Use Automated HR to Capitalize on WOTC Employment Tax Credits

Use Automated HR to Capitalize on WOTC Employment Tax Credits

The hiring and onboarding of an employee is oftentimes a time-consuming process for both applicants and employers. Tax-credit screening, document collection, background checks, and employment verification, are all components that take up a lot of time, but they don’t have to with today’s technology. Moving to an automated HR process for onboarding will save you time, money and increase your ability to benefit from federal tax credit programs that make more money available for your business.

The federal Work Opportunity Tax Credit (WOTC) is a case in point. WOTC is a voluntary tax credit administered by the Employment and Training Administration, which is part of the U.S. Department of Labor. The program is designed to encourage businesses to hire individuals who fall into one of nine target groups that typically experience significant barriers to employment. These include military veterans, disadvantaged workers within the federal poverty level, the disabled, long-term unemployment recipients, and teens from Empowerment Zones for summer employment.

Many employers try to take advantage of WOTC, but the labor-intensive workflow of manual paper applications they are using prevents them from fully maximizing their advantage. That’s where the advantages come in with an automated system that is compatible with the WOTC process.

One of the main deterrents for candidates, particularly for those whose first language may not be English, is filling out a WOTC questionnaire. The complicated language present on the hardcopy form causes job candidates to answer questions incorrectly. Some skip questions altogether, leading to a missed opportunity for the employer to gather the information necessary to qualify that employee for a tax credit.

On an automated platform, however, the questions can be tailored to lead candidates to the questions that are relevant to them. Through this process, critical information is collected that can indicate which candidates are likely to be WOTC qualified, saving time and increasing the questionnaire completion rate.

Essentially, employers operating on an automated platform using an integrated WOTC screening process will see an increase in tax credits simply because the candidates are able to answer the right questions and finish their applications. Higher application completion rate means more opportunities for tax credits!

Another critical item to acknowledge is the timing of WOTC screening. Paperwork must be completed within 28 days of an employee being hired to be eligible for tax credit consideration under WOTC. When performing a manual screening process, HR reps sometimes have to go the extra mile to chase down candidates to get signatures for IRS forms 8850 and 9061. Easier said than done.

More often than not, because of the labor-intensive nature of manual paperwork, the allotted time of 28 days passes and employers are not able to receive the credit either because the employer:

  • Was unable to track down the candidate to complete the necessary documents;
  • Couldn’t obtain required employee signatures within 28 days; or
  • Couldn’t locate the physical documents to be filed with the respective State Workforce Agency

An automated HR platform eliminates all of these scenarios. The employee completes the documentation online as part of the onboarding process. As a result, the completed and signed documents are kept securely online in the cloud and can be easily accessed.

Which brings up the obvious point here. An automated platform stores data in a centralized location, not in someone’s office, creating clutter. As opposed to having to dig through filing cabinets and a mess of scattered paperwork, the automated platform is easily accessible. This allows both the employer and job the ability to access vital information from any physical location with an internet connection. If the employer decides to make a hire, the new employees will be able to access their information to make it easy to complete onboarding documents. Make sure the platform allows electronic signatures which makes signing the necessary documents even easier. Combine an automated HR solution with the use of a call center and expect your WOTC tax credit certifications to increase. Some employers have reported a 5x increase in credit certifications.

At the end of the day, employers should be migrating towards an automated platform and, in doing so, integrating the WOTC screening into their hiring process. This will reduce applicant drop-off, increase WOTC certifications, and make the entire hiring process a more pleasant experience. And in many states, the HR system can even submit the WOTC application automatically to the State Workforce Agency.

The future is here. It’s time to move on from old-fashioned methods of paper applications. Integrate, adapt, and automate and reap the rewards, or the tax credits, as the case may be.

Use Automated HR to Capitalize on WOTC Employment Tax Credits
Article Name
Use Automated HR to Capitalize on WOTC Employment Tax Credits
If your organization is still administering WOTC screening manually
Publisher Name
First Capitol Consulting.Inc
Publisher Logo