EEOC Issues First Opinion Letter, on Work Opportunity Tax Credit Form

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The Equal Employment Opportunity Commission issued its inaugural Commission Opinion Letter, addressing the legality of an IRS form used for the federal Work Opportunity Tax Credit (WOTC) program. Formal opinion letters have been used by other federal agencies, like the Wage and Hour Division of the Department of Labor, to reflect official agency positions on topics of (more or less) general interest to businesses that may then be relied upon as official guidance.

In this opinion letter, the EEOC notes that the purpose of the WOTC program is to encourage employers to hire and train those experiencing severe difficulties often linked to employment. To qualify for the tax credit, employers must obtain official confirmation of applicants’ WOTC status, by using IRS form 8850. This form asks a broad question about whether the job applicant qualifies for the WOTC under one of several bases (e.g., member of family that has received assistance from TANF for any 9 months during the past 18 months; veteran and member of a family that has received food stamps for at least 3 months during the last 15 months; individual referred by a rehabilitation agency, employment network, or Department of Veterans Affairs; individual convicted of a felony or released from prison for a felony during the past year). The form also asks questions about whether the job applicant is a veteran entitled to compensation for a service-connected disability.

The EEOC states that use of this form does not violate either the Americans with Disabilities Act or the Age Discrimination in Employment Act. It finds that the form’s single, broad question is not a disability-related inquiry under the ADA. The specific questions for disabled veterans are subject to an exception under the ADA, as responses are voluntary and being used to for affirmative action purposes. Additionally, the information requested is necessitated by another law, which is another defense under the ADA. As for the ADEA, it does not prohibit employers from asking age-related questions, and applicants who are hired to enable the employer to qualify for the tax credit include both individuals under and over 40.