Other Types of Employment

Hello and welcome to: other types of employment!   A short segment on three innovative ways to cut costs and maybe even help other people in the process.  Today we have several guests with us: Francine, the intern guru; Mark the independent contractor (I'll deal with how much your getting paid afterwards); and William the disabilities expert.  Now we first discuss internships.

Well, the National Society for Experiential Education defines an internship as "a carefully monitored work or volunteer experience in which an individual has intentional learning goals and reflects actively on what he or she is learning throughout the experience." 

Are there any set requirements for designing an internship?

Yes, actually, as a matter of fact, there are!
The U.S. Department of Labor has come up with six criteria for identifying a learner/trainee who may be unpaid.  The criteria are:

1. The training, even though it includes actual operation of the employer's facilities, is similar to training that would be given in a vocational school.
2. The training is for the benefit of the student.
3. The student does not displace regular employees, but works under the close observation of a regular employee.
4. The employer provides the training and derives no immediate advantage from the activities of the student. Occasionally, the operations may actually be impeded by the training.
5. The student is not necessarily entitled to a job at the conclusion of the training period.
6. The employer and the student understand that the student is not entitled to wages for the time spent training.

Thank you for that information we now turn to Mark for the low down on independent contractors.

Thank you very much, independent contractors are individuals who are in business for themselves and hire out their labor to clients. Often, business owners prefer to hire independent contractors rather than maintain employees because of the contractor's unique advantages. By hiring an independent contractor, the small business owner does not have to pay the employer's portion of the Social Security tax, unemployment taxes, workers' compensation insurance premiums, or employee benefits - thereby saving 30% or more in employee costs.
Employers are cautioned to be extremely careful not to misclassify a worker as an independent contractor. Such misclassification can lead to the employer being held responsible for uncollected income taxes, Social Security taxes, unemployment taxes, and penalties for not having adequate workers' compensation coverage.

Um, thank you Mark.  Well, our last guest today will speak to you about possibly the most under utilized tool in the box of employment tricks, William, it's all you.

The Employment of People with disabilities is an interesting option to think about when designing employment strategies for your business.

There are Incentives for small- and medium-sized businesses that make tapping into the disability community an attractive recruiting strategy. There are three tax incentives — small business tax credit, architectural and transportation tax deduction, and work opportunity tax credit — available to help employers cover costs for employees or customers with disabilities and make their business accessible to all.

What Is the Work Opportunity Tax Credit

Oh, It provides a tax credit for employers hiring individuals from certain targeted groups, including low-income individuals, vocational rehabilitation referrals, former Aid to Families with Dependent Children recipients, veterans, ex-felons, food stamp recipients, summer youth employees and Supplemental Security Income (SSI) recipients. The total amount of WOTC taken by all industries in 1996 on corporate income tax returns totaled $6.9 million

Thank you, thank you and that is all for today.  Next time we will be discussing the advantages to organic farming.  As always, you can go to our website, other realm .org for more information and a copy of today's transcript.  See you later.

How Does WOTC Apply to People with Disabilities?

An employer who hires an employee receiving Supplemental Security Income or who is a certified vocational rehabilitation participant may claim the WOTC after certification is received from the State Employment Security Agency (SESA).

What Is the Amount?

An employer may take a tax credit up to 40 percent of the first $6,000 in first-year wages per qualifying employee. The maximum per employee credit is $2,400 in a given tax year. This credit applies only to
employees who work at least 400 hours during the tax year. With respect to qualified summer youth employees, the maximum credit for each is $1,200 (40 percent of the first $3,000 of first-year wages).

What are the Minimum Employment Requirements?

The employer may claim a partial credit of 25 percent for certified employees who worked at least 120 hours, but fewer than 400 hours, during a one-year period. No credit is available for employees who work
fewer than 120 hours.

How Do I Claim the Credit?

Complete and submit IRS Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity and Welfare-to-Work Credits, to your local SESA. Do not submit this form to the IRS.

How Does WOTC Work?

The following steps must be followed:

1.         The employer determines likely eligibility by including the WOTC Pre-Screening Notice as part of the application process.

2.         On or before the day employment is offered, the Pre-Screening Notice must be signed by the employer and employee and mailed to the SESA within 21 days after the employee begins work.

3.         The employer documents eligibility (based on information received from the employee) and submits documentation to the SESA.

4.         SESA certifies that the individual is eligible for the WOTC and notifies the employer in writing for purposes of filing the tax credit.

Content adapted from:
"Business Tax Credits & Deductions for Employment of People with Disabilities" prepared by Virginia
Commonwealth University, Rehabilitation Research and Training Center on Workplace Supports
(www.worksupport.com)