House OKs tax credits for hiring: What’s next?
March 5, 2010 by Jim GiulianoPosted in: Employment law, In this week's e-newsletter, Latest News & Views
The U.S. House approved a bill granting tax credits to companies that hire the unemployed. But like most things in Washington, the story doesn’t end there.
First, before discussing the politics of the bill, let’s describe the key proposals. Employers who hire the unemployed will receive:
- An exemption from the 6.2% Social Security payroll tax for each worker hired through December, and
- An additional $1,000 tax credit per worker if new workers stay on the job a full year.
As they say in the late-night infomercials, “But wait — there’s more.” And that’s not necessarily good.
The current bill, at $35 billion, is a modification of one the House had passed in December with $50-billion price tag, including a six-month extension of jobless aid.
The Senate pared that to a smaller measure. The House amended the Senate’s measure to conform with so-called pay-as-you-go budget rules requiring future spending increases or tax cuts to be paid for with either cuts to other programs or equivalent tax increases.
That tweak means the bill will have to go back to the Senate for approval — or further modification — before President Obama get his chance to sign off on the measure. All of that means we’re probably looking at a minimum of a few more days before the bill becomes law.
Tags: obama, payroll tax, social security
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March 12th, 2010 at 11:11 am
You should not be able to design the body of a car unless you have worked in a hand car wash and a body shop. You should not be able to design an engine/drivetrain unless you have been a mechanic. And most importantly, you should not be able to author a bill in either half of our inept legislative branch unless you have worked in Payroll/Human Resources!
March 12th, 2010 at 11:26 am
I agree with you Bryan.
Do you think they thought about the possible discrimination this could bring about if the ‘ER were to hire the “unemployed” vs. a more qualified, currently employed person? Sounds like a good way to keep the EEOC busy.
March 12th, 2010 at 12:11 pm
You are so right Brian.
March 12th, 2010 at 12:13 pm
I just don’t understand how this makes sense? If you don’t have the money or the work to hire a new employee, how is a small tax incentive supposed to help? I truly think these cooks in congress have no idea how a business works! And how do you place that ad? “Only the unemployed need to apply!” I agree – that’s discrimination. This is NOT the way to create jobs – what morons.
March 12th, 2010 at 12:26 pm
Where are you from? This bill does not say go out and hire someone inexperienced to do a job they are not qualified for. With the amount of people out of work I think finding qualified and professional people that can do the job is quite easy at this point. In fact they can probably do your job and with a little more compassion. Hope you never have to stand in the unemployment line!
Get you head out of your butt, would you want someone referring to you as unemployable when you know you are. Think outside the box!
This is the first plan they should have come up with rather than bail out the banks, the housing, and the car industries. I said to my husband 6 month ago they should give companies tax credits for hiring people. All the money they wasted on these other programs could have went to good use.
My theroy is if people have jobs they will spend money, if they spend money this helps the economy, people with money buy houses, cars, and have savings. I thought of this by myself and have no political agenda for it.
I think at this point we the people can run the country better than the ones in government.
March 12th, 2010 at 2:35 pm
EL, you are right in your thinking, when people have money they spend it which helps the economy. However, if an organization is looking to hire and would receive a tax break for hiring an unemployed person, don’t you think they would be more likely to take advantage of the tax break by hiring the unemployed (experienced worker) vs. hiring the employed experienced worker, which could lead to discrimination?
March 12th, 2010 at 2:52 pm
EL you are so right on! Lynn, Brian, Judy and BW, what kind of morons do you have in your organization that would hire unqualified for a pittance tax credit?? If you do have this caliber of managers in your organization then you deserve the EEOC charge.
March 13th, 2010 at 5:36 pm
It is not illegal discrimination unless you violate Title VII. Here is something else to consider. If the person is unemployed then that individual was “more expendible” to the former employer (let the less qualified, or least productive worker go before you term the best employee). Why then ever with a tax credit would the new employer be motivated to hire someone that another employer thought was “expendable” verse the more productive presently employed?
March 15th, 2010 at 8:14 am
b, I have to slightly disagree, but only because some people get let go because of decisions out of their control, or companies fold or go through mass lay-offs and everybody loses. I had one friend who was one of the most productive employees at a company, and he was laid off with the rest of his department in a merger.
I also have fears of discrimination in this legislation, but, I think companies will act in their best interest. Normally, the employed have the advantage over the unemployed when applying for a job, as they tend to have views like b or sway that way. However, now there are more good employees out there unemployed, and this gives them more weight. BUT, when it comes down to it, companies will go for who they think are the best for the position. If it’s close between an employed and unemployed candidate, then the legislation may have some power in the decision.
I have been passed over for a job before for someone less employed, but, I did not feel I was discriminated against; the company simply was going for people who they thought better fit their mold.
Also, don’t ever blame Congress or call them unfit to make decisions; we voted for them, ultimately, and if you don’t like what they do, then take a more active role in politics. Especially don’t complain if you don’t vote. Plus, most of them are pretty elite, well-educated individuals.
March 15th, 2010 at 8:55 am
El and Denise
It is possible to disagree without name calling and crude comments.
March 15th, 2010 at 9:12 am
b says REPLY:
Title VII, What can be seen those inside EEOC are making a decision, without making an investigation, or some may say just look over the evidence, that all will not be treated the same under the law. The comments made in CRST are a few of those complaints that no one was investigated. EEOC has a mandatory obligation to investigate, read Iowa District Court decision. This is where EEOC crosses the line and in apparent violation of Federal criminal law. Criminal law violations are the opurview of the United States Attorney not a District, State or Curcuit Court. More info reply to comment Richard
March 31st, 2010 at 2:44 pm
This will work much like the tax credits did (not), to stimulate the economy. The only ones who would take advantage are the ones not hurt! You have to buy a house for the house credit, you have to buy a new car for that credit, now you have to hire new employees, instead of offering a (pay raise) to get this credit.
If we hired someone we didn’t need to get this credit, with a whole room full of employees hungry for OT or a raise….
And I agree with the above folks who said the EEOC will get more work. Will they get the credit for new hires? hmmmm
April 3rd, 2010 at 8:04 pm
Theresa: About EEOC hires. The matter of CRST and other comments provided on the issue EEOC does not or did not investigate. EEOC is required by law to investigate. EEOC in the CRST and comments made by others suggested no investigation but somehow a determination was made of the violations of its statutes. That is called predetermined judgement. It is also a violation of Federal criminal law. What seems to be going on is the generating of numbers by EEOC. Under the provisions of the law all people are to be treated the same. EEOC does not share that concept of law. More info reply to Comment Richard
May 24th, 2010 at 2:23 pm
Comment to “b Says:” b, wake up, obviously you have middle-pay, middle management job and don’t read much. Corporate America has been releasing hi-experience, hi pay males to meet shareholder profit demands. Most often, these are the BEST that are unemployed. Hope you are fotunate enough to never experience it! Stay low and don’t suceed.