Tax Credit And Advantages For Hiring Felons

Employers often turn up their noses as soon as they hear that a job candidate is a convicted felon. Since a majority of companies refuse to hire felons at all, it can be almost impossible for a felon to land a decent job.

Studies have shown that only about 12.5% of employers would definitely be willing to hire a felon. Most employers ask job screening questions that ask pointed questions about criminal background. Since there is no honest way to bypass these kinds of screening, many felons will not get hired.

Employers may think that they have good reasons for not hiring felons. But they are most likely unaware of the advantages that come along giving a felon a chance to work.

Felons need a second chance, and employers need hard working employees. Employers need to learn about the advantages that come along with hiring felons to develop a win-win situation.

Tax Credit For Hiring  A Felon

There is understandable hesitation that comes along with hiring former inmates. There are also a lot of opportunities for companies that are willing to take that leap and hire a felon.

There are many advantages to hiring felons. For example: tax breaks. It is hard not to look at the taxes employers have to pay at the end of each fiscal year with wide eyed disbelief. Wouldn’t it be nice to know if there were other ways that employers could catch a break on their taxes? Everyone loves tax breaks, and hiring a felon will give you that.

The Work Opportunity Tax Credit (WOTC) is one of the most popular tax credit programs. This program is for those who are willing to hire people who have difficulty finding jobs.

If an employer hires a felon, then the U.S. Department of Labor will provide them with tax cuts. This WOTC program also includes others that face barriers when applying to jobs. This includes veterans and the long-term unemployed.

The only stipulation is that the employer has to hire the felon within one year of their release. After the one year mark, the ex-convict no longer qualifies. This program provides a way to cut the risk for potential employers. The government absorbs the risk.

There is no limit to the number of felons that one company can hire. Employers can receive anywhere from $1,200 to $9,600 per employee. Employers can also claim tax credits for up to 40% of a felon’s wages in their first year of employment.

The second year employers can claim 25%, depending on the number of hours clocked. The first year, the employee has to clock at least 400 hours. The second year they have to clock at least 120 hours.

The process for obtaining this tax credit is quite simple. Employers have to submit paperwork to the U.S. Department of Labor within 28 days of hiring a felon. Then, wait for the state workforce agency to process the paperwork. The tax cut is then applied as a business expense. This is an excellent way for employers to cut expenses throughout the year.

The Federal Bonding Program

Like the WOTC, the Federal Union established the Federal Bonding Program in 1966. This program provides Fidelity Bonds to employers for hiring people that could be a risk. These funds provide access for felons to gain employment positions. These bonds provide a company with no risk.

Employers receive these Fidelity Bonds to hire felons and other at risk applicants. Each bond covers the first 6 months of a felon’s employment with a $5,000 limit and a $0 deductible. Employers are able give felons a chance in return for risk-free work.

Employers can apply these bonds to any job. They can be anything from a dishwasher at a restaurant to a financial advisor. They are valid in any state, so there is no state research needed. This program covers all employees should they commit dishonesty at or away from home. This means that the employer is always covered. Even if something happens off of work grounds.

The bonds are applicable toward and part- or full-time employees. They are even applicable to sub-contractors. This bond requires no application from the job seeker. There is no paperwork for the employer to bother with, and no age rules other than the legal U.S. work age. Employers can find more information in regards to this bond here.

Work Ethic

A typical entry-level civilian employee can be prone to clock-watching. They may do as little as possible to earn a paycheck, and often requires extensive training. They may have as little as a high school degree or a GED, and they may have little life experience. This all can cost employers a lot more than they may think.

Employers may think that they are making a safe hire, but even civilians come with risks. Often times, felons may have positive traits they gained while incarcerated that civilians don’t have. These traits may include self-discipline, organization, punctuation and respect for authority.

One of the most often overlooked advantages to hiring a felon is their work ethic. An ex-convict will most likely be trying their hardest to land a job. When felons have a chance, they are often willing to work hard at any task to maintain their job. They are also very grateful to employers for their job since so few are willing to consider them as candidates.

They want to make their way back into society, often after being gone for years. Their first job is their chance to begin to put their lives back together. These individuals can be a big asset to any company.

This means that felons and ex-convicts are usually very reliable. They are also loyal workers that understand the importance of a good job. They are not likely to take work for granted, and are almost always willing to work from the bottom up. Besides these advantages, ex-convicts are eager to learn. They are willing to work their way up the chain of command by putting in the necessary hard work to achieve it.

Most inmates receive education and workforce training while incarcerated. These courses are to make felons better candidates for jobs once they are back home. Felons are able to come home with more education and training than when they left.

Felons often have an advantage over civilian applicants. They’re released with workforce training and even specific trade experience. By the time they are ready to apply for jobs again, they are ahead of the game.

Your Company Doesn’t Hire Felons?

A lot of employers may believe that no felon is a good fit for their organization. Yet, law states that employers consider each case before making a decision. Bias because of criminal background has been against the law since the Civil Acts Right of 1964. So, you can’t refuse to hire someone because they have a felony on their record.

Instead of avoiding felons, it’s time to learn how to look at their job applications. Employers need to learn more about candidates than their criminal record:

Not all felonies are equal. Your candidate may have got themselves caught up in the wrong crowd. Felonies range from public drunkenness to rape. Employers can’t ask questions about criminal background unless it has to do with the job. But there are questions that employers can ask to clear up the air about criminal history. This means that employers can hire felons. At the same time, they can provide second chances to those that would not pose significant risk.

Often times, ex-convicts are still on probation. This means that they are in therapy or counseling. Those who are on probation also have others who hold them accountable in other areas of their lives. Often times, having a job is a part of their probationary status. This means that felons are very interested in working hard at their jobs. Not only for their paychecks, but also to help gain their complete freedom.

There can be some stigma surrounding felons. It is the responsibility of employers to work around this stigma. Felons come along with great advantages. These include tax cuts which provide companies with ways to cut expenses. Along with less expense comes more revenue. Felons also provide work ethic and loyalty that is hard to pass up. Next time a felon’s application crosses your desk, give it a chance. You may have encountered your next best employee.