To amend the Internal Revenue Code of 1986 to provide payroll tax relief to encourage the hiring of unemployed individuals, and for other purposes.

Summary: Unemployed Workers Hiring Act of 2011 - Amends the Internal Revenue Code to exempt employers and employees from employment taxes for up to one year for wages paid to new employees who had exhausted all unemployment benefits prior to the start of their employment and who are working on average at least 30 hours a week.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Unemployed Workers Hiring Act of 
2011''.

SEC. 2. TEMPORARY PAYROLL TAX REDUCTION FOR NEWLY HIRED EMPLOYEES.

    (a) Employer.--
            (1) In general.--Paragraph (1) of section 3111(d) of the 
        Internal Revenue Code of 1986 is amended by striking so much as 
        precedes subparagraph (A) and inserting the following:
            ``(1) In general.--Subsection (a) shall not apply to wages 
        paid by a qualified employer with respect to employment of any 
        qualified individual during the 1-year period beginning with 
        the date the individual's employment with the employer began 
        for services performed--''.
            (2) Qualified individual.--Paragraph (3) of section 3111(d) 
        of such Code is amended--
                    (A) by striking subparagraphs (A) and (B) and 
                inserting the following new subparagraphs:
                    ``(A) begins employment with a qualified employer 
                during the 2-year period beginning after the date of 
                the enactment of the Unemployed Workers Hiring Act of 
                2011,
                    ``(B) certifies by signed affidavit, under 
                penalties of perjury, that such individual on the day 
                before the date the employee begins work for the 
                employer was in receipt of unemployment compensation 
                under State or Federal law or was unemployed and had 
                exhausted the right to such unemployment 
                compensation,'', and
                    (B) by striking ``and'' at the end of subparagraph 
                (C), by striking the period at the end of subparagraph 
                (D), and by adding at the end the following new 
                subparagraphs:
                    ``(E) prior to the date the employment with the 
                employer begins, has not been employed by the employer 
                at any time, and
                    ``(F) is employed on average at least 30 hours of 
                service per week.''.
            (3) Recapture.--Subsection (d) of section 3111 of such Code 
        is amended by adding at the end the following new paragraph:
            ``(6) Recapture.--
                    ``(A) In general.--In any case in which an 
                individual ceases to be a qualified individual with 
                respect to the employer during the 1-year period 
                beginning with the date the individual's employment 
                with the employer began, the tax imposed under 
                subsection (a) with respect to individuals in his 
                employ shall be increased by the amount such tax was 
                reduced with respect to such individual by reason of 
                paragraph (1).
                    ``(B) Due date.--The increase in tax under 
                subparagraph (A) shall be paid over to the Secretary--
                            ``(i) not later than 30 days after the date 
                        such individual first ceases to be a qualified 
                        individual during such 1-year period, and
                            ``(ii) in the same manner as deposits are 
                        made under section 6302 of taxes imposed on 
                        such employer under subsection (a) with respect 
                        to individuals in his employ.''.
    (b) Employee.--Section 3101 of such Code is amended by adding at 
the end the following new subsection:
    ``(d) Temporary Exemption for Newly Hired Unemployed Individuals.--
In the case of a qualified individual (as defined in section 
3111(d)(3)) of a qualified employer (as defined in section 3111(d)(2)), 
subsection (a) shall not apply with respect to the wages of such 
individual with respect to employment with such employer during the 1-
year period beginning with the date such employee began work for such 
employer.''.
    (c) Application to Railroad Retirement Taxes.--
            (1) Employers.--
                    (A) In general.--Paragraph (1) of section 3221(c) 
                of such Code is amended to read as follows:
            ``(1) In general.--In the case of compensation paid by a 
        qualified employer--
                    ``(A) with respect to having a qualified individual 
                in the employer's employ for services rendered to such 
                qualified employer, and
                    ``(B) during the 1-year period beginning with the 
                date any qualified individual's employment with such 
                employer began,
        the applicable percentage under subsection (a) shall be equal 
        to the rate of tax in effect under section 3111(b) for the 
