Tax Bill Would Extend Work Opportunity Tax Credit
Congress voted last week to extend the Work Opportunity Tax Credit, which for years has offered substantial benefits to employers, including many staffing firms, that hire certain workers.
Although the debate has focused on the extension of tax credits and other tax incentives that were enacted during the presidency of George W. Bush, the bill passed by the Senate also included a four-month extension of the WOTC—from Aug. 31, 2011, to Dec. 31, 2011. The extension is included in the legislation approved by Congress, which was signed by the president Friday.
The WOTC can result in significant credits for employers—generally $2,400 for each new adult hire, $1,200 for each summer youth hire, $4,800 for each new disabled veteran hire, and $9,000 for each new long-term recipient of funds from the Temporary Assistance for Needy Families program hired over a two-year period.
Changes in the law in recent years have streamlined the WOTC process, making it easier for businesses to participate in the program. Employers remain fully in control of the hiring decision and can hire as many individuals as qualify for the tax savings, with minimal paperwork.
A provision supported by ASA to extend the HIRE Act, which provided a 6.2% payroll tax credit to companies that hire previously unemployed workers, was opposed by lawmakers and some businesses because they believed the credit was ineffective in creating new jobs. The HIRE Act allowed employers to choose either the payroll tax credit or the WOTC, but not both. For an employer to get the same tax savings under the HIRE Act as it would get from the WOTC, an employee would have to earn annual wages of almost $39,000. The WOTC will continue to offer employers substantial tax savings.
For information about taking advantage of the WOTC, visit the U.S. Department of Labor Web site, doleta.gov. You can also contact ASA for information on how to apply for the credits.
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District Court: Health Care Mandate Unconstitutional
Last week, a federal district court dealt the Obama administration its first legal setback regarding the Affordable Care Act, the health care reform law enacted earlier this year. Judge Henry Hudson of the U.S. District Court for the Eastern District of Virginia ruled unconstitutional the law's requirement that individuals buy health insurance or face a financial penalty starting in 2014.
The lawsuit was brought by the attorney general of Virginia, who argued that Congress does not have the constitutional authority to penalize individuals who choose not to purchase health insurance. The attorney general also argued that, contrary to the administration's claims, the law's financial penalty is not a tax and therefore Congress cannot rely on its constitutional power to levy taxes as a basis for fining individuals who choose not to buy health care.
Judge Hudson, who was appointed by George W. Bush, agreed on both points. He noted that no court has previously held that Congress has constitutional authority to regulate a person's decision not to purchase a particular product and held that such "unchecked expansion of congressional power...would invite unbridled exercise of federal police powers."
Judge Hudson also held that, although Congress has constitutional authority to levy taxes, the individual mandate isn't a tax; it is a penalty. He said that this is a critical distinction and observed that, although earlier drafts of the law referred to the fine as a tax, the final version deleted that reference and instead refers to the fine as a penalty. He therefore concluded that Congress did not consider the fine to be a tax.
Opponents of the health care reform law were heartened by the decision, but proponents noted that it is but one of more than 20 pending cases regarding the law's constitutionality and that two courts, including another federal court in Virginia, have found the law to be constitutional.
The one thing that proponents and opponents of the law do agree on is that this issue won't be definitively resolved unless and until the U.S. Supreme Court rules on the law's constitutionality, which won't be until 2012 or 2013 at the earliest. Until then, the Obama administration will continue with plans to implement the law and courts will probably continue to issue conflicting rulings, setting the stage for the high court to render the final word just before the individual mandate's effective date of Jan. 1, 2014.
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Temporary Employment: Bright Spot in Jobs and News Reports
More than 3,750 news articles about the staffing industry have been published so far this year—which means 2010 is on track to be the first year since ASA began tracking news media coverage in which 4,000 news articles were published about the staffing industry.
Much of the media focus on the staffing industry has circulated around temporary employment as the bright spot in government jobs reports. Since October 2009, the staffing industry has added almost half a million jobs to the U.S. economy, according to the U.S. Bureau of Labor Statistics. And during those 14 months, journalists, economists, and business analysts have repeatedly cited ASA and staffing industry leaders for insight into staffing trends and analysis on what those trends reveal about U.S. employment.
Here are samples of recent news coverage.
"Staffing firms represent nearly half of all hiring in the private sector to date, according to surveys from the American Staffing Association."
—CNBC.com: "Stocks That Are Hot When Employment Is Not"
"'Temp growth continues to be strong,' said [Adecco's] Tig Gilliam. He said year-over-year growth is inevitably slowing since the recovery in temp jobs is now well into its second year. Employers remain concerned about whether recovery can be sustained, Gilliam said. 'It's not that perm isn't recovering. It's just a pretty anemic pace at this point.'"
