Learn why some businesses leave WOTC money on the table due to fear
The Work Opportunity Tax Credit (WOTC) has received bi-partisan support in Washington for nearly thirty years due to its success as a win-win-win program, which means it offers significant benefits for the government, businesses, and disadvantaged job-seekers alike.
Despite this, some business owners or decision makers are hesitant to fully leverage WOTC to its intended purpose out of fear of violating fair hiring and/or anti-discrimination laws.
We understand that the consequences of these violations can be costly, and possibly too much for some businesses to absorb.
However, we are tax experts who specialize in WOTC. We’ve helped hundreds of businesses claim nearly $700 million in employment tax credits, including WOTC. It is safe to trust our advice when we recommend using WOTC to its full advantage by strategically hiring WOTC-eligible employees.
After all, doing so does not violate anti-discrimination laws or fair hiring practices, and it can result in transformative profits for your business.
WOTC hiring is safe by design
Section 2000e-2(a), Title VII of the Civil Rights Act of 1964, as later amended by the Civil Rights Act of 1991 and the Lily Ledbetter Fair Pay Act of 2009, says that no employer may fail or refuse to hire based on race, color, religion, sex, and national origin.
WOTC was created by the Small Business Job Protection Act of 1996 (P.L. 104-188)–Act of 1996. It is designed to incentivize employers to hire from certain target groups who face disadvantages in finding and retaining work.
Although it is understandable–even commendable–that an employer would exercise caution when making hiring decisions in order to avoid discriminatory practices, using a WOTC eligibility survey to identify qualified applicants is not only compliant with anti-discrimination laws, it is required by the federal law that sustains the program. IRS Form 8850 serves as the basis for our optimized, intuitive WOTC survey. The questions on the form were designed by the federal government in order to steer clear of identifying an applicant’s race, color, religion, sex, and/or national origin. Rather, its purpose is to encourage employers to hire members of WOTC target groups, regardless of their identity traits.
Of course, there are other laws prohibiting discrimination in hiring practices, such as the Americans with Disabilities Act, the Age Discrimination in Employment Act, and more. Do not be afraid to use Form 8850 and/or our WOTC survey to make hiring decisions because of these laws. The US Equal Employment Opportunity Commission (EEOC), which is the federal government body charged with enforcing anti-discrimination laws, has repeatedly published guidance, including this recent letter, reiterating the lawfulness of WOTC.
Employers who hire from WOTC target groups help build strong communities
If you’re hesitant to take full advantage of WOTC due to fear of breaking laws, you are likely a conscientious person who is eager to do the right thing. While it is true that hiring decisions always involves favoring certain individuals over others, hiring a member of a WOTC target group is not only lawful, but also beneficial to communities in a real way.
That’s because hiring and retaining WOTC-eligible employees benefits communities by increasing vulnerable families’ incomes, which leads to better outcomes in terms of health, safety, and economic growth. Finding and keeping employment has been shown to give all individuals a sense of purpose and self-worth. This is especially true of WOTC-eligible workers, since they face significant barriers to securing employment.
Our clients have nothing to worry about
Making hiring decisions for WOTC purposes is lawful. However, that doesn’t mean that it is impossible to violate anti-discrimination or other laws while participating in the program. Although it is possible to claim WOTC on your own, we advise careful consultation with tax experts like our own whenever making strategic business tax decisions.
We have helped hundreds of businesses, big and small, navigate the impactful but complicated world of employment tax credits. You can trust us to secure the most advantageous tax position possible for your business without worrying about legal compliance.
Contact us to begin today.