Businesses can cash in on helping the long-term unemployed get back to work thanks to a new federal law.

Treasury Department officials joined North Carolina’s 2nd District U.S. Rep. Bob Etheridge and the president and CEO of a recently reopened Lee County yarn plant to release a report on the effects on the job market of the HIRE Act of 2010.

Introduced in the House of Representatives June 2009 by West Virginia Democrat U.S. Rep. Alan Mollohan, the Hiring Incentives to Restore Employment law went into effect in March. It allows businesses who hire a worker who has been unemployed or working less than 40 hours a week for two months and claim tax incentives and exemptions.

The Treasury Department reports 4.5 million qualifying workers were hired nationwide from March through May of this year, meaning their new bosses are eligible to receive up to $8.5 billion in incentives.

“Helping unemployed Americans get back to work – particularly the long-term unemployed – is essential to ensuring a strong economic recovery,” said Treasury Assistant Secretary for Economic Policy and Chief Economist Alan Krueger. “Targeted, temporary incentives like the HIRE Act are helping to fuel a private-sector-led recovery. After a period of extraordinary difficulty, the economy is continuing to grow and private sector companies have added jobs for six straight months.”

When a company hires a qualifying worker, it is exempt from paying its share of the worker’s Social Security payroll tax for the rest of the year, or 6.2 percent of the wages paid, for the rest of 2010.

Additionally, the law allows employers to claim a tax credit of up to $1,000 for each newly hired qualifying worker that is retained for one year. The employer may receive up to about $3,500 if the worker earns $40,000 or more a year.

“This new tax credit provided a powerful incentive to grow our business, and was a major factor in our decision to reopen the plant in Sanford,” Parkdale Mills President and CEO Andy Warlick said in a press release. “It’s an example of tax policy that’s done the right way - that’s not about off-shoring but about re-shoring, and it’s helping us create jobs.”

North Carolina Employment Security Commission Rockingham Local Office Manager Jack Haliburton said this is another incentive ESC representatives will share with county employers during visits and discussions.

“We continue to talk to talk to employers about the Work Opportunity Tax Credit (WOTC), as well,” Haliburton said Tuesday.

The WOTC reduces the federal income tax liability of participating employers who hire individuals from 12 target groups who face significant barriers to employment. Haliburton explained these groups include ex-convicts, the disabled and others.

“The HIRE Act is an additional tool that we will use in talking with employers,” Haliburton said. “These are incentives to get employers to do more hiring out there.”

Haliburton said that while there has been hiring among some new industries in the county, health care firms and Perdue Farms, he believes the HIRE Act could do more to encourage companies to bring on more workers.

The law’s Web site, www.hireact.org, offers employers full details on how to recoup these incentives, and an application sheet.

Staff Writer Philip D. Brown can be reached at (910) 997-3111 ext. 32, or by e-mail at pbrown@yourdailyjournal.com.