U.S. TREASURY DEPARTMENT 

UPDATED ESTIMATES OF NEWLY HIRED EMPLOYEES 

ELIGIBLE FOR THE HIRE ACT TAX EXEMPTION

Report Includes State-by-State Estimates of Eligible Hires

October 8, 2010
1

Updated Estimates of Newly Hired Employees

Eligible for HIRE Act Tax Exemption 

Report Includes State-by-State Estimates of Eligible Hires

This report updates and supplements the U.S. Department of Treasury’s ongoing analysis of the 

number of newly hired workers whose employers could potentially qualify for tax exemptions 

under the Hiring Incentives to Restore Employment (HIRE) Act of 2010. The HIRE Act exempts 

employers from paying their 6.2 percent share of the Social Security payroll tax for the 

remainder of 2010 for eligible new hires, and provides a $1,000 tax credit to employers if they 

retain eligible workers for 52 weeks. This report provides monthly updated estimates of 

potential eligibility under the HIRE Act, including data through July 2010. According to the 

updated estimates, from February 2010 to August 2010, businesses hired 8.1 million new 

workers who had been unemployed for eight weeks or longer; that figure will grow over the year 

as additional eligible employees are hired. 

This report includes state-by-state estimates of the number of newly hired workers whose 

employers potentially qualify for the HIRE Act tax exemption. In addition, this report includes 

regional breakdowns of the industries in which eligible workers are being hired.

The HIRE Act, which President Obama signed into law in March 2010, is an example of a 

targeted, time-limited program that promotes private-sector job growth. The HIRE Act gives 

employers an incentive to accelerate hiring this year because the payroll tax exemption expires at 

the end of 2010. 

The updated estimates extend previous Treasury analysis by including workers hired between 

July and August 2010.1 Among the key findings are:

From February to August of 2010, an estimated 8.1 million workers who had been 

unemployed for eight weeks or longer were hired by employers who are eligible for the 

HIRE Act payroll tax exemption. This estimate includes 1.2 million workers who were 

hired between July and August 2010. (see Table 1)

Newly hired workers whose employers are eligible for the HIRE Act payroll tax 

exemption constitute 11.7 percent of all workers who were unemployed for eight weeks 

or longer since the law took effect in February 2010. In other words, about one in eight 

workers who have been unemployed for eight weeks or longer are hired in the subsequent 

month. (see Table 2 and Figure 1) 

The 10 states with the largest number of workers whose employers potentially qualify for 

HIRE Act tax exemptions are: California (1,107,653 hires); Texas (564,689); New York 

 

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In this and previous months reports we exclude those who were self-employed unincorporated from the HIRE act 

eligible group. However, in previous reports we had counted the self-employed incorporated as eligible hires. 

Starting with the August estimate we will exclude both the incorporated and unincorporated self-employed from 

those counted as HIRE act eligible hires.
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(467,289), Florida (396,954); Illinois (389,054); Ohio (348,700); Pennsylvania (333,255);

Michigan (262,659); Georgia (249,312); and North Carolina (246,830). Table 6 reports 

the number of eligible new hires for each state.

In addition to these findings, Table 3 reports the demographic characteristics of the newly hired, 

eligible workers. Table 4 reports the industries in which the newly hired workers were employed 

prior to their period of unemployment and the industries in which the newly hired workers found 

jobs. About one fifth of newly hired exemption-eligible workers were previously employed in 

the construction industry. Similarly, employers in the construction industry have hired the 

largest share of exemption-eligible workers since February 2010, though that share is slightly 

lower than the share previously employed in construction. Table 5 reports the industries for each

of the four geographic regions.

Comprehensive data on the use of the HIRE Act from the Internal Revenue Service (IRS) will 

not be available until after employers file tax returns in 2011. In the interim, Treasury’s Office 

of Economic Policy is providing monthly estimates of the number of newly hired workers whose 

employers potentially qualify for the HIRE Act tax exemption. These interim estimates are

based on Treasury analysis of the Current Population Survey, a monthly survey conducted by the 

Bureau of Labor Statistics. 

Additional Background on the HIRE Act

On March 18, 2010 President Obama signed into law the Hiring Incentives to Restore 

Employment (HIRE) Act of 2010. The HIRE Act provides employers an incentive to hire 

workers who have been unemployed for 60 days or longer by exempting wages paid to these 

workers from the employer’s 6.2 percent contribution of Social Security payroll taxes for the 

remainder of 2010. In addition, the HIRE Act allows employers to claim a tax credit of up to 

$1,000 for each newly hired qualifying worker who is retained for one year. If, for example, an 

employer hired an unemployed worker after February and paid that worker $40,000 in salary, the 

HIRE Act tax exemption will reduce the employer’s payroll tax obligations by up to $2,480 this 

year (6.2 percent of $40,000), and, if the employer retains that worker for 52 weeks, the 

employer will receive in addition a $1,000 tax credit, bringing the total tax savings to as much as 

$3,480. 

Employers can claim the HIRE Act tax exemption for all wages paid to qualifying employees 

through the remainder of 2010.
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Methodology

The estimates in this report use the Current Population Survey, which is the basis for official 

government labor force statistics, such as the unemployment rate. The CPS consists of a 

representative sample of about 50,000 housing units a month, and labor force questions are asked 

concerning all working-age adult members in the household. The labor force questions relate to 

the worker’s labor force status in the CPS reference week, which is the week that contains the 

12th day of the month. The specific date that a worker transitions from one labor force status to 

another is not reported. 

The rotation group design of the CPS allows us to create two-month linked samples by matching 

surveyed workers in one month to their records in the next month. This is possible for 

approximately three fourths of the CPS sample.

