President Obama’s finally signed the much-debated $18 billion jobs bill. What does that really mean for your company?
The Hiring Incentives to Restore Employment (HIRE) Act is designed to encourage companies to bolster staffs through two tax breaks: savings on payroll taxes and an additional one-year tax credit on new hires. Besides the $18 billion in employment incentives, HIRE also authorizes $20 billion for highway and transit projects.
To qualify for the tax breaks, new employees must be (or have been) hired between Feb. 3, 2010, and Jan. 1, 2011. Each new hire must certify, in writing, that he or she’s been unemployed for 60 days.
The two-tiered tax incentives shake out like this:
- Through the rest of the year, employers don’t have to pay new hires’ 6.2% Social Security payroll tax, and
- Companies are entitled to a credit equal to 6.2% of total salary — up to $1,000 — for each new worker who sticks around for 52 consecutive weeks. The credit can be taken on the company’s 2011 tax return.
HIRE had been passed by the Senate earlier. But then it went back to the House, where it was modified, so the Senate had to vote on the measure again. It finally passed March 17, 68-29, in likely the most bipartisan ballot of the current Congress.
Will it work?
So will companies start hiring? Experts say the hardest-hit organizations, still suffering depressed revenues from the economic slowdown, probably won’t find the tax incentives enough to add substantial numbers of employees. Companies on the cusp of returning to solid profitability might find the tax savings the push they need to dive into the labor pool.
Overall, the administration estimates HIRE will create 250,000 new jobs.
What do you think? Are the incentives enough to make your company take on new workers? Tell us in the Comments section below.