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New HIRE Act Provides Tax Breaks for Employers

Labor & Employment Law Update

On March 18, 2010 President Obama signed the Hiring Incentives to Restore Employment Act ("HIRE" Act) (Public Law No. 111-147), which provides a tax break for employers who hire unemployed workers.

Specifically, the law exempts private employers from paying Social Security taxes on wages paid to workers after March 18, 2010 through the end of the year if those workers were previously "unemployed" (i.e., not employed for more than 40 hours during the last 60 days). The tax break is available for employees who are hired into new positions and existing positions so long as the vacancy resulted from a voluntary separation or for-cause termination. Employees must be hired by December 31, 2010 to qualify.

Starting in 2011 an additional tax credit of up to $1,000 is available to employers under the HIRE Act if they retain newly-hired employees for one year or longer at substantially the same pay.

For more information, employers should contact your local Quarles & Brady attorney.

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