Have you considered the value of hiring the formerly incarcerated? The Work Opportunity Tax Credit (WOTC) might reward your business if you do (more about that later).
And yes, when I say, “formerly incarcerated”, I mean ex-felons. People who’ve been convicted of a felony and paid the price. Many of them have emerged from that difficult experience with a new and improved perspective on their lives.
Numerous major employers make a point of hiring offenders after their release from custody. The following list contains just a few that have gone very public with their pledge. Recognize any?
A Short List of Major Companies Pledged to Hire Ex-felons:
- American Airlines
- Ben & Jerry’s
- Best Buy
- CVS Health
- Johns Hopkins Medical Center
- Kellogg Company
It’s called the Fair Chance Pledge and it involves a commitment to evaluate former offenders based on their current skills and reformed character. Hundreds of other employers have also formally made the pledge. Add to them thousands more, who without any formal pledge, simply recognize the unique contribution a truly reformed offender can offer.
My Personal Experience. As a volunteer at a local county jail for almost a decade, I became personally acquainted with many incarcerated people. While some were hardened criminals, many more were mothers, fathers, sons and daughters who recognized that they had made big mistakes and needed a chance to renew their lives.
Here are just a few reasons why it can be advantageous for you to offer that chance to them:
Prison Job Training. The Federal Bureau of Prisons has long recognized that education is an important correctional management tool that helps inmates to make good use of their time. As a result, every federal prison facility has a department offering education to inmates. Similar programs serve inmates in state prisons.
While programs vary greatly state-by-state, a tremendous number of inmates do take advantage of the educational, vocational and other training offered to them. This training creates skills that will be transferable to your business and across similar fields.
Loyalty. Employment creates one of the greatest challenges faced by individuals leaving incarceration, especially if they’re on parole. Maintaining a job is usually a condition of parole. Employees in this situation often reward their employer with a unique loyalty and appreciation.
Turn Over. Employee turnover creates a heavy burden in many industries. Individuals with a criminal record, however, generally have a more difficult time finding new employment. Consequently, they are also less likely to leave a job for trivial reasons.
Many formerly incarcerated individuals are truly putting the past and their previous bad behavior behind them. They are making a very personal and concerted effort to demonstrate who they are today and what they can offer to employers. With that in mind, hiring them can be a win for both your business and the employee.
WOTC Tax Credits. I promised I would get back to this topic!
A business that hires an ex-felon can receive up to $2,400 in federal income tax credit for each qualifying hire. The hire must take place within 1 year of the conviction date – or within 1 year of the date a person was released from incarceration after their conviction on a felony charge.
But don’t forget! ex-felons are not the only WOTC target group. There are 14 different ways a new employee can qualify your company for a federal income tax credit under the WOTC Program.
While I can’t explore all of these in this post, I can say this with confidence. For most employers, at least 10% to 20% of their existing hires would qualify. They simply need to collect the right information and process the paperwork correctly.
The amount of tax credit ranges from $2,400 to $9,600 per qualifying hire, depending on why they’re eligible. There is no limit to how many WOTC qualifying employees you can hire.
If you’re company is not using WOTC, you are probably overpaying your taxes.