What is the HIRE Act proposed by the US government?

The HIRE Act proposes a 25% tax on payments made by US companies to foreign workers for services that benefit American consumers, with the goal of encouraging job creation within the United States.

How will the HIRE Act affect Indian IT companies?

If enacted, the HIRE Act will make outsourcing more expensive for US businesses, directly impacting Indian IT service providers, business process outsourcing firms, contractors, and even captive centers that rely heavily on the US market.

Can US companies completely stop outsourcing under the HIRE Act?

Analysts believe that completely stopping outsourcing will be difficult, as the scale of talent available in India and other countries cannot be easily matched by the US workforce. US firms may find it challenging to manage large-scale operations solely with domestic workers.

Home / Business and Economy / US Proposes 25% Tax on Outsourcing to Curb Offshoring

US Proposes 25% Tax on Outsourcing to Curb Offshoring

8 Sep

•

Summary

New HIRE Act aims to discourage US companies from outsourcing jobs
25% tax on payments to foreign workers for services benefiting US consumers
Revenue to fund domestic workforce training and apprenticeships

US Proposes 25% Tax on Outsourcing to Curb Offshoring

In September 2025, the United States government has put forward a new legislation called the Halting International Relocation of Employment (HIRE) Act. The bill, introduced by Ohio Senator Bernie Moreno, seeks to curb the practice of outsourcing by US companies.

If passed, the HIRE Act will impose a 25% excise tax on payments made by American businesses to foreign workers for services that ultimately benefit US consumers. The proposal also aims to ban tax deductions for such outsourcing payments, with the collected revenue directed into a "Domestic Workforce Fund" to support apprenticeships and worker retraining programs within the country.

The goal of the HIRE Act is to encourage job creation and retention within the United States by making it more costly for companies to send work abroad. Analysts, however, caution that completely stopping outsourcing may be difficult, as the scale of talent available in countries like India cannot be easily matched by the domestic US workforce.

The HIRE Act must now go through the House of Representatives and the Senate before potentially being signed into law by the President. Senator Moreno has stated that he plans to bring the bill to the floor for a vote next week, setting the stage for a debate on the future of American jobs and the role of outsourcing in the global economy.

Disclaimer: This story has been auto-aggregated and auto-summarised by a computer program. This story has not been edited or created by the Feedzop team.