        calendar year.''.
            (2) Qualified individual.--Paragraph (3) of section 3221(c) 
        of such Code is amended--
                    (A) by striking subparagraphs (A) and (B) and 
                inserting the following new subparagraphs:
                    ``(A) begins employment with a qualified employer 
                during the 2-year period beginning after the date of 
                the enactment of the Unemployed Workers Hiring Act of 
                2011,
                    ``(B) certifies by signed affidavit, under 
                penalties of perjury, that such individual on the day 
                before the date the employee begins work for the 
                employer was in receipt of unemployment compensation 
                under State or Federal law or was unemployed and had 
                exhausted the right to such unemployment 
                compensation,'', and
                    (B) by striking ``and'' at the end of subparagraph 
                (C), by striking the period at the end of subparagraph 
                (D), and by adding at the end the following new 
                subparagraphs:
                    ``(E) prior to the date the employment with the 
                employer begins, has not been employed by the employer 
                at any time, and
                    ``(F) is employed on average at least 30 hours of 
                service per week.''.
            (3) Recapture.--Subsection (c) of section 3221 of such Code 
        is amended by adding at the end the following new paragraph:
            ``(6) Recapture.--
                    ``(A) In general.--In any case in which an 
                individual ceases to be a qualified individual with 
                respect to the employer during the 1-year period 
                beginning with the date the individual's employment 
                with the employer began, the tax imposed under 
                subsection (a) with respect to individuals in his 
                employ shall be increased by the amount such tax was 
                reduced with respect to such individual by reason of 
                paragraph (1).
                    ``(B) Due date.--The increase in tax under 
                subparagraph (A) shall be paid over to the Secretary--
                            ``(i) not later than 30 days after the date 
                        such individual first ceases to be a qualified 
                        individual during such 1-year period, and
                            ``(ii) in the same manner as deposits are 
                        made under section 6302 of taxes imposed on 
                        such employer under subsection (a) with respect 
                        to individuals in his employ.''.
            (4) Employee.--Section 3201 of such Code is amended by 
        redesignating subsection (c) as subsection (d) and by inserting 
        after subsection (b) the following new subsection:
    ``(c) Temporary Exemption for Newly Hired Unemployed Individuals.--
In the case of a qualified individual (as defined in section 
3221(c)(3)) employed by a qualified employer (as defined in section 
3221(c)(2), the applicable percentage with respect to compensation 
received during the 1-year period beginning with the date such 
qualified individual's employment with such employer began shall be 
equal to the rate of tax in effect under section 3101(b) for the 
calendar year.''.
    (d) Guidance.--The Secretary of the Treasury shall provide such 
guidance as is necessary or appropriate to carry out the purposes of 
the amendments made by this section.
    (e) Transfers to Federal Old-Age and Survivors Insurance Trust 
Fund.--There are hereby appropriated to the Federal Old-Age and 
Survivors Trust Fund and the Federal Disability Insurance Trust Fund 
established under section 201 of the Social Security Act (42 U.S.C. 
401) amounts equal to the reduction in revenues to the Treasury by 
reason of the amendments made by subsections (a) and (b). Amounts 
appropriated by the preceding sentence shall be transferred from the 
general fund at such times and in such manner as to replicate to the 
extent possible the transfers which would have occurred to such Trust 
Fund had such amendments not been enacted.
    (f) Transfers to Social Security Equivalent Benefit Account.--There 
are hereby appropriated to the Social Security Equivalent Benefit 
Account established under section 15A(a) of the Railroad Retirement Act 
of 1974 (45 U.S.C. 231n-1(a)) amounts equal to the reduction in 
revenues to the Treasury by reason of the amendments made by subsection 
(c). Amounts appropriated by the preceding sentence shall be 
transferred from the general fund at such times and in such manner as 
to replicate to the extent possible the transfers which would have 
occurred to such Account had such amendments not been enacted.
    (g) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this subsection shall apply to wages paid 
        after the date of the enactment of this Act.
            (2) Railroad retirement taxes.--The amendments made by 
        subsection (c) shall apply to compensation paid after the date 
        of the enactment of this Act.