Hidden in Obama’s stimulus package: Tax breaks for hiring certain groups
March 16, 2009 by Sam NarisiPosted in: In This Week's E-Newsletter, Latest News & Views, Law
Deep inside the 1,079-page stimulus bill signed into law by President Obama last month is a provision that could impact companies’ hiring plans.
The law contains a tax break for companies that hire employees from certain disadvantaged groups.
As part of the Work Opportunity Tax Credit, employers can claim a 40% credit on the first $6,000 of wages paid to:
- unemployed veterans (employees discharged from military service within the past five years who’ve collected at least four weeks of unemployment benefits in the previous 12 months), and
- “disconnected youths” (individuals from the ages of 16 to 25 who haven’t been employed or attended school regularly in the past six months).
Employers should make a report of employees who fall into those categories, so the right credit can be claimed.
Would you target candidates in those groups to get a tax credit?
Tags: Obama, stimulus package, tax, Work Opportunity Tax Credit
March 20th, 2009 at 12:16 pm
Wouldn’t this be discriminatory? Campanies should hire based on the applicant’s ability, reliability & skillset (right for the job). Every company has its ‘pet project’ employee. Sometimes it works out and sometimes not. We don’t need legislation to encourage employers to hire disadvantaged groups. Either they are willing to take the chance or they aren’t.
The perk sounds nice, but ultimately comes out of our taxes. This legislation just creates more government jobs & a greater tax burden.
March 20th, 2009 at 3:53 pm
I don’t anticipate our company “targeting” any certain group of candidates based on anything other than their skills and bilities to do the job. The idea that we can be bought is insulting.
March 23rd, 2009 at 7:30 am
I don’t see this impacting anyone’s “hiring plan” unless that plan was to purposely hire people in that age group (16-25) which would be age discrimination. As for veterans, many companies already have a veteran preference when hiring. As far as I know, that doesn’t violate any employment laws.
I don’t know about other companies, but I don’t think I would hire someone under 18 that hasn’t either been in school or working for 6 months. Doesn’t sound like someone who would have much motivation or enthusiasm to work. Times are tough and there’s a lot of more qualified people out there begging for work than “disconnected youths”.
I suppose the thirty-somethings and older with a family to support find work easier than someone under 25 who more than likely lives with their parent(s) or other relative if they are not already working or attending school.
March 26th, 2009 at 11:07 am
We will continue to hire based on the candidates qualifications, skills, experience, knowledge and education (formal &/or informal) related to the requirements of the job, regardless of sex, age, race, etc. We are not going to show favoritism to any specific group or groups, nor will we discriminate against any specific group or groups. I think doing otherwise would be unfair, unethical and unconscionable.
April 1st, 2009 at 6:15 pm
At best, someone might be able to argue “reverse discrimination,” but the fact that Sears, Wal-Mart and restaurant chains like Kentucky Fried Chicken actively screen for tax credits during the application process seems to suggest that the government and courts are friendly to such efforts to provide employment to individuals who are deemed by the government to be challenged in finding jobs. Just apply for a job online at Sears or KFC and you’ll see how well advised companies are capturing millions in such credits based on who they are hiring.
The bottom line is that these tax credits are generally most applicable in entry-level jobs where qualifications and skills are less obvious than at, say, Google or Microsoft–entry level restaurant and retail jobs are actually the most common applications of these credits. I personally applaud the organizations that make an effort to hire “at risk youth” and other “targeted groups” for such jobs.
May 15th, 2009 at 9:08 am
I can understand why legislation would want to give credit for the underprivileged, yet, it encourages discrimination.
My hiring practices will not change. Hiring the best qualified person for the position is always a guaranteed means for success, and always, the best legal practice in hiring.
Jenna
May 15th, 2009 at 12:53 pm
On the other hand, Lilly, our taxes also pay for other possible outcomes for disadvantaged youth, ie, incarceration. We do have to hire with qualifications and skills in mind – T.S. makes a good point that these tax credits would likely be most applicable in entry-level jobs. Personally, I’d rather try to help someone get on the right path with job training than pay for the possible alternatives.