The big picture: Senator Bernie Moreno introduced the 2025 HIRE Act, proposing a 25% excise tax on "outsourcing payments" to foreign persons for services benefiting US consumers, alongside a ban on deducting these payments. The bill aims to fund domestic workforce development programs.

Why it matters: This legislation, if enacted, would significantly increase the cost of international service procurement for US businesses, forcing a reevaluation of global talent strategies and supply chains. Companies providing or receiving services from outside the US must monitor its progress.

Between the lines:

• The HIRE Act would impose a 25% excise tax on payments made by US persons to foreign persons for labor or services that directly or indirectly benefit US consumers.
• These "outsourcing payments" would also be non-deductible for corporate income tax purposes, further increasing the financial burden.
• Funds collected from the new excise tax would establish a Domestic Workforce Fund to support workforce development, apprenticeships, and retraining programs in the US.

Staffing & HR impact: Staffing firms and HR departments would face increased compliance complexities and potential cost pressures if they utilize international contractors or shared service centers. This could drive a strategic shift towards reshoring certain functions or investing more heavily in domestic talent development.

The bottom line: While its passage is uncertain, the HIRE Act signals a growing legislative push to incentivize domestic employment over international outsourcing.