The HIRE Act

The HIRE Act stands for Hiring Incentives to Restore Employment. Congress passed the Act to create incentives for employers to hire workers who have been unemployed. The Act provides a tax credit. Normally, employers have to pay a 6.2% Social Security tax for all employees. The HIRE Act provides employers an exemption for all employees who qualify through the end of the year.

What does it mean to be qualified? In order to receive the credit, an employee has to only have worked 40 hours in the 60 days prior to being hired.

There is no “template” or standard form for an Employee Handbook. You just want to ensure that your handbook reflects your particular business policies. Whatever format you choose, the important thing to remember is to clearly state business policies and procedures, company rules and employee standards. This will also promote equal application of policies among employees.

Who is eligible? An employer is not allowed to replace an existing employee to receive the tax exemption. There are two exceptions to this: (1) if the previous employee voluntarily resigns or (2) if the employer fires the previous employee for cause. In addition, a business owner’s family members are not eligible for the HIRE exemption.

To claim a HIRE exemption, an employer has to do two things: (1) an employee has to fill out an affidavit that states that they meet all of the qualifications and (2) to finalize the claim, the employer needs to claim the exemption in their quarterly tax returns.