Tax breaks for Guard
employers weighed

The Senate measure would
benefit firms that keep pay
steady for deployed soldiers

Citizen soldiers and their employers would benefit from proposed legislation to offset the pay cut that hit some when they were called to active duty in the National Guard or Reserve.

Indiana Sen. Evan Bayh, a Democrat, is proposing a measure to eliminate the so-called "patriot penalty" and offer tax breaks up to $15,000 annually to corporations that supplement the incomes of employees called to service in the Middle East.

About half of all troops in Iraq are in the Guard and Reserves. Based on a Pentagon study, Bayh estimates 40 percent of those troops make less money while deployed. Some 15 percent of 2,200 Hawaii residents who were mobilized last year said the military pay would be a financial hardship, according to a survey by the state Department of Defense.

Some Hawaii employers were cautious about the idea, which is similar to one raised by Gov. Linda Lingle. The governor said last month she will propose state legislation to ensure that any soldier who is a state employee would not lose money while deployed in a combat zone. She encouraged county governments and private businesses to follow suit.

Bill Watkins, chief compliance officer with Clinical Laboratories of Hawaii, said the tax incentive might be a good idea, but "it would not be an influencing factor. We already do support our employees because it is the right thing to do."

The company, which operates in several hospitals and other locations statewide, had eight employees called up. Watkins said "they are treated like active employees" and receive bonuses when they are paid out to employees. "These people are valuable folks and we owe it to them; we can't wait to get them back," he said. The company does not have a system of supplementing military pay if it is less than the employee's salary, he said.

"Conceptually, I think it's a great idea, but I'd have to study the bill to see its financial impact on the service sector," said Albert "Spike" Denis, chief executive officer of Safeguard Service. Six employees of the company, which provides uniformed guards and security consultants, are deployed with the Hawaii National Guard.

The company hires workers from the military services as well as the National Guard, Denis said. "We take good care of our guards. They are professionals. We value their skills learned in the military. We can't wait for these folks to return." The company does not supplement the deployed workers' pay.

Servco Pacific and Big Save supermarkets on Kauai said earlier they are making up the pay differential for deployed employees and continuing health and dental benefits for their families. Executives were unavailable for comment yesterday.