President Barack Obama this week signed into law the $17.5 billion Hiring Incentives to Restore Employment (HIRE) Act which encourages companies to hire unemployed workers by exempting certain wages from Social Security taxes and by providing employers with a tax credit if new hires are retained for at least 52 consecutive weeks. This legislation impacts companies of all sizes.

Specifically, an employer would be exempt from paying its share of 2010 Social Security taxes on any new hire who has been without full-time employment for at least 60 days. The maximum tax break an employer could gain per employee under this provision would be $6,621, or 6.2 percent of total wages paid in 2010 up to the $106,800 FICA wage cap.

Sage is acting swiftly and is fully committed to helping our Sage Abra clients navigate these changes. We are currently working on implementing changes to our product offerings to help organizations comply with the HIRE Act and will reflect the legislative changes in an upcoming release.

The HIRE Act offers an opportunity to demonstrate our leadership and commitment to our customers. You will receive more specifics on the schedule and changes to the software within the next coming weeks.

1. begins work for a qualified employer after Feb. 3, 2010 and before Jan. 1, 2011;
2. certifies by signed affidavit (under penalties of perjury) that he was employed for a total of 40 hours or less during the 60-day period ending on the date the employment begins;
3. is not employed to replace another employee of the employer unless that former employee separated from employment voluntarily, or for cause; and
4. is not related to the employer (under rules similar to those in IRC §51(i).