Published March 15, 1999

Hiring? Government Assistance Welfare to Work Labor

As your small business gets bigger, you may find yourself needing an extra pair of hands. However, with a limited budget, it can be a challenge to find entry-level workers. Many small business owners have found that recruiting through a welfare-to-work program makes good business sense.

Tapping this new labor source can greatly expand your pool of entry-level applicants. And despite the stereotypes, many former welfare recipients have had at least some on-the-job experience. According to the Urban Institute [http://www.urban.org/], more than two-thirds of the women on welfare had recent work experience before applying for public assistance. The Institute also found that, on average, welfare mothers have over four years of work experience. Once hired, many become enthusiastic and dedicated employees.

There are significant tax benefits in hiring former welfare recipients. Through two federal programs (the Work Opportunity Tax Credit and the Welfare to Work Tax Credit), your business can earn tax credits of up to $8,500 for each employee. You can find detailed information about these programs in "Welfare Check to Paycheck: State Incentives for Businesses to Hire Welfare Clients," a state-by-state guide of tax and wage incentives for employers. The guide can be ordered for $15 from the American Public Human Services Association at (202) 682-0100.

Hiring someone from public assistance may seem complicated. But small businesses can access a wide range of support services by joining The Partnership, a nonpartisan, nationwide alliance of companies that have done it in the past. Over 70 percent of its members are small- to medium-sized businesses. The Partnership works with private and public social services agencies to help other employers through the welfare-to-work hiring process and to offer ongoing advice. There is no charge to become a member.

Upon joining, members receive the "Blueprint for Business" handbook, a comprehensive guide to hiring former welfare recipients. They can visit the Welfare-to-Work Web page [http://www.welfaretowork.org] to read weekly news updates, regular policy briefings and special reports on welfare-to-work issues. They have access to a toll-free hotline for tax credit questions and a database of companies offering guidance from their own experience. Partnership members are also invited to participate in Partnership events around the country.

Hiring employees from welfare is a fairly straightforward process, much like using a traditional employment agency. First, the employer must carefully assess the skills and qualifications needed for the position to be filled. Then it must register with a referral agency via telephone, fax or mail, providing detailed information about the company and the job opening.

The employer can expect to receive employee referrals within two days of registering with the referral agency. If the employer makes an offer and the applicant accepts it, the employer must notify the referral agency of its selection. If the applicant declines the position, or if none of the applicants are suitable, the employer can contact the agency for more referrals.

For more information about issues surrounding Welfare to Work, visit the Small Business Administration Welfare to Work page [http://www.sba.gov/welfare/] or the Welfare Information Network home page [http://www.welfareinfo.org].