, agencies would be required to consider job impacts for grants and loans. Above 7.5%, an emergency interagency task force and GAO and CBO reviews would be required. Above 9%, the Federal Reserve would prioritize its maximum-employment mandate. Each response period would end when unemployment stays below the threshold for two quarters.
New employer displacement fees and rules
If enacted, the bill would let Labor charge employers for WATP services provided to workers tied to that employer and require a new quarterly displacement contribution. The contribution would be based on U.S. wages and a displacement ratio, rounded to the nearest 0.1% and capped at 2%. Employers could contest proposed charges and would get quarterly statements. Transfers done mainly to lower rates would be ignored and could trigger a $10,000 penalty per party per quarter. Certain nonprofits and government entities could elect an alternate payment method for at least 8 quarters. These rules would begin for calendar years starting more than one year after enactment.
Tax on AI services providers
If enacted, the bill would impose an annual excise tax on U.S. receipts for qualifying AI services above $50 million. Rates would be tiered at 4%, 6%, and 8% for amounts above $50 million, $500 million, and $5 billion, with reduced 2%, 3%, and 4% rates in the first calendar year. Federal contract receipts and certain reseller payments would be excluded. The bill would also bar deducting this excise tax on corporate returns.
Sponsors & CoSponsors
Sponsor
Schatz, Brian [D-HI]
HI • D
Cosponsors
Sen. Booker, Cory A. [D-NJ]
NJ • D
Sponsored 9/30/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov