Adding Workers With Disabilities to Your Payroll: ADA Payroll

In a 2021 survey by the Bureau of Labor Statistics, the unemployment rate for people with disabilities was 10.1 percent, with a slight decrease from the previous year. This is about twice as high as the current unemployment rate of people without disabilities. A large proportion of individuals with disabilities (82.5%) are not in the labor force at all, compared to 35% for individuals without disabilities. If you’re thinking about hiring workers with disabilities, read on.

Hiring workers with disabilities

Tax credits and other incentives can offer help to businesses interested in hiring people with disabilities. Employers report that their employees with disabilities have a much lower turnover rate and better attendance than their other employees. Here are a few points you should know:

1. Small business owners who employ workers with disabilities may qualify for the Disabled Access Credit. The Disabled Access Credit provides a non-refundable credit for small businesses that incur expenditures for the purpose of accommodating employees. There are limitations to this credit. See the IRS for more information. Small business owners who qualify for the credit would need to file Form 8826 Disabled Access Credit with the IRS. The Barrier Removal Tax Deduction can be used the same year as the Disabled Access Credit.

2. Another tax credit available to employers is the Work Opportunity Credit. This allows eligible employers to claim up to 40% of the first $6,000 earned during the first year of employment. There is more information about the Work Opportunity Credit on the IRS website.

3. Read the Americans with Disabilities Act: A Primer for Small Business, which describes the Americans with Disabilities Act (ADA) as it applies to small businesses. The ADA is a federal civil rights law designed to prevent discrimination and enable individuals with disabilities to participate fully in all aspects of society, and applies to businesses with 15 or more employees.

When businesses identify the strengths of employees with disabilities, then put them in jobs that match their skills, those employees turn out to be faithful, low-turnover, hard-working employees.

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4. The Americans with Disabilities Act is enforced by the U.S. Equal Employment Opportunity Commission (EEOC). According to the EEOC, employers covered by the ADA must ensure that people with disabilities have an equal opportunity to:

  • apply for and work in jobs for which they are qualified,
  • be promoted once they are working,
  • access the benefits and privileges of employment offered to other employees, and
  • not be harassed because of the disability.

5. Employers need to know the do’s and don’ts in the hiring process as they apply to people with disabilities. For example, during an interview, you can’t ask questions about a disability, how a person became disabled, or the use of medication, among other questions.

6. You must respect the confidentiality of an applicant or an employee. This can include requests for reasonable accommodations, as well as storage of medical information separate from the person’s regular personnel file.

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7. There are online resources and programs to help employers find qualified candidates when they want to hire individuals with disabilities. For example, Project SEARCH gives workplace experience to high seniors who have disabilities to help them be successful employees. Look for this program in your area. A job coach may be available to help you and the new employee make useful accommodations.

The unemployment statistics above refer to individuals who are willing and able to work productively in jobs that match their skills. Twice as many workforce persons with disabilities are unemployed as workforce people without disabilities. People unable to find work feel unproductive, and our tax dollars are generally needed for support.

Starting in 2001, President Bush’s New Freedom Initiative charged the ADA with the task of partnering with small businesses to find employment for individuals with disabilities. With updated policies, accessible education, computer experience, on-the-job training or coaches, and workplace accommodations, it’s easier than ever for employers to fill open positions with workers with disabilities.

When tax time comes, you will be glad you carefully tracked your employees’ payroll records! Patriot Software’s online payroll lets you run reports and find information easily. Try it for free!

This article has been updated from its original publication date of June 11, 2011.

This is not intended as legal advice; for more information, please click here.

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