Two workforce incentive programs managed by the North Carolina Department of Commerce reached higher benchmarks last year, indicating more people found jobs thanks to the financial support these programs provide to North Carolina employers.
The Department’s Workforce Solutions division increased the number of Work Opportunity Tax Credit (WOTC) certifications issued to nearly 80,000, while its Federal Bonding program more than doubled the number of bonds it handled in 2019 versus the previous year. Both programs serve as incentives for companies to hire people with significant barriers to employment.
“During a period of low unemployment, it’s particularly important that we bring more North Carolinians into the workforce who have faced challenges,” said N.C. Commerce Secretary Anthony Copeland. “This year, we will be encouraging even more employers to use Federal Bonding and the Work Opportunity Tax Credit to support hiring these jobseekers, contributing to the success of their businesses and that of their communities.”
The Federal Bonding program provides free individual fidelity bonds to employers when they hire people who traditionally have had difficulty finding meaningful employment. Employers receive $5,000 in coverage for the first six months of employment, and the bond must be established prior to the first day of work. The coverage protects the employer from acts of dishonesty such as theft, larceny or embezzlement.
Among those workers who may be eligible for Federal Bonding are individuals with a history of arrest or conviction, individuals with a history of substance abuse, or individuals lacking sufficient work history. The Division of Workforce Solutions (DWS) processes these bonds for North Carolina employers. In 2019, the agency processed 102 bonds, compared to 50 in 2018.
The WOTC is a federal tax credit available to employers who hire qualified individuals from eligible target groups. In North Carolina, DWS administers WOTC and determines eligibility for the target groups.
According to the newly released data, DWS awarded certifications to 2,731 North Carolina employers for 79,443 new employees in the 2019 calendar year. That represented an almost 5 percent increase in the number of certifications compared to the 2018 calendar year. Those certifications allowed employers to potentially claim up to $197,942,800 in tax credits – which was likewise an increase of 5 percent, or about $9.5 million, over 2018.
After receiving a certification from DWS, employers may then apply for the tax credit with the Internal Revenue Service (IRS). A business can claim from $1,200 to $9,600 for each eligible employee, depending upon the target group of the person hired, the wages paid to that worker in the first year of employment, and the number of hours worked.
Among those who may qualify for the WOTC are certain veterans, recipients of public assistance, people with felony convictions, people with disabilities, and the long-term unemployed. Only new hires are eligible.
For more information about either Federal Bonding or the WOTC, employers should visit nccommerce.com or contact a local NCWorks Career Center.