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The HIRE Act
Last week the US Senate voted in favor of the Hiring Incentives to Restore Employment Act (HIRE). Potentially, this legislation will give employers a payroll tax exemption for hiring new employees in 2010 so long as the potential recruit had been unemployed for at least 60 days prior to hire. If this measure passes the House, and ultimately is signed into law, how do you think it will affect your company? Do you anticipate an increase in hiring? Do you think this legislation could adversely motivate an organization to pick one candidate over another because of a potential tax break?
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I do not see any significant impact from this legislation and frankly see it as political eyewash that will have little to no effect on jobs.
The HIRE Act will only be temporary and will have little impact – a qualified employer who hires a worker earning $51,000 annually will receive a subsidy equaling roughly $264 per month. There will certainly be reporting and other administrative actions required of employers in order to realize the promised temporary tax incentives that will further dilute the $264 monthly incentive. In that the savings is the 6.2 pct SS tax, imagine the "incentive" a minimum wage employee will give to an employer. The tax incentive doesn't even cover a weeks wages.
In that the cost of hiring exceeds the incentive to hire what possible motivation would a business have for hiring someone in order to capitalize on this bill? A face value exploration plainly shows that the ROI is negative; in that business is in business to make a profit then this is a loss incentive that doesn't cover the financial burden of the loss.
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