Lawmakers Introduce Bills to Boost Hiring

Posted on February 5, 2010 by Ilyse Schuman

With the Obama administration’s renewed emphasis on job creation, a number of lawmakers have introduced bills that focus on employer incentives. On Wednesday, Senators Chuck Schumer (D-NY) and Orrin Hatch (R-Utah) released details about the Hire Now Tax Cut Act of 2010 (S. 2983), legislation that would exempt any employer that hires a worker who has been without full-time work for at least 60 days from paying the employer’s share of Social Security taxes on that worker for 2010. According to its sponsors, the advantage of structuring a tax incentive in this fashion is that it would provide businesses with an immediate benefit, instead of rewarding them with a tax credit in 2011. Additionally, the benefits to an employer would increase the longer it retains and the more it pays the employee, up to the maximum Social Security wage of $106,800.

As outlined in a Washington Post article:

for any qualifying worker hired under this incentive that the employer keeps on payroll for a continuous 52 weeks, that employer is eligible for an additional $1,000 tax credit after the 52-week threshold is reached, to be taken on their 2011 tax return. In order to be eligible, the employee’s pay in the second 26-week period must be at least 80 percent of the pay in the first 26-week period. Workers hired after the date of introduction (February 2) are eligible for the payroll tax forgiveness and the retention bonus, but only wages paid after the date of enactment receive the exemption from payroll taxes.

Unlike President Obama’s proposal to provide tax incentive to employers that increase hiring, the Hire Now Tax Cut Act would not redirect funds repaid through the Troubled Asset Relief Program (TARP). The relative simplicity and bipartisan nature of this bill increases its chances that it could receive serious consideration in the coming weeks.

Meanwhile, Senators Senator Bob Casey (D-PA), Kirsten Gillibrand (D-NY), Carl Levin (D-MI) and Mark Begich (D-AK) have also introduced a measure to encourage hiring. The Small Business Job Creation Tax Act of 2010 (S. 2973), would provide employers that increase their payroll by a certain percentage a one-time tax credit of 20 percent for small employers and 15 percent for large employers (those with more than 100 full-time employees.) The credit would only apply to an employee’s wages up to the Social Security wage base of $106,800. A companion bill (H.R. 4585), has been introduced in the House of Representatives by Rep. Carolyn Maloney (D-NY). These bills are similar to a number of other job creation bills that have been introduced in recent weeks.

Photo credit:  amphotora
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Bill Would Expand Various Employer Tax Credits

Posted on October 18, 2009 by Jay Sumner

Last week, lawmakers introduced legislation that would increase employer tax credits to encourage hiring. The Helping Invigorate and Revive our Economy Act of 2009 (HIRE America Act) (H.R. 3784) would expand the Work Opportunity Tax Credit (WOTC) and increase employer-provided child care credits, in addition to making the WOTC permanent. As it stands, the WOTC is set to expire on August 31, 2011.

In a press release, Rep. Tom Rooney (R-Fla.), who along with Rep. John Boccieri (D-Ohio) introduced the bill, explained that the legislation would increase the income tax credit for employers for each employee who is eligible under current WOTC criteria up to 50 percent. The bill would also create a new income tax credit for all other hires outside the current WOTC up to 30 percent. In addition, the bill would increase the maximum wage eligibility for veterans under the current WOTC from $12,000 to $16,000, and boost tax credits for employers who offer childcare services or benefits to employees up to 35 percent.

This bill has been referred to the House Committee on Ways and Means.
 

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Eagle Employers Act is Reintroduced

Posted on February 20, 2009 by Jay Sumner

As expected, many of the failed labor and employment-related bills from the 110th Congress are being recycled this year. Just last week, the Eagle Employers Act (H.R. 989) was reintroduced by Rep. Jim Gerlach (R-PA). This bill would use the tax code as an incentive to encourage U.S. companies to create and maintain domestic jobs instead of outsourcing positions abroad. The Act would provide a 1% tax credit to employers with 50 or more employees that do the following:

  • Maintain their headquarters in the United States;
  • Pay at least 60% of their employees’ health care premiums;
  • Maintain or increase the number of their full-time workers in the United States relative to their full-time workers outside of the country;
  • Provide full differential salary and insurance benefits for all National Guard and Reserve employees called to active duty; and
  • Provide its employees with certain higher levels of compensation and retirement benefits.

The bill may garner wider appeal and pass in some form during this legislative session for the following reasons: 1) the choice to become an “Eagle Employer” is completely voluntary; 2) the bill had bi-partisan support in the last Congress; and 3) President Obama has emphasized the need to create jobs for Americans.

This bill was referred to the House Committee on Ways and Means.
 

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