Last Thursday, President Obama signed what some believe is a jobs creations bill. Others argue that it will simply reward businesses that would have hired workers anyway.

The Hiring Incentives to Restore Employment Act (H.R. 2847) spent some time in the legislative process prior to its passage this past week. The bill passed the U.S. Senate on February 24. The U.S. House amended the bill and sent it back to the U.S. Senate for concurrence. The final bill was passed by the U.S. Senate on Wednesday, March 17 .

The bill takes several actions to incentivize job creation, among these actions:  

• Employers who hire a person without a job do not have to pay the new worker’s social security taxes for the remainder of the year. All private-sector employers, including nonprofits are eligible along with post-secondary schools. Eligible workers must swear in writing that they have not been employed for more than 40 hours during the previous 60 days and must pay their own social secruity tax (6.2% of pay)

• Employers are eligible for a tax credit worth up to $1,000 on their 2011 tax return if they retain the new worker for at least 52 consectuive weeks. The employer is eligible for the lesser of $1,o00 or 6.2 percent of wages paid to the employee over the 52-week period. In addition, the employer must pay the new worker, during the second half of this 52-week period, at least 80% of what it paid during the first half.  

• Includes employers in Puerto Rico and other U.S. possessions and covers Railroad Retirement taxes.

• An employer cannot collect these tax breaks on workers who replace people they laid off, but it can get the incentives on workers who replace ones who quit or were fired for cause.