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Lawmakers pitch four-day work week tax credit

Rep. David Madsen, D-Steelton, is pictured during a recent Policy Subcommittee on Energy, Labor, and Development meeting in Pittsburgh.

Three Pennsylvania House Democrats want to create a state tax credit for companies that choose to adopt a four-day work week.

House Reps. Dave Madsen, Chris Pielli and Joshua Siegel are circulating a sponsorship memorandum for the measure, which cites the recent results of a program in Great Britain that found 71% of workers who worked a four-day work week reported feeling less burned out. Among those workers, 39% reported feeling less stressed and 48% said they were more satisfied with their job than before the trial. Of the workers, 60% said it was easier to balance work and responsibilities at home, while 73% reported increased satisfaction with their lives. Fatigue was down, people were sleeping more and mental health improved, the findings show.

“Over 100 years ago, union members and labor activists fought for a five-day, 40-hour workweek in the United States. Over the lastcentury, the labor market and average workday has changed drastically, especially since the COVID-19 pandemic. Recently,companies and governments across the globe have run pilot programs testing a shorter workweek with promising results,” the lawmakers said in their memorandum.

Madsen, PIelli and Siegel propose a tax credit through the state Department of Labor and Industry to incentivize companies to change their standard work week. Companies would have to comply with state requirements to qualify for the tax credits, but the qualifications haven’t yet been written. According to the Associated Press, revenue grew 1.4% over the course of the trial for 23 companies that provided adequate data — weighted for the size of the business — while a separate 24 companies saw revenue climb more than 34% from the same six-month period a year earlier. For all those who participated in the trial, there was a drop in the likelihood of employees quitting, down 57% compared with the same period a year earlier, as well as those calling out sick, down 65% from a year ago, according to the findings. Of the companies, 92% reported they would continue with the four-day workweek, with 30% saying it’s a permanent change.

“We need to do more to provide options for workers and their employers,” Madsen, Pielli and Siegel wrote. “Studies have shown that a four-day workweek reduce semployee stress, burnout, and fatigue. In addition, it positively impacts an employee’s mental health, work-life balance, andphysical wellbeing, all without negatively impacting a business’ productivity and revenue. Moreover, a four-day work week wouldprovide workers with flexibility, allowing them to be more present parents and more active community members.”

There are some issues with the four-day work week that can cause problems. Less than 4 in 10 (37%) of the employees surveyed by Qualtrics for a July 2022 Asociated Press story would be willing to take a 5% or more pay cut for a four-day workweek . But nearly three-quarters (72%) of those surveyed said a four-day workweek would mean they would have to work longer days. However, 10-hour days often aren’t child care friendly. And if a company offers to pay for only four days of eight hours each, it could indicate a shorter workweek might be the result of a company trying to reduce expenses.

A bill was introduced in the New York Assembly for companies with more than 500 employees, but it has yet to move out of committee. State legislation has also been introduced in California and Maryland. At the federal level, Rep. Mark Takano, D-Calif., has sponsored legislation reducing the standard workweek from 40 hours to 32 hours by lowering the maximum hours threshold for overtime compensation for non-exempt employees under the Fair Labor Standards Act.

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