Ready to Hire Employees Again? The HIRE Act Has Some Great Incentives for You

Beth Dean 03.15.10
103 Workshop Iphone

The Hiring Incentives to Restore Employment (HIRE) Act (H.R. 2847) has been signed into law and will provide significant tax incentives to companies who hire certain workers who have been unemployed.

Signed by President Obama on March 18, The HIRE Act provides relief from the 6.2% employer portion of Social Security FICA Tax for hiring workers who meet eligibility requirements, as well as a tax credit for employers who retain those employees for at least one year.

Designed to create new jobs for the currently unemployed, this Act will offer companies great savings while helping to heal the economy.

Hire Employees and Earn Payroll Tax Forgiveness:
Companies who hire Qualified Employees will have the 6.2% portion of that employee(s) FICA tax forgiven up to the $106,800 wage maximum for the remainder of 2010. This allows savings of up to $6,622 per qualified employee.

To qualify, the new employee(s) must meet the following requirements:

  • The employee(s) must have started work between February 3, 2010 and Jan 1, 2011.
  • The new employee(s) must have been unemployed for at least 60 days (with no more than 40 hours of work during that time) prior to his or her start date.
  • The new employee(s) must not be replacing an existing current employee(s), unless the position was vacated voluntarily or for cause. 
  • The new employee(s) may not be related to the employer or own more than 50% of the business.
  • This Act applies to both part-time and full-time employees. 
  • This can apply to your previously laid off employees.

Keep Employees and Earn a Retention Tax Credit:
Companies who keep these new employee(s) on the payroll for at least 52 consecutive weeks can receive an additional tax credit of the lesser of $1,000 or 6.2% of the wages received during that year-long period.

To qualify, the new employee(s) must meet the following requirements:

  • The employee(s) must meet all of the same eligibility requirements set forth above for the payroll tax forgiveness.
  • You must employ the new worker for the full 52 consecutive weeks; there is no prorated amount for a shorter time period.
  • Workers eligible for foreign earned income exclusion are not eligible.
  • Wages cannot significantly decrease over the course of the 52 weeks; wages for the second half of the year must be at least 80% of the wages the employee(s) earned during the first half of the year.

What This Means to You:
This tax credit does not have a limit on new hires, so the more unemployed workers you hire, the more savings your company will receive.

Since the Social Security FICA tax relief has time constraints, hiring employees sooner rather than later will allow companies to save more, as well. Nextep’s Human Resources Department is available to help with your recruiting needs.

Similar to the COBRA Subsidy, Nextep is prepared to administer these tax savings for you. As the Department of Labor releases their official paperwork, we will assist you with specific instructions and forms needed to take advantage of this savings.

Also on Nextep

How do you handle employee promotions? When promoting one of your star employees to a management or supervisory position, companies should take the time to train and help the manager adjust to their new role.  An employee’s relationship with their immediate supervisor is one of the top five factors in job satisfaction, so a new […]
Read more
It should be no surprise that your employees post on social media or even blog throughout the day ─ maybe even on company time or equipment. And while they may not post on the clock, it’s unlikely that after hours they think their social media or blog posts could have consequences at work. While employers […]
Read more
The holidays can raise confusing questions on how to pay your employees, especially since there are separate rules for nonexempt and exempt employees. Here is a quick reminder on how to pay both groups during holidays. Pay for Nonexempt Employees If your business is closed for the holiday(s), the Fair Labor Standards Act (FLSA) does […]
Read more
The Equal Employment Opportunity Commission (EEOC) recently released the “Know Your Rights” poster, which updates and replaces the previous “EEO is the Law” poster. Covered employers are required by federal law to prominently display the poster in their workplace.  DOWNLOAD POSTER What it covers The poster includes federal laws prohibiting job discrimination, as well as […]
Read more
Did you know that claims for unemployment benefits from former employees can increase your State Unemployment Tax Act (SUTA) tax rate? Managing the unemployment process can sometimes take excessive resources making it difficult for business owners to give unemployment claims the attention they require. Nextep manages this process for our PEO clients and can help […]
Read more
ALEXANDRIA, Va., October 27, 2022 (Newswire.com) – The National Association of Professional Employer Organizations (NAPEO) announced today that Hank Johnson, Director of Risk Management & Legal Compliance of Norman, OK-based Nextep, Inc., has been elected to the association’s Board of Directors during its annual member meeting last month.  Johnson is among nine new industry leaders elected to […]
Read more
How to handle the SSN in the workplace The Social Security Administration has announced that an individual may now self-select their gender on their social security number (SSN) record. Previously, the sex marker would have to match medical records and other legal documentation. Now, a person can select the male or female sex designation of […]
Read more
Workplace violence among employees is a threat that all companies should be aware of and work to prevent. In 2020, workplace assaults resulted in 20,050 injuries and 392 fatalities, according to Injury Facts®. Background screening before hiring can help find warning signs and prevent employers from hiring a known threat. Sometimes, though, the employee has […]
Read more
When completing the I-9 to verify employment eligibility, you may notice that the form will expire on October 31, 2022. Usually, the government releases a new form to replace the old one. However, the Department of Homeland Security (DHS) and US Immigration and Customs Enforcement (ICE) has announced an extension to the existing form.  As […]
Read more
Should an employee clock out for a short break? What if they leave the office? Knowing the ins and outs of employee pay can be tricky, so today we’re tackling break times to help keep you in the know.  Generally, nonexempt employees do not clock out when taking short breaks of 20 minutes or less […]
Read more
Can I make my employee remove his nose piercing? Can I require dresses? What if my employee smells horrible?  These and other questions frequently arise when companies are developing effective dress codes. A thorough dress code that respects each employee’s judgment and comfort can be challenging for employers to come up with on the fly […]
Read more
It’s more critical than ever to make sure your business has a stable foundation. Businesses must be able to adjust to unforeseen circumstances and keep a solid financial footing through hard times. Here are 4 ways a PEO can help your business have more financial stability and weather trying times: PEO + OVERALL COST SAVINGS […]
Read more

Download Our App