Facing a stubborn 9.1 percent unemployment rate, President Obama announced his “American Jobs Act of 2011” during an address to a joint session of Congress on Thursday, Sept. 8.
The proposal includes a combination of tax rate changes and spending projects, but also features several provisions that would affect the HR profession. The employment-related provisions include:
- Prohibits discrimination against unemployed. The bill would bar an employer from refusing to consider or hire someone because he or she is unemployed. It would also be unlawful to suggest that sort of discrimination in any job advertisement.
- Bridge to Work program. Purporting to be based on the “Georgia Works” program, this would allow employers to give eight-week trial employment to people receiving emergency unemployment compensation. The program would be voluntary for employers and unemployed workers who have exhausted their state unemployment benefits.
- Temporary payroll tax cuts. One provision would halve (from 6.2 percent to 3.1) the payroll tax paid by private and tax-exempt employers, based on up to $5 million in wages. Another would cut the payroll tax paid by employees in 2011, reducing it from the current 4.2 percent to 3.1.
- Payroll tax holiday for new hires. This would give employers a complete holiday on the social security taxes paid for increased wages, up to $50 million of an employer’s increased wages.
- Long-term unemployed Work Opportunity Tax Credit. This section would make employers eligible for a maximum tax credit of $4,000 if they hire individuals who have been unemployed for at least 6 months.
- Wounded Warriors tax credit. This provision would double, from $4,800 to $9,600, the maximum tax credit available to employers that hire veterans unemployed for at least six months and who have a service-connected disability
Many provisions of the President's proposal will likely meet significant resistance from members of both parties. For instance, many liberals and conservatives have announced opposition to the payroll tax cut because of its negative effect on Social Security funding.
Senate leaders are planning a possible floor vote on the jobs creation bill in October, and House consideration is also expected in the next few weeks.
You can read the White House’s description of the full American Jobs Act HERE