Could The HIRE Act Push Businesses To Hire The Unemployed?

By Jennifer Loren, The Oklahoma Impact Team

TULSA -- For the first time in a year and a half, the unemployment rate is below 10 percent in all 77 of Oklahoma's counties. But the federal government is still introducing new laws aimed at lowering unemployment even more. The HIRE Act is a little-known program, signed by President Obama in March, which offers businesses tax incentives to hire the unemployed. But, many people wonder if it will actually work.

A Tulsa staffing business called Part-Time Pros is taking advantage of the HIRE Act. Whitney Dodson is the new office administrator there. She used to work as a recruiter, but the economy took its toll on that company last year and she was laid off. Dodson says no one is hiring Human Resources professionals right now and getting this job means a lot to her and her family.

"It's definitely secure. It's definitely better on the household," said Dodson.

Carey Baker is the President of Part Time Pros. When she hired Dodson her company became eligible for tax incentives as part of the HIRE Act.

It stands for the Hiring Incentives to Restore Employment Act. Businesses can receive two tax incentives for each new worker. To qualify the employee must have been unemployed during the 60 days before beginning their new job or worked fewer than 40 hours during that 60 day period. It applies to anyone hired between February 3rd and December 31st of 2010.

Baker says she quickly figured out which of her employees qualified.

"And if they did qualify we had them fill out the forms and have sent it in because it's just a win win," said Baker.

A win win because she'll get money back. The first benefit is a 6.2 percent payroll tax incentive, exempting businesses from their share of the employee's social security taxes. The second is a tax credit of up to $1-thousand dollars for every worker retained for at least a year.

Analysts say for every worker who makes $25,000 a year, the company could save about 15-hundred dollars.

"If we get any money whether it's a dollar or a hundred dollars, it's money we didn't have yesterday," said Baker.

But will the HIRE Act do what it's intended to do? Will the tax benefits actually push employers to hire unemployed people over others? Baker says not here in her office.

"You know you really can't say I'm going to hire someone because I'm going to get money from them. That is just, maybe some businesses work that way. My business doesn't. We're looking for the best talent. We're looking for the best fit for that job. If that person qualifies for the HIRE Act, great, if not, no big deal," said Baker.

At the Oklahoma branch of DMI Industries, a wind tower manufacturing company, administrators say their jobs are too specialized to show preference to someone because they're unemployed. They say the HIRE Act's tax incentives would not influence who they hire either.

Economic development expert Jim Fram says all businesses could benefit from the HIRE Act. But, he says, businesses that provide lower-skilled, lower-wage positions could benefit the most. Many of those businesses would have more freedom to hire someone based on their recent employment history and not necessarily their skill level.

"This particular incentive is designed to get somebody who's been collecting unemployment, who's unemployed, back into the workforce. So it's going to be beneficial to some companies that can take advantage of that situation," said Fram, the Senior Vice President for Economic Development at the Tulsa Metro Chamber.

Blue Cross Blue Shield employs people with a high school diploma and without college degrees for their cal center. Administrators there say they plan to take advantage of the HIRE Act, but are still working on their approach.

A spokesman for the I-R-S says the HIRE Act is too new to know how well it's working or how many companies are filing for the exemptions.

Click here to download the tax exemption form.