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Home - The Management Association
Member Resources
Hiring Incentives
by Sally Weldin, Senior HR Specialist
Published March 11, 2010
Question: Are there any hiring incentives for employers?
Answer: At the end of February 2010, the Senate passed H.R. 2847, the Hiring Incentives to Restore Employment Act, also referred to as HIRE. The bill would create an incentive for hiring by giving employers a limited tax “holiday” on the employer share of the social security tax on wages of a newly hired employee. The bill’s aim is to free up funds for employers to hire more employees from the unemployed ranks, thereby stimulating the economy with job growth.
The employer’s portion of the social security tax is 6.2% of wages paid to a “qualified individual”. The proposed tax relief would be on wages paid for employment beginning on the day after the bill is enacted and ending before the first day of 2011. Employers will still be required to deduct/deposit the employee portion of the tax, as well as withhold Medicare tax.
To qualify for the tax relief, “qualified individuals” must have been unemployed for 60 days, begin employment after February 3, 2010 and before January 1, 2011, and not be related to the employer or to anyone owning 50% or more of employer stock or other capital.
Under the proposed bill, a qualified employer would not be eligible for the social security tax "holiday", as well as receive the Work Opportunity Tax Credit (WOTC) for a qualified individual. In other words, there is no double-dipping.
The bill also creates a business tax credit against income taxes based on retaining the employee for a certain length of time.
The bill has yet to pass the House of Representatives.
