Tax credit requested for employers of apprentices

Nebraska employers could apply for an income tax credit on wages paid to apprentices under a bill heard by the Revenue Committee Feb. 1.

LB174, introduced by Lincoln Sen. Adam Morfeld, would provide nonrefundable income tax credits to employers for wages paid to apprentices as part of a qualified apprenticeship training program. The credit would be equal to one dollar for each hour an apprentice worked during the year and would be capped at the lesser of $2,000 or 50 percent of the apprentice’s wages.

Morfeld said the bill would help Nebraska attract businesses in manufacturing, construction, information technology and health care that offer living-wage jobs.

“Offering incentives for businesses who provide high-paying apprenticeships is a great way to ensure that Nebraska is work-ready,” he said. “Apprentice training programs ensure a properly trained workforce, which leads to better work outcomes, higher wages and a portable career.”

A qualified apprenticeship training program would be certified by the U.S. Department of Labor and would consist of at least 1,200 hours of on-the-job training. The total amount of credits would be limited to $2.5 million per year.

Steven Mulcahy, speaking on behalf of the North Central States Regional Council of Carpenters, testified in support of the bill. Many local contractors face a lack of skilled workers, he said. At the same time, they are hesitant to hire inexperienced workers who have just graduated from high school or are starting a new career after their jobs were outsourced or replaced by new technologies, Mulcahy said.

“LB174 would give contractors an incentive to take the risk in investing in these unskilled workers to give them a start at a new career,” he said.

Josh Goldsberry, a construction apprentice, also testified in support of the bill, saying apprenticeship training has put him on a pathway to a career. He said his program taught him soft skills, such as leadership and managing generational differences, as well as technical skills, such as using software to read digital blueprints.

“The construction didn’t change, but the tools we use did,” Goldsberry said. “Apprenticeship training gave me the knowledge to use those tools.”

Sue Martin, president of the Nebraska State AFL-CIO, also spoke in support of the bill. She said apprenticeship programs help employers develop a skilled workforce, reduce turnover and recruitment costs and increase productivity while providing workers with stable careers and good wages.

“By developing a state-based tax credit for apprenticeship program sponsors,” Martin said, “the benefit would reduce an employer’s investment in apprentice training costs, taking the burden off them and allowing for more employers to use apprenticeship programs.”

No one testified in opposition to the bill and the committee took no immediate action on it.