Financial Incentives for Hiring Justice-Impacted

Many employers may be open to the idea of hiring justice-impacted individuals, but historically this population has been overlooked. To increase equity requires employers to expand their talent pool to include people with criminal records. Willingness to hire people with criminal records not only expands the recruitment market, but could also earn an additional $1,200 to $9,600 for their company. In addition, federal bonding provides no-cost fidelity bonding for six months to businesses that hire hard-to-place job seekers.

Work Opportunity Tax Credit

Financial incentives exist for hiring candidates from this population. For example, the Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers who hire individuals from specific targeted groups that have consistently faced significant employment barriers. The maximum tax credit for each new hire is $2,400. Among these targeted groups are people with criminal records who are defined as individuals hired within a year of being convicted of a felony or being released from prison from the felony.

To verify whether a job applicant is a first-time, qualifying member, employers are required to submit IRS Form 8850 together with ETA Form 9061 or ETA Form 9062 to the state workforce agencies in which the employer’s business is located (where the employee works) within 28 calendar days after the new hire’s start date. 

Here are four simple steps to file a certification request for the WOTC:

1. File a written request for the Work Opportunity Credit using IRS Form 8850.

2. Complete the Conditional Certification ETA Form 9061.

3. Send the completed IRS Form 8850 and ETA Form 9061 to your state workforce agency.
    
4. File form 5884 after the qualified employee works a minimum of 120 hours in their first year of employment for the work opportunity tax credit.

Federal Bonding Program

The mission of the Federal Bonding Program is to give you the peace of mind that you can safely provide job opportunities to justice-impacted individuals with limited risk. A fidelity bond is a business insurance policy that protects employers against any loss of money or property resulting from employee fraud. By participating in this program, your business is eligible for six months of a free fidelity bond insurance policy for up to $25,000, which covers theft by employees with a criminal record.

As an employer, you do not need to fill out any paperwork. Once the applicant has a start date, you can be issued the bond immediately. For more information or to apply for the bonding program, contact the nearest Local Bonding Coordinator.

Developing a diverse and capable workforce is important for all businesses. It is also essential to expand the talent pool and consider implementing hiring strategies that include people with criminal records. These financial incentives are just a few of the benefits you can reap by hiring qualified applicants with criminal records.