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Hiring and training new employees is a costly and time-consuming process, leading companies to often avoid applicants with long gaps in their work history. This reluctance exacerbates the difficulty for the unemployed or underemployed to secure new jobs, creating a persistent cycle.

State Rep. Matthew Bierlein aims to address this issue by introducing legislation that offers a tax credit to companies as an incentive to hire these individuals. "We have a large population of people here in Michigan who are chronically unemployed," said Bierlein, R-Vassar. "People with long gaps in their resumes, people who’ve been out of the workforce due to health issues, people who may have served time in prison. From an employer’s perspective, they are a riskier hire, so they often get passed over in the hiring process."

The bipartisan legislation proposes a new Work Opportunity Tax Credit at the state level that aligns with an existing federal tax credit. The federal credit is currently administered jointly by the IRS and the Michigan Department of Labor and Economic Opportunity, facilitating easy implementation of a matching state tax credit.

"Reducing taxes will help defray costs for employers who are willing to take the financial risk of hiring someone with a spotty work history, knowing there is a higher chance of turnover," Bierlein said. "This plan will help businesses fill open positions, and it will help people with gaps in their work history get back on their feet, so in the long term it’s better for all involved. The plan will also save the state money because more people will be productive and self-sufficient members of society."

House Bill 5772 was introduced on May 30 and referred to the Committee on Tax Policy.