Watson Coleman reintroduces bill to encourage employee profit-sharing

U.S. Rep. Bonnie Watson Coleman has reintroduced legislation that would reward large companies that share a greater portion of their profits with employees and penalize those that do not.

The Employee Profit-Sharing Encouragement Act of 2025 would require companies earning more than $25 million annually to establish a profit-sharing plan providing at least 5 percent of net income as a cash benefit to full- and part-time employees who have worked at the company for at least one year. Companies that do not comply would be barred from deducting executive compensation expenses on their federal taxes.

“We have massive companies boosting salaries for their executives while ignoring the majority of their workers,” Watson Coleman said in a statement. “For all the breaks they get, these companies can and should be investing in their workers — and since so many are unwilling to do so on their own, it’s time for Congress to step in for the people.”

The New Jersey Democrat said roughly 51 percent of American workers — about 65.4 million people — are employed by companies with revenues above $25 million and could benefit from profit-sharing. The bill exempts 99.7 percent of U.S. companies to avoid placing new requirements on small businesses.

Watson Coleman criticized existing corporate tax rules that she said are filled with loopholes and incentives benefiting large companies. She argued that tying tax benefits to employee compensation would help address wage stagnation and shift more profits toward workers.

The full text of the bill is available online.