Learn how elite WOTC claimants maximize their profitability
The Work Opportunity Tax Credit (WOTC) offers huge tax benefits to employers who hire and retain disadvantaged job-seekers.
To get a sense of the scale of these benefits, consider that in April 2024, the US Bureau of Labor Statistics reported 5.6 million new hires. In our experience, about 20% of new hires across industries are eligible for WOTC. That means that 1.12 million new, WOTC-eligible employees were added to the US workforce last month alone. The average WOTC credit amount is $2,150 per employee. That means that in April of 2024, the federal government made available around $2.4 billion in potential tax breaks for businesses.
Of course, the bulk of that money will go unclaimed. Some smart companies, however, will fulfill the requirements for WOTC and supercharge their profitability as a result. The cream of the crop when it comes to WOTC are able to increase their annual cash flow by 40-60%. If you want to join these elite ranks, read on to learn the four things companies with elite WOTC programs always do.
1. Achieve high screening rates
Elite WOTC earners make sure they always screen applicants for open positions at the highest rates possible.
One requirement of WOTC not everyone understands is you must determine eligibility for your WOTC candidate before or on the day on which you extend a job offer. In order to comply with this requirement, it’s important to have effective screening tools in place before opening your application window.
Further complicating this task is the fact that WOTC screening requires the sharing of personal information that applicants may not be willing to voluntarily or truthfully disclose. In order to be effective in this regard, your screening tools must be simple, intuitive, responsive, and inviting.
Companies with “good” screening tools achieve screening rates higher than 50%. Companies with elite WOTC programs, on the other hand, screen applicants at rates higher than 95%.
2. Gain certification at high rates
In order to claim the WOTC, you must gain certification for each eligible employee with your local state workforce agency. Gaining certification involves submitting the required forms and all follow-up requests for documentation by the mandatory deadlines.
Learning to effectively locate, submit, and manage communication about all required paperwork involves a learning curve, and can be time consuming. That’s why there is a large degree of variability between companies with low-performing WOTC programs and those with elite ones.
Due to various complications and unforeseen difficulties, some companies are happy with a WOTC certification rate of around 30%. In fact, after considering that the total certification rate in 2023 across all state workforce agencies was only 25%, it may even be reasonable to be pleased with 30%.
Elite WOTC claimants, however, don’t settle for the average. Through persistence, organization, and prompt communication, top WOTC companies gain certification at rates of no less than 50%.
3. Retain WOTC employees
The WOTC is designed to not only reward employers for hiring disadvantaged job-seekers, but also for retaining them. For that reason, the program includes two important hours-worked milestones that anybody who claims the WOTC ought to know.
First, WOTC-certified employees don’t generate any credit for their employers until they work at least 120 hours.
Second, once they work 400 hours, they earn the highest available rates of credit.
That’s why companies with the best WOTC programs make sure to retain their eligible employees as much as possible. Doing this effectively includes building a strong and supportive workplace culture in which WOTC employees understand that they are valued, as well as creating scheduling policies that ensure eligible employees reach hours milestones.
Elite WOTC claimants retain their eligible employees greater than 75% of the time.
4. Work with Arvo
Helping businesses maximize their WOTC programs is our specialty. We can transform any WOTC program into an elite profit-generating system thanks to our:
- Industry-leading WOTC screening tools
- Dedicated State Workforce Agency team
- Ongoing and customized support for optimization
Over the last decade-plus, we’ve helped hundreds of businesses of all sizes transform their profitability through the WOTC. To find out what we can do for you–or to request a complimentary audit of your current WOTC processes–contact us today.