WORK OPPORTUNITY TAX CREDIT
Up to $9,600 per employee
The Work Opportunity Tax Credit (WOTC) is a Federal tax credit incentive available for hiring individuals from certain target groups who have consistently faced significant barriers to employment. There are various targeted groups including veterans,people on long-term family assistance, and ex-felons.
A qualified ex-felon is a person hired within a year of:
- Being convicted of a felony, or
- Being released from prison for the felony
If you hire a qualified justice-involved individual you can receive a tax credit of up to $2,400 or the equivalent of 40% ofthe first year’s qualified wages. The employee must work a minimum of 120 hours to qualify to receive the full amount,the employee must work at least 400 hours.
If your candidate qualifies under more than one target group (e.g., being a veteran as well as a justice-involved individual),you may be eligible to receive a credit of up to $9,600. You can apply for as many prospective employees as you wish – you’ll receive the tax credit for all eligible new hires.
The credit is only available to new hires, and you must apply for the credit within 28 days of your Fair Chance hire.
Bottom line: The WOTC can provide significant tax savings to your business. This is a time sensitive process – so please contact California’s Economic Development Department (EDD) or your local AJCC to apply as soon as you want to make a hire.
Fidelity insurance bonds to indemnify employers
The Federal Bonding Program funded through the U.S. Department of Labor provides fidelity insurance bonds to indemnify employers for losses sustained through theft, forgery, larceny, and/or embezzlement. These bonds are good for up to six months from the hiring date and cover up $10,000, at no cost to employers.
To qualify for bonding insurance, the job must be a minimum of 30 hours per week and must have the expectation of lasting six months or more. The worker must meet the state’s legal age for working.
Bottom line: Federal bonding programs can make you feel more secure about your hiring decision, with no out-of-pocketexpenses and a $0 deductible.
Offset the cost of training new employees
On-the-job training (OJT) can be used by employers who are providing occupational training to eligible employees to offset a portion of the costs associated with the time/materials/reduced productivity a business may experience while training a new employee.
Eligible employers can be reimbursed for up to 75% of the trainee’s wage to cover the above cost for a typical duration of six months. This program applies to various Workforce Investment Opportunity Act (WIOA) eligible participants, includingthe formerly incarcerated.
For more information about OJT or to get started, please contact a Business Service Representative at your local AJCC.
Bottom line: On-the-job training can help ensure that the justice-involved individual you hire is ready to contribute at a high level. You’ll be reimbursed a significant portion of your training costs.
LA COUNTY TARGET HIRE PROGRAM
Unlock local contracting opportunities
In 2016, LA County adopted a local and targeted worker policy for all County-sponsored construction and development projects with a budget of $500K or greater.
The policy established that at least 30% of labor hours must be performed by a qualified local resident, and 10% of labor hours must be performed by residents classified as Targeted Worker, which includes the formerly incarcerated. This means that businesses are better positioned to win LA County contracts if they hire justice-involved individuals.
Bottom line: Employers who participate in Fair Chance hiring practices will have a better shot at winning lucrative LA County contracting opportunities.