HR Specialist

Hiring Incentives to Restore Employment (HIRE) Act

In Human Resources on March 23, 2010 at 12:26 pm

On Thursday, March 18, 2010, the US Senate passed the Hiring Incentives to Restore Employment Act (the “HIRE Act”).  This act is intended to focus on job creation at a time when many Americans are struggling to find employment in a challenging economy.

 Included in the HIRE act is the Schumer-Hatch Jobs Payroll Tax Exemption. This provision would offer employers an exemption from social security payroll taxes for every worker hired after Feb. 3rd, 2010 and before Jan. 1st 2011 that has been unemployed for at least 60 days. The maximum value would be equal to 6.2% of wages up to the FICA wage cap ($106,800). There would also be an additional $1,000 income tax credit for every new employee retained for 52 weeks to be taken on the employer’s 2011 income tax return. This proposal is estimated to cost $13 billion over ten years.

“For those employers that are on the verge of hiring, but for financial reasons have not made the decision to move ahead, the HIRE Act may be just the push needed to make a decision,” said Mike Freeman, CEO of Cardinal Services, Inc. “The incentives appear to be straightforward and immediately available, and while we do expect these measures to be welcomed by employers, staying compliant is likely to be a burden for them as well.” 

As a provider of payroll and other employer services for many employers in the area, Cardinal plans to take a lead role in ensuring their clients have everything in place to take advantage of this opportunity, including:

  • Determining eligibility of job applicants and current employees, including ensuring that the employee affidavits required by the HIRE Act are completed correctly.

 

  • Keeping a pool of those unemployed job applicants that will qualify for this program, for fast and efficient hiring for those employers that will take advantage of this act in the upcoming months.

 

  • Maintaining all necessary documentation and assisting clients in responding to related audits.  As with its predecessor the American Recovery and Reinvestment Act (ARRA), it’s likely a close eye will be kept on employer compliance, and that includes documentation.

 

  • Notifying clients of the availability of the $1,000 per qualified employee new-hire income tax credit after the eligible employee completes their necessary employment period, and assisting them in receiving the reward.

According to Freeman, Cardinal plans to offer these services at no additional charge to their clients, effectively playing their part in any push in restoring employment in their communities.  While Cardinal’s first priority is their current clientele, Freeman did offer that if employers are in need of assistance, or just have general questions on how to proceed, they can contact any Cardinal office statewide.

Cardinal Services is a payroll and employer services provider, with offices throughout Oregon.  They help small and mid-sized businesses manage and retain their employees.  For more information, visit the company’s web site: www.cardinal-services.com, call or email Derek Jensen at 800.772.8792, ext 2210, derek@cardinal-services.com.

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