Under the Hiring Incentives to Restore Employment Act (HIRE Act), employers who hire certain unemployed workers are exempt from certain employment taxes. In order to qualify under the HIRE Act, the wages must be paid by a qualified employer “with respect to employment” in the period beginning March 19, 2010 and ending December 31, 2010. The Internal Revenue Service (IRS) has provided employers further information on the HIRE Act.
Under the HIRE Act, employees who are hired to replace other employees are generally not eligible to be qualified employees. One exception to this rule is for employees hired to replace other employees who terminated employment voluntarily. If they otherwise meet the qualification standards, such employees are qualified employees under the HIRE Act.
Employers should review employees who were hired to replace employees who terminated voluntarily to see if they otherwise qualify and are therefore eligible under the HIRE Act.