the federal hire act: a win-win for business and the workplace

signed into law by president obama on march 18, the hire act has the potential to be a direct boost to a business’ bottom line because it will both help employers and at the same time encourage job creation.

by gary butler
president and ceo of adp

far too many americans are currently unemployed, yet many small- and medium-sized businesses remain at the cusp of resuming hiring.  it is hoped that the hire act will serve as a catalyst that will help our economy recover.   i believe this jobs bill is a good piece of legislation that comes at a very opportune time.

the hire act provides incentives for businesses to hire new employees sooner rather than later.  the incentives for businesses are straightforward, immediate and are available for each job created. the bill eliminates the current 6.2 percent employer social security tax for eligible new employees, generating immediate savings that will positively impact a business’ bottom-line.   it also requires any new hire to certify his/her previous employment status by signed affidavit.  additionally, companies are afforded a significant income tax credit of $1,000 per qualifying worker once the worker is employed for at least 52 consecutive weeks.

while these measures are welcome by employers, staying compliant in this complex and quickly changing business environment can be a burden for companies of all sizes.  adp, the leading provider of outsourced hr, payroll and benefits administration services, is committed to making it easy for clients to remain compliant while reducing expenses and increasing cash flow. we’ve done this before, helping businesses reap the benefits of special legislation such as the katrina tax credit and the cobra stimulus plan.

for employers already stretched thin, administration and compliance can be a somewhat complex and time consuming process.  pre-selection and screening of eligible employees, affidavit certification, eligibility reporting, compliance support, documentation and audit support as well as tax credit administration are all tasks that the business must execute either on their own, or with support of companies like adp which has helped businesses for over 60 years to reap the benefits of special stimulus legislation.

at a time when employers are challenged to do more with less, outsourcing non-core or administrative tasks is one way to enhance employee productivity and increase profitability.  legislative reform is a major focus of the current administration, and regulations like the hire act will continue to put pressure on employers to understand and respond to new requirements. helping clients understand and take advantage of legislation like the hire act is a primary benefit of partnering with adp.

gary butler is the president and ceo of adp, serving some 570,000 clients worldwide. for more information and to obtain an estimate of a company’s potential hire act savings, visit www.adp.com/jobtaxcredit or call 1-888 5 adp save.

posted on march 29, 2010