A new bill in the House of Representatives would offer tax breaks to businesses in proportion to wage increases for employees.

Congressman Bill Owens, who said middle class workers have not seen wage increases rise at the same rate as their cost of living, introduced the legislation.

“Middle class workers have seen their wages fall or remain stagnant for too long,” Owens said. “This legislation will help incentivize good paying jobs at small businesses across the country, putting money in the pockets of workers as well as job creators.”

Specifically, Owens legislation would allow small businesses to offer tax-free dividends to their owners up to the amount that gross wages increased in a given taxable year.

The legislation would only apply to wages for employees making up to $50,000 per year, ensuring the credit is tied to wage increases for middle income workers.

For example, if a small business paid $10,000 more to employees in a given year than it had the year before, that business would be eligible to distribute $10,000 in dividends tax free to its owners.

“Small business owners want what’s best for their employees, but raising pay for employees can sometimes take too great a toll on a business owner’s bottom line,” Owens said. “We should reward companies that do right by their employees, and that’s what this legislation aims at doing.”

For partnerships and similarly structured companies, a tax-free distribution is allowable under the bill.