For questions or to learn more: Alyshia Foster 214-461-1129 or alyshia.foster@staffone.com

The HIRE Act mmediately enhances employers’ cash flow by allowing employers to retain the employer portion of Social Security Tax. Read on as to be sure that you don’ t miss this opportunity as an employer to receive increased tax credits and payroll tax exemption.

With the recent passage of the Patient Protection & Affordable Care Act (H.R. 3590) and the Health Care & Education Affordability Reconciliation Act of 2010 (H.R. 4872), some employers may already be planning to limit growth as to not be affected by certain mandates of the new legislation. To comfort the fretting business owner, some alleviation has been signed into legislation in the form of tax credits.

On March 19, President Obama signed into legislation the Hiring Incentives to Restore Employment (HIRE) Act that creates a tax credit for the hiring of new employees. The law includes a payroll tax exemption and increased tax credits for employers that meet certain eligibility requirements. Under this new law, an employer that hires an employee after February 3, 2010 and before January 1, 2011, can receive a tax credit equal to the employer’s portion of the Social Security Tax. All employers, excluding government employers, are eligible to receive the credit. Public Institutions of higher education are the only government institutions that qualify for the tax credit.

To qualify for the 6.2% Employer Social Security Tax exemption under this legislation, an employer must hire an employee who has not been working for 40 hours per week for the past 60 days and whose 2010 earned wages after March 18, 2010 and before January 1, 2011 do not exceed $106,800. The exemption has no limit as to the total amount of benefits that can be claimed by an employer. An employer can save up to $6,622 per qualifying working no matter how many employees are hired.

In consideration of tax credits, employers will receive the lesser of $1000 or 6.2% of wages paid to the qualifying work. In order to qualify, an employee must have been hired after the initial start date (February 3) and remained on payroll for 52 consecutive weeks. Wages for the last 26 weeks of the period may not drop below 80% of the wages paid the first 26 weeks. Each eligible employee is expected to verify status per signed affidavit, under penalties of perjury, he or she has “not been employed for more than 40 hours during the 60-day period ending on the date such individual begins such employment.”

The legislation also encourages employers to hire sooner rather than later as the tax benefit will be greater. Neither the 6.2% Employer Social Security Tax exemption nor the retention tax credit is permitted if a person is hired to replace another employee, “unless such other employee is separated from employment voluntarily of for cause.” Additional benefits in the new legislation include: an allowance for small businesses to expense up to $250,000 of their taxable income through the end of 2010, an expansion for the eligibility of “Build America Bonds,” and it extends surface transportation policy through December, providing $19.5 billion for road construction and other infrastructure projects under the Highway Trust Fund.

Alexandria, Va. (March 12, 2010) — Wisconsin’s small business owners and other small employers who have come to depend on the outsourced employment solutions of professional employer organizations (PEOs) for payroll, benefits, risk management and human resources are guaranteed tax credits and other economic incentives remain with them under passage of Senate Bill 504 this session.

The bill was unanimously passed by both the Senate and Assembly and updates the provisions of Wisconsin Act 189, which established the original regulatory framework for PEOs. The PEO market has grown substantially since passage of the statute in Wisconsin in 2007. The average PEO serves approximately 200 business clients and 4,000 workers.

“PEOs assume a wide variety of significant employer responsibilities for these small employers, including the delivery of risk management services, said Michael Gotzler of Madison headquartered QTI Human Resources Inc. “They also pay the wages of worksite employees, manage payroll tax payments and compliance, improve compliance with federal and state labor regulations, share human resource management best practices and sponsor many employee benefit programs including health care and retirement savings plans. Ironically it is this shared or co-employment arrangement that lead to the need to clarify that tax credits and economic benefits offered by local government belong to the client and not the PEO.”

Melinda Heinritz, executive director of the Wisconsin Historical Foundation and long-time PEO client of QTI Human Resources, explained, “We rely heavily on the services and expertise of QTI to help us effectively navigate all aspects of human resources management. Doing so allows the Foundation to focus time and energy on fulfilling our mission and executing our core competencies in marketing, membership and fundraising on behalf of the Wisconsin Historical Society.”

Gotzler worked with the PEO industry’s trade association, the National Association of Professional Employer Organizations (NAPEO) and the Department of Regulation and Licensing to ensure the original intent of the act provided a layer of safeguards and oversight for small business owners and their employers in PEO outsourcing arrangement. Under the original law, PEOs were wrongly classified as temporary help agencies leading to some of the administrative confusion.

As in 34 other states, PEOs in Wisconsin are required to maintain minimum financial standards, file annual audited financial statements, and register with the Department of Regulation and Licensing.

NAPEO says the concept of regulating PEOs is not a new one. The provisions contained in this bill are based on model legislation. “Over the past 25 years, these standards and requirements have been tested and refined to strike the balance of the need for responsible regulation,” said Milan Yager, president and CEO of NAPEO. NAPEO represents the $68 billion industry, which has experienced double digit growth for the past five years.

The bill was sponsored by Senator Bob Wirch and led through the Assembly by Representative Steve Hilgenberg, who introduced companion legislation Assembly Bill 716.

About NAPEO

As the recognized Voice of the PEO Industry,® NAPEO represents nearly 400 professional employer organizations (PEOs). The PEO industry has matured to $68 billion with double digit growth annually since 2004. As NAPEO enters its 25th year, the potential market remains promising with high client retention rates, a projected increase in revenues for 2010, and the current untapped market now serving 300,000 business owners and 2 to 3 million workers. PEOs allow clients to “reduce costs and free up time to devote to revenue generating activities, improvements that can be instrumental to gaining competitive advantage,” according to research by the Society of Human Resource Management Foundation. To learn more about how PEOs contribute to small businesses’ success, visit the NAPEO Web site at www.napeo.org.

About Staff One

Founded in 1988, Staff One is a leader in the Human Resources
Outsourcing industry with an ESAC accredited and bonded PEO service
offering. The Company is a preferred provider of outsourced human resources
management services that include, benefits and payroll administration,
health and workers compensation insurance programs, personnel records
management, employer liability management, employee performance management
and employee training and development services to small and medium-sized
businesses. Staff One is headquartered in Durant, Okla., with offices
in Dallas, Little Rock, Ark., Nashville, Tenn., and Tulsa, Okla. For
more information, visit www.staffone.com.