Bill to Curb Outsourcing Introduced

Sen. Bernie Moreno (R-OH) has introduced the Halting International Relocation of Employment (HIRE) Act of 2025, a proposal aimed at discouraging U.S. companies from outsourcing jobs overseas. 

Why it matters: The legislation is significant as it signals a further shift in the traditional alliance between Republican lawmakers and the business community. By framing outsourcing as a target for taxation and penalties, the bill reflects rising populist pressures and a new willingness to scrutinize corporate practices that once enjoyed greater deference. 

Key provisions: 

• 25% Excise Tax. Imposed on payments to overseas employees for services benefiting U.S. consumers. 

• No Tax Deduction. Payments subject to the tax would not be deductible. 

• Domestic Workforce Fund. New revenue would support DOL-run apprenticeship, reskilling, and workforce development programs, with grants targeted to states most affected by outsourcing. 

• Expanded Definition of “Outsourcing Payments”. Covers fees, premiums, royalties, or service charges paid to foreign entities. 

• Severe Penalties for Non-Compliance. Increases from 0.5% to 50% per month, with no 25% cap; excise tax may not be deducted as a business expense. Read the full bill text here. 

Implications for CHROs: 

• Increased Costs of Outsourcing. Companies relying on foreign workers, particularly in India and other major markets, could face higher costs. 

• Operational Complexity. Firms serving both U.S. and international clients must calculate taxes only on the portion tied to U.S. consumers—adding compliance and reporting burdens. 

• Workforce Strategy Shift. The Act could accelerate investment in domestic talent pipelines, particularly through apprenticeships and reskilling initiatives funded by the new Workforce Fund—a priority of President Trump. 

The bottom line: While the bill has been formally introduced, it faces a steep uphill climb. With only a slim Republican majority in both chambers, bipartisan support will be required for the bill to pass. At this stage, it’s not clear which lawmakers will back the proposal. 

Democrats, who have historically supported access to global talent, may find themselves in a difficult position: choosing between endorsing domestic workforce development or appearing to side with outsourcing. 

• The situation is further complicated by the World Trade Organization’s long-standing moratorium on imposing duties on cross-border digital services. This moratorium, in place for decades, is set to expire in March 2026, when it will be reviewed and is likely to be extended.

Taken together, these dynamics suggest the bill is unlikely to advance in its current form. For now, it should be viewed as a messaging measure—a signal of legislative priorities rather than an imminent policy shift.