—Reuters.com: "U.S. Demand for Temp Workers Remains Strong"
"Temporary jobs are growing faster than regular jobs in the private sector. In September, about 24,000 temporary jobs were added, and in October, the total was 35,000. In both months, those jobs represented 22% of all private sector job gains."
—Courant.com: "Temp Jobs Carry Weight of Employment Recovery"
Additionally, a recent Wall Street Journal article about the BLS's November jobs report included a graph that depicted the significant contributions temporary help services have made to job growth since the start of the recovery. The caption noted: "Employers, facing tepid growth in demand, have been reluctant to hire permanent workers, triggering a surge in temporary workers."
To automatically receive updates about staffing news and media coverage of the industry, visit the ASA newsroom at americanstaffing.net and subscribe to the RSS (really simple syndication) feed. You can also follow the association on Twitter at twitter.com/staffingtweets.
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Don't Be in Doubt About Throwing It Out
Keeping paperwork at bay can strain any staffing professional. Do you know how long firms must retain employment records, by law? The guidelines in this list, illustrating certain requirements of selected federal employment laws, may help. Other requirements may apply to your firm—be sure to check all applicable federal, state, and local laws, and consult with legal counsel and your accountant for tax and other regulations.
Record |
Period of Retention |
Applications |
One year from the date the record was made or the date the personnel action was taken, whichever is later |
Records of personnel actions (hiring, firing, promotion, demotion, transfer, layoff, compensation, selection for training, etc.) |
One year from the date the record was made or the date the personnel action was taken, whichever is later |
Personnel records relevant to charges of discrimination filed with the Equal Employment Opportunity Commission |
Until final disposition of the charge |
Primary wage and hour records, including payroll records with name, address, date of birth, occupation, rate of pay, and weekly compensation earned; collective bargaining agreements |
Three years |
Supplemental wage and hour records, including wage-rate tables, work schedules, and records of pay deductions or additions |
Two years |
Form I-9 |
Three years, or one year from the date of termination, whichever is later |
Employee benefit plans; written seniority or merit rating systems |
Period during which plan or system is in effect plus one year |
Records relating to leave under the Family and Medical Leave Act, including basic payroll data |
Three years |
Employment and payroll records under the Federal Insurance Contribution Act, Federal Unemployment Tax Act, and Internal Revenue Code (federal income tax withholding) |
Four years from the date the tax is due or the tax is paid, whichever is later |
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Give the Gift of Knowledge—Save Up to 50% off ASA Education Products
Professional development increases employee engagement and loyalty, resulting in a higher-skilled and more productive work force. Invest in your company's future today with the ASA education sale.
Through Dec. 31, you can stock up on training materials at 25% off the regular price. You can also purchase the invaluable desk reference, Employment Law for Staffing Professionals, for a special 50% off discount.
Earn your Certified Staffing Professional™ or Technical Services Certified™ designation and gain the recognition of your clients and colleagues as an expert in employment law—you'll have a year from the date of purchase to study for and pass the exam.
Access more than 200 industry-specific courses on ASAPro, the ASA professional development center. Watch them as many times as you want until a year after the date of purchase—you can even share them with members of your team. (The sale does not apply to Staffing World® 2010 workshop recordings on ASAPro or to ASAPro Webinars held in December 2010.)
This sale ends next Friday, so don't delay. The discounts will automatically be applied at checkout to ASAPro and ASA certification materials. Questions? Contact ASA at 703-253-2020 or csp.tsc@americanstaffing.net.
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Benefits Central
In the current economic climate, it's increasingly necessary to keep yourself and your staff abreast of industry trends and issues. That is why ASA offers members free courses on a variety of industry topics. These are just some of the courses available free on ASAPro, the ASA professional development center.
- "Collecting and Leveraging Candidate Data From Job Post to Paycheck"
- "State Unemployment Tax Increases Are Coming—Are You Ready?"
- "Understanding and Improving the Client and Candidate Experience"
To take advantage of the free training your company receives access to, visit americanstaffing.net/asapro and click on My ASAPro Account, then Log In to ASAPro. Enter your log-in and password, then either search for the course by title, or click on My Coursework to view the free-for-members courses.
Don't miss out on these free tools and resources. Renew your membership today at americanstaffing.net. For more information, contact Simone Bielsker at 703-253-2052 or sbielsker@americanstaffing.net.
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