| | Statement of Donna Klein, President and Chief Executive Officer, Corporate Voices for Working Families Testimony Before the Subcommittee on Oversight
of the House Committee on Ways and Means February 13, 2007 CORPORATE VOICES FOR WORKING FAMILIES
Congressman Lewis and Members of the Committee, thank you for
the invitation to appear before you today. We welcome this hearing, your
leadership, Mr. Chairman, and the work this subcommittee does in raising the awareness
of the Earned Income Tax Credit (EITC) to ensure that low-wage families and
workers know how, where, and when to access benefits they have earned.
I am Donna Klein, President/CEO of Corporate Voices for
Working Families. Prior to founding Corporate Voices I spent 20 years as Vice
President of Workforce Effectiveness at Marriott, and have seen first hand how
businesses are taking responsibility for helping employees access and receive
their maximum earnings.
Corporate Voices for Working Families is the leading national
business membership organization representing the private
sector voice in the dialogue on public policy issues related to
working families. As an independent 501(c) 3, Corporate Voices
facilitates research and provides solutions to legislators and business on
Early Childhood Education and After School Care, Family Economic Stability,
Worker Flexibility, the future of the Mature Workforce, and Youth
Transitions. Collectively our 53 partner companies employ more than 4
million individuals throughout all fifty states, with annual net revenues of over
$1 trillion.
On February 1st, Earned Income Tax Credit Awareness
Day, Corporate Voices released its 2007 Employer Guide: Educate Your
Employees About the Benefits They’ve Earned. This is the fourth year that
Corporate Voices has taken business input to develop and release the Employer
Guide to organizations interested in helping their low-wage employees access
the federal benefits, such as tax credits and assistance with health care,
food, and home heating costs.
Employees earn these benefits every day they work, but too
many do not know how to navigate the maze of programs and paperwork in order to
access them. Much of the formal information about EITC is readily available
through the internet, but many of the workers eligible for EITC do not have easy
access to a computer. Business plays a critical role in spreading the word
about these important benefits. Each year we revise the Employer Guide and
release it at the beginning of the year to coincide with employers’ distribution
of w-2’s. We use this window of opportunity to educate employers not only on
EITC but also on the full array of benefits for which their employees may be
eligible.
We make the Employer Guide available in English and Spanish
and it includes the following items:
- Information on the Earned Income Tax
Credit (EITC), Advance EITC, the Child Tax Credit, Medicaid/State Children’s
Health Insurance Program (SCHIP), Food Stamps, Low Income Home Energy
Assistance Program (LIHEAP) and Volunteer Income Tax Assistance (VITA) centers;
- Tips on how Companies can talk to
employees about tax credits and federal benefits;
- Step-by-step instructions on how to
enroll employees in Advanced EITC;
- Guidelines to help employees avoid
predatory tax-preparation practices;
- Corporate Best Practices on how to
best use the Employer Guide to help employees access these programs;
- A
Calendar of important
dates to remember when filing for these benefits;
- Facts on the “Stored Value Card,” often
referred to as the pre-paid debit card;
- Paycheck stuffers; and
- Flyers about SCHIP.
The Employer Guide is distributed to and utilized by our 53
member companies and 65 Strategic Partners, who include major community based
organizations and national business coalitions. Some of our member companies
use all elements of the kit, while others pick and choose elements that can be
best incorporated into their company’s specific outreach campaign. Our member companies
and partners utilize the internet, corporate intranets, internal educational
seminars, paycheck stuffers, copy and lunch room posters, and community
partners to disseminate this information and educate their employees about the
benefits of EITC. We estimate that through our business members and strategic
partners’ distribution channels alone, the Employer Guide potentially touches
10 million low-wage workers.
A quarter (13 of 53) of our member companies have large
lower-wage employee populations and we asked them to help us quantify the
impact of our 2006 EITC outreach. This is what we learned:
- Eight of the 13 companies
employing low-wage workers used the Employer Guide Toolkit to develop and execute
a strategic EITC outreach plan. These companies are: Bright Horizons,
CVS/pharmacy, HEB Grocery, Marriott International, Mellon Financial, PNC
Financial, Sodexho and Save-a-Lot.
- Most of them (6
of 8) have Advance EITC programs.
- Over a third (3
of 8) provides free tax preparation, and two others actively refer employees to
IRS Volunteer Income Tax Assistance (VITA)
sites and other programs.
