Mar 4, 2009

Hiring Reentrants is Good for Business

As any reentrant will tell you, it can be really hard to get a job right out of prison. Obviously, the stigma of a criminal record can be a huge obstacle, in part because employers are not always well-informed about hiring laws. Organizations like the National HIRE Network have done a lot of good work to address this issue and there is still work to be done.

In Upper Manhattan, even in the current economic context, there are jobs to be had -- and reentrants with desireable skills to fill those jobs. One of our goals moving forward is to expand employment opportunities for reentrants uptown, in part by helping business understand how they could benefit from hiring pools that include qualified candidates with a criminal record.

Two little-known incentives for hiring people with criminal records are federal bonding programs and work opportunity tax credits. This post will briefly describe what these incentives are and point the way toward more resources.

What is federal bonding? (From this website)

  • Insurance to protect employer against employee dishonesty

  • Covers any type of stealing: theft, forgery, larceny, and embezzlement

  • In effect, a guarantee of worker job honesty

  • An incentive to the employer to hire an at-risk job applicant

  • A unique tool for marketing applicants to employers

  • DOES NOT cover ‘liability” due to poor workmanship, job injuries, work accidents, etc.

  • Is NOT a bail bond or court bond needed in adjudication

  • Is NOT a bond needed for self-employment (contract bond, license bond or performance bond)

The bonds issued by the Federal Bonding Program serve as a job placement tool by guaranteeing to the employer the job honesty of at-risk job seekers. Employers receive the bonds free-of-charge as an incentive to hire hard-to-place job applicants as wage earners. Federal bonds apply to individuals with criminal histories and other high-risk job applicants who are qualified, but fail to get jobs because regular commercial bonding is denied due to their backgrounds.

For those readers in New York State, click here for info on how to contact the state federal bonding representative. Readers from other states can find their state bonding coordinators here.

What is the Work Opportunity Tax Credit (WOTC)?

The Work Opportunity Tax Credit (WOTC) is a federal tax credit to reduce the federal tax liability of private for-profit employers to be used as an incentive for employers to hire individuals from eight different targeted groups: TANF recipients, veterans, ex-felons, high risk youth, summer youth, Food Stamp recipients, SSI recipients, and vocational rehabilitation referrals.

The consolidated WOTC for hiring most target group members can now be as much as:

  • $2,400 for each new adult hire;

  • $1,200 for each new summer youth hire,

  • $4,800 for each new disabled veteran hire, and

  • $9,000 for each new long-term family assistance recipient hired over a two-year period.

In terms of criminal records: an individual who has been convicted of a felony and has a hiring date which is not more than one year after the last date on which he was so convicted or released from prison is eligible for consideration in target groups.

For more information on tax credits, see this directory of state WOTC coordinators.