According to a News Release by the Department of Labor dated September 17th, new Unemployment Rates still remain very high with states reporting that 860,000 workers filed New applications for Unemployment claims. This was a reduction from the previous week (893,000), and lower than the rolling 4-week average, but this is still over 4 times higer than pre-pandemic levels of unemployment benefits. Pre-pandemic levels of new unemployment claims per week averaged at approximately 200,000.
The total number of people claiming unemployment benefits for the week ending August 29th was over almost 30 million people, which is over 20 times higher than the comparable week in 2019.
This means that an employer who is hiring will be interviewing and selecting from a pool of candidates that includes people who have been unemployed at a much higher rate than at almost any other point in history. Since the WOTC program offers benefits to Employers who hire individuals claiming Unemployment benefits, it is especially important now more than ever to have a system in place to capture the credits that you are owed. These historic unemployment rates could raise the percentage of qualifying applicants by as much as 5-7%, giving the business owner unprecedented access to these credits, and that’s only the start of it.
Unemployment is the lynchpin to other qualifying circumstances for tax credits, including:
- As household incomes decrease due to lack of employment or a smaller income resulting from Unemployment benefits vs salary, more households will invariably rely on Supplemental Nutritional Assistance or SNAP benefits (another category of WOTC).
- Many states have adjusted their work and activity policy requirements for Temporary Aid for Needy Families to meet the unique situations of their states in response to the pandemic making it harder for individuals receiving benefits to meet the work/activity requirements. This allows more people to remain on TANF benefits for longer periods of time, increasing the opportunity again for WOTC.
The global pandemic has had a multitude of effects, and has thrown into sharp relief the importance of using every tool available to ensure one’s liquidity. By capitalizing on programs in place to provide relief to business owners while at the same time providing employment incentives to hire those who are hardest hit, you can ease the negative effects of the pandemic on your business and community. If you have a system in place to capture these credits you’re ahead of the curve.
Getting a system in place is, thanks to companies like EI, very simple. Don’t wait until you’ve already missed out on credits to get started.