President Obama recently signed into law the Hire Act of 2010.

In efforts to keep our clients informed, below is a summary of the new Hire Act. Basically, the act gives financial incentive to employers who hire unemployed individuals.

• Exempts employers from paying the employer share of Social Security employment taxes on wages paid in 2010 to newly hired qualified unemployed workers.
  
  These are workers who:
  
  
  1. Began employment with the employer after February 3, 2010 and before January 1, 2011,
     
     
  2. Were previously unemployed at least for 60 days. The new hire must certify in the form of an affidavit that the individual has not been employed more than 40 hours during the 60 day period ending on that date such individual begins such employment.
     
     
  3. Do not replace other employees of the employer, unless the other person left voluntarily or for cause.
     
     
  4. Are not related to the owners
     
     
• The payroll tax relief applies only for wages paid after the enactment of the ACT (the date the HIRE Act is signed into law by the President) and before 2011
  
  
• The maximum exemption per employee does not exceed $6,621 that is 6.2% of $106,800 the limit for Social Security Wages.
  
  
• It encourages employers to hire early to take advantage of better benefit. The exemption is per qualified New Hire and there is no maximum limit.
  
  
• Provides employers with an up-to-$1,000 tax credit for retaining qualified unemployed workers. The workers must be employed by the employer for a period of not less than 52 consecutive weeks, and their wages for such employment during the last 26 weeks of the period must equal at least 80% of the wages for the first 26 weeks of the period.

We are anxiously awaiting guidance and direction from government agencies on implementing the new requirements of this act. Additional information to follow as it becomes available.

To see how much you could save with the HIRE Act, check out our HIRE Act calculator.

If you have any additional questions, please feel free to contact an Emplicity team member at 877.HR.MADEZ (476.2339)