Under the new law, businesses that hire anyone unemployed for at least 60 days would be exempt from paying the 6.2 percent Social Security payroll tax through December. Employers also would get an additional $1,000 credit if new workers remain on the job a full year.
This is absurdly game-able. How do I know? Because as I read this here (I have not read the legislation) this is a ridiculous windfall for our company. As a seasonal business, my current payroll is about 40 people. Over the next two months, I will hire nearly 400 workers for the summer, most of whom have not been working over the winter as they are retired and just work a few months of the year. Am I really not going to have to pay Social Security taxes on all these people?
And how is anyone going to administer this? Are my payroll company and I going to have to figure out the employment status of all of our hires for the last 60 days to figure out what taxes to collect? Does anyone in Congress even think about this stuff when they pass this garbage?
Update: ADP has more
Update #2: Here is my prediction, if they forgot about seasonal hiring (again, I have not read the letter of the law yet). This will be like the cash for clunkers program - in a month or two they will announce that they have used up the money they had allocated for the whole year.