- Two companies systematically
train their supervisory staff on eligibility, although others (3 of 8) either
use internal communications channels (intranets, etc.) or outside recruiting and
training agencies to counsel employees on EITC.
- In
addition, two of our partner companies, HEB Grocery and Sodexho, made the
Employer Guide Toolkit directly available to their employees, while Marriott went
a step further to rebrand the toolkit as a Marriott product before distributing
it.
We expect our 2007 Employer
Guide to be even better received and utilitized by businesses nationwide.
Already we’ve learned that Nordstroms and Hyatt plan to rebrand and
redistribute the Employer Guide this tax season. Hyatt’s distribution will
reach all of their 112 domestic properties – totaling some 40,000 low-wage
employees. We are anticipating this increase in interest and distribution in
part due to the renaming the Toolkit. Previously it was labeled, “Employers
Guide to Public Benefits” – based on secondary research we realized that by
changing the name to “Employer’s Guide to Benefits They Have Earned,” we reduce
the negative label associated with public benefits.
In addition to the individual
companies, we rely on our network of Strategic Outreach Partners, including
Society for Human Resource Managers (SHRM) National Retail Federation, and
National Association of Retail Manufacturers, to redistribute the Toolkit to
their networks. In order to access the impact of this redistribution strategy,
we polled 12 of our 65 strategic partners and found that their Toolkit outreach
will reach over 1.7 million employees. We estimate that our full roster of
Strategic Outreach Partners reach more than 3 million employers.
These numbers show that there is a serious commitment on the
part of the business community to ensure that all eligible families access EITC
benefits. Each year, Corporate Voices has successfully expanded the
distribution channels of the Employers Guide. We are committed to doing more
because our businesses tell us that the Employer Guide gives them the tools and
detailed instruction they need to talk with workers year-round to increase
awareness among employees that they are eligible and should apply for these
programs to supplement their income. Health insurance for their children or
assistance with buying food or paying the heating bill is a big step forward
for a family working to make ends meet. When workers get the information
through their company, it helps build trust and loyalty to an employer who
cares about them and their families.
Any business small, medium or large can access and use The
Employer Guide; it is easily downloaded for the Corporate Voices website:
www.cvworkingfamilies.org. Our
website also links to state and local websites so that it is easier for people
to get state specific information and simplify the process of gathering
information that is helpful.
In the few minutes remaining I would like to focus on two
points.
First, Corporate Voices and our partner corporations can be a
resource to this Committee as it crafts policy solutions expanding the outreach
of EITC and Advanced EITC to eligible workers. We all want to reach the
remaining 20 percent of the low-wage worker population that is still not
benefiting from EITC, but we need to work together to accomplish this task. Our
businesses have proven that they are committed to assisting this population of
workers and their families move toward ECONOMIC STABILITY, and if we continue
to provide the right resources and tools, businesses will continue to educate
their workforce. Second, in an effort to reach small businesses, which employ
75 percent of low-wage earners, we ask this committee to encourage the Small
Business Administration (SBA) to meet with us and develop an EITC outreach
distribution strategy for small businesses across the country. Corporate Voices
would be pleased to offer our Employer Guide as a starting point for
collaboration with SBA and we’d be happy to work with them to best meet the
needs of this business community. Finally, recognizing the benefit of the IRS 1-800-tax-1040
hotline, we encourage the creation of a separate hotline that is designed to
deal directly with low-wage workers tax issues. It would need to be easy to
navigate and business could encourage their employees to call the number at
anytime.
Finally we know that
by 2012, 7.5 million new jobs will be created in the American economy; 6 million
of those jobs will be low-wage. Corporate Voices believes that family economic
stability for all of America’s families is crucial to our country’s economic growth.
Corporate Voices is committed to private sector and public policy initiatives
that increase opportunities for lower-wage workers and assist companies in
their increasing role in providing workforce supports. As our coalition
companies increase their role in supporting working families, they believe financial
literacy and health–related knowledge will be critical to helping families
secure a more stable economic future. Corporate Voices will continue to
produce original research and business best practices that instruct employers
on how to assist working families in building assets, increasing opportunities,
and accessing federal and company benefits more effectively.
The Employer Guide, which is funded by the Annie E. Casey,
Ford, and Hitachi Foundations, has room to expand and we look forward to
working with this Committee to ensure that all companies have an opportunity to
help their employees receive the money they’ve EARNED at the end of the day. Thank
you, Mr. Chairman
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