Information on the HIRE Act

The Hiring Incentives to Restore Employment (HIRE) Act is a new law that exempts businesses that hire “qualified individuals” from paying the 6.2% Social Security payroll tax through Dec. 31. The law grants an additional tax credit of $1,000 or 6.2% of wages, whichever is less, if new workers stay on the job for 52 consecutive weeks.

President Obama signed the HIRE Act on March 18, 2010. This new $17.5 billion legislation is of particular interest to businesses as it includes new tax benefits directly related to hiring employees and writing off investments in equipment.

The new tax incentives for businesses to hire unemployed workers:

  • payroll tax exemption of the employers share of Social Security taxes on wages paid to these workers after March 18, 2010.
  • employer tax credit of up to $1,000 per worker

The new employees must meet these criteria in order to qualify for the business tax credits.

  • hired between Feb 3, 2010 & Jan 1, 2011
  • newly-hired employee was unemployed during the 60 days prior to starting work, or worked fewer than 40 hours for someone else during the 60 day period

Household employers are not eligible for the new tax benefits.

The HIRE Act is aimed at providing hiring incentives to restore some of the jobs lost in the latest economic recession. The goal is to help put Americans back to work as soon as possible. Business owners that hire qualifying workers sooner rather than later will get the most out of the tax credits, as the tax credits diminish over time, disappearing completely by January 1, 2011.

This federal jobs bill also permits small business owners to write off equipment investments of up to $250,000 this year, instead of taking years to depreciate. This in a doubling of the previous amount of $125,000. This will provide tax incentives for small businesses to grow while stimulating the economy with their investment spend.

President Obama’s job creation bill also includes provisions for putting people to work by reforming municipal bonds. Build America Bonds will allow the money to be spent on construction & repair of public projects like schools, highway and transit programs, as well as green and clean energy conservation projects like wind turbines and solar energy devices. Some of this money comes from moving $20 billion into the highway trust fund.

For more information on the HIRE ACT, please visit http://www.irs.gov/newsroom/article/0,,id=220326,00.html

The New HR Department

By Doreen Koronios

When the dust settles as the economic recovery slowly continues, what will be the new function of the forever changed HR department?  Those in the know realize that the newly evolved HR practitioners will now be more of strategic partners to their organizations rather than being just in the “people business”. The new role means integrating people strategies with business strategies in an effective way to move the company forward and add to the company’s bottom line.

Besides handling the traditional HR functions of hiring, handling benefits, and being the keepers of policies and procedures, HR managers need to transition into contributing to accomplishing organizational goals and objectives.  In this role, the HR manager must thoroughly know the business, its customers and its products in order to create the right work positions and work environment, and hire the right employees with the competence and commitment to service the clients well. A recent article in Harvard Business School’s BNET states that HR must play an active and guiding role in enabling the company to choose its people well, invest in them, support their growth and respect their needs, while fostering innovations needed to achieve the strategic business objectives. This vital role requires competence in coaching leaders in behaviors that will create and sustain a flexible and adaptive workforce, and in innovating at the accelerated rate of change of a global post-industrial economy.

While the HR practitioner is busy being a strategic business partner in an already downsized division, what happens to the traditional HR duties of hiring and on boarding personnel?  How about a non-traditional form of “outsourcing” these processes by using self-service technology offered by third-party providers of Human Resources solutions! HR departments can streamline processes using the third-party provider’s technology and offerings while maintaining in-house control by accessing offerings via self-service online platforms. This option is a smart one for HR practitioners who want to keep the traditional functions in-house, yet are in need of an efficient way to eliminate the time consuming and error prone paper-based processes.

Simply put, technology that streamlines the background screening and hiring processes can lead to more informed hiring decisions, which should ultimately put the right person in the right job thereby reducing turnover and costs. An effective on boarding solution allows applicants to enter their information and credentials directly into an online application or kiosk, thus eliminating the data entry time. This improves the productivity of the HR department by freeing employees to focus on other tasks like helping to grow the business. It also reduces time lost chasing down errors now caught in real-time through predefined validated fields. In addition, a self-service solution enables the HR department to manage the new hire process and documents more efficiently by not only storing those documents electronically, but also by presenting forms to be signed when needed and as needed in a logical workflow.  This streamlined approach ensures legal compliance as well as productivity and profitability. It’s a win-win for the busy HR practitioner!

For more information on how CARCO’s Onboarding Solution can help you streamline your processes so you can focus on the challenges of being a strong strategic partner to your organization, please visit www.carcogroup.com or email us a sales@carcogroup.com.

Utah Enacts Universal Mandatory E-Verify Bill

By Doreen Koronios

On April 1, 2010, Utah Governor Gary Herbert signed a bill into law requiring Utah employers to use E-Verify to ensure they are hiring legal workers.  Utah joins Arizona, Mississippi and South Carolina as states that  require all employers to verify their workers. Another 10 states require certain groups of employers, usually public agencies and contractors, to verify workers using E-Verify, and nine states have laws reinforcing federal law in other ways.

The bill was supported by a broad base of constituencies which were motivated by the realization that E-Verify helps protect the citizens of Utah from identity theft and fraud.

The provisions of the bill are as follows:

  1. Participation is voluntary for the first year (to give businesses time to enroll and adjust their hiring procedures)
  2. Participation is mandatory as of July 1, 2011.
  3. The law applies to employers with 15 or more workers.
  4. Employers of legal guest workers would not have to use E-Verify.

An interesting point to note is that there are no penalties for non-compliance. Instead of sanctioning employers, the state will provide positive incentives for compliance including exemption from penalities under state law should a company using a status verification system inadvertently hire an illegal worker.  The state will also maintain a list of those enrolled in the program to encourage the public to monitor which businesses follow the rules and reward them with their business.