Edwards Angell Palmer & Dodge

Client Advisory - President Signs HIRE Act - Gives Employers Incentives To Make New Hires

Client Advisory PDF & Printable Version

On March 18, 2010, President Obama signed into law the Hiring Incentives to Restore Employment Act (“HIRE Act”), which is intended to “encourage businesses to hire and help put Americans back to work.”

First and foremost, the HIRE Act amends the 1986 Internal Revenue Code to exempt employers from paying a Social Security excise tax on the wages of newly hired qualified employees.

This exemption applies to any non-governmental business or organization including public institutions of higher learning, for wages paid between March 19, 2010 and December 31, 2011. Under the HIRE Act, the exemption would apply to any “qualified employee” who: (1) is hired after February 3, 2010 and before January 1, 2011; (2) has not worked more than a total of 40 hours in the two months prior to being hired; and (3) was not hired to replace an employee terminated from employment without cause. However, employers have the right to decline this exemption.

Additionally, the HIRE Act provides a maximum $1,000 tax credit to the employer for each “retained worker.” A retained worker is any individual who: (1) meets the “qualified employee” requirements described above; (2) is employed for at least 52 consecutive weeks; and (3) whose wages during the last 26 weeks of the taxable year are equal to at least 80% of the wages earned during the first 26 weeks of the year.

If you have any questions regarding the employment incentive provisions of the HIRE Act, please contact the authors, or another member of Edwards Angell Palmer & Dodge’s Labor & Employment practice.

This advisory is for guidance only and is not intended to be a substitute for specific legal advice.  If you would like further information, please contact the Edwards Angell Palmer & Dodge LLP attorney responsible for your matters or one of the authors listed below:

Windy Rosebush Catino, Partner	617.951.2277
Timothy P. VanDyck, Partner	617.951.2254
Nicholas Soivilien, Associate	617.239.0358