In the HR world, two activities demand a lot of your time and attention – bringing new people on board, and letting people go. And not surprisingly, the recent recessionary crunch and temperamental job market have led to some legal changes that affect your hiring and firing practices. Here are some of the latest legal considerations – and the paperwork you need to stay on track.
Hiring – Claiming the payroll tax exemption under the HIRE Act
In a move to encourage recession-weary employers to hire again, President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act on March 18, 2010. Under HIRE, qualified employers will receive two important tax breaks for hiring and holding onto previously unemployed workers:
A payroll tax exemption — An exemption from the 6.2% share of Social Security tax on wages paid to qualifying employees from March 19, 2010 through December 31, 2010
A new hire retention credit — A general business tax credit, up to $1,000, for each qualified employee retained for at least a year
You can now use the recently issued “HIRE Act Employee Affidavit,” or “Form W-11” to claim the payroll tax exemption. The main purpose of this form is to get qualified employees to state, by a signed affidavit and under penalties of perjury, that they have not been employed for more than 40 hours during the 60 days prior to beginning employment with you.
Take advantage of this exemption for newly hired, eligible employees with our Downloadable Form W-11.
For more information about the HIRE ACT, check out our HIRE Act FAQs.
Firing - Another short-term COBRA subsidy extension is in effect
In a now-familiar move with the COBRA subsidy, President Obama pushed out the eligibility date again. The bill extends the 15-month, 65% federal premium subsidy to employees laid off from April 1 through May 31, 2010. (The previous extension expired March 31.)
At the same time, President Obama urged lawmakers to pass legislation that would extend the COBRA premium subsidy to eligible individuals through the end of the year. While the Senate has cleared such a measure (Tax Extender Act of 2009), the House has not yet acted on it.
Inform employees of their COBRA rights with our Downloadable ComplyRight™ Initial Notification.