For this report, workers are identified as eligible for the tax exemption if they report that they 

have been unemployed for eight weeks or longer in the first month of the two month period. 

Eligible workers who report holding a job with a private employer in the second month of the 

two-month period are classified as qualifying for the tax exemption under the HIRE Act. 

A full description of the methods used to construct these estimates can be found in the July 12, 

2010 Treasury report, which is available at: http://www.treas.gov/press/releases/docs/HIREActAnalysis-7-11-2010-FINAL.pdf
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Table 1: Estimated Number of New Hires 

for which Employer is Eligible for HIRE Act Tax Exemption

Transition months

New

Exemption-Eligible Hires

Average 

Weekly Earnings*

Feb-10 to Mar-10 1,385,937 $476

Mar-10 to Apr-10 1,765,519 $536

Apr-10 to May-10 1,319,394 $524

May-10 to June-10 1,137,858 $518

June-10 to July-10 1,273,247 $453

July-10 to Aug-10 1,179,303 $527

Total 8,061,258 $505

Note: 

*Average weekly earnings are estimated from the out-going rotation group 

subsample of the CPS. Earnings are reported on the new job in the second month of the 

linked sample (i.e., pertaining to March through July). 
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Table 2: Monthly Transition Rates 

for Workers Unemployed 8 Weeks or More

Total 

Workers

Unemployed

≥ 8 weeks 

in 1st Month

Employment Status in 2nd Month

Months

Private 

ExemptionEligible 

Employment*

Other 

employment**

Still 

unemployed

Out of 

labor 

force

Dec, ‘08 to Jan, ‘09 6,465,697 9.3% 2.0% 66.7% 22.0%

Jan to Feb, 2009 7,973,379 10.3% 2.3% 67.4% 20.1%

Feb to Mar, 2009 9,014,765 11.0% 2.6% 66.3% 20.0%

Mar to Apr, 2009 9,829,540 14.2% 3.2% 64.1% 18.5%

Apr to May, 2009 9,691,569 11.1% 2.2% 67.0% 19.7%

May to Jun, 2009 9,753,553 11.2% 2.0% 68.7% 18.1%

Jun to Jul, 2009 9,934,851 11.7% 2.6% 67.3% 18.4%

Jul to Aug, 2009 10,618,786 10.1% 2.3% 66.7% 20.9%

Aug to Sep, 2009 10,868,047 11.3% 3.7% 65.7% 19.3%

Sep to Oct, 2009 11,040,918 10.1% 2.5% 68.1% 19.2%

Oct to Nov, 2009 10,804,514 10.7% 1.8% 68.6% 18.9%

Nov to Dec, 2009 10,928,733 7.9% 1.6% 70.6% 19.9%

Dec, ‘09 to Jan, ‘10 10,821,742 8.3% 1.5% 69.8% 20.4%

Jan to Feb, 2010 11,904,522 8.9% 1.7% 71.2% 18.2%

Feb to Mar, 2010 12,201,584 11.4% 2.3% 67.2% 19.1%

Mar to Apr, 2010 12,546,709 14.1% 2.9% 63.7% 19.4%

Apr to May, 2010 11,807,334 11.2% 2.9% 66.4% 19.5%

May to Jun, 2010 10,959,952 10.4% 1.7% 66.6% 21.3%

Jun to Jul, 2010 10,485,566 12.1% 2.5% 65.6% 19.8%

Jul to Aug, 2010 10,995,780 10.7% 2.5% 66.3% 20.5%

Aug to Sep, 2010 11,249,698

Feb to Aug 2010 (Average) 11.7% 2.5% 66.0% 19.9%

Note: 

*

Exemption-eligible jobs include all private, non-self-employed jobs;

** Other 

employment includes government, self-employment, and employment without pay.
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Table 3: Demographic Characteristics of New Hires and Unemployed in 2010,

by HIRE Act Tax Exemption Eligibility

Eligible for HIRE Act Tax Exemption All 

Unemployed 

Feb to 

Aug

Feb to 

Mar

Mar to 

Apr

Apr to 

May

May 

to Jun

Jun to

Jul

Jul to

Aug

Total 

Feb to 

Aug

Gender

 Men 67.9% 68.8% 63.7% 62.2% 61.8% 58.2% 64.2% 58.5%

 Women 32.1% 31.2% 36.3% 37.8% 38.2% 41.8% 35.8% 41.5%

Age 

 less than 25 24.7% 19.9% 26.9% 27.8% 29.1% 34.6% 26.6% 26.7%

 25 to 54 65.8% 70.9% 63.4% 60.1% 62.9% 56.2% 63.8% 59.2%

 55+ 9.5% 9.3% 9.7% 12.2% 7.9% 9.3% 9.6% 14.1%

Race

 White 77.8% 80.7% 77.1% 76.1% 73.3% 76.5% 77.2% 73.8%

 Black 17.0% 13.5% 18.1% 15.3% 19.0% 17.2% 16.5% 18.9%

 Other 5.2% 5.8% 4.8% 8.6% 7.7% 6.3% 6.3% 7.3%

Hispanic origin 23.1% 21.8% 21.2% 23.7% 21.8% 22.4% 22.3% 18.3%

Education

 Less than H.S. 24.2% 19.9% 17.1% 23.8% 19.2% 16.9% 20.2% 21.0%

 H.S. diploma 40.3% 39.4% 43.7% 35.3% 40.1% 36.4% 39.3% 36.6%

 Some college 21.6% 27.2% 27.0% 22.5% 27.4% 30.2% 26.0% 26.8%

 Bachelor's degree 11.3% 10.9% 8.5% 15.9% 10.9% 13.8% 11.7% 11.8%

 Beyond college 2.5% 2.7% 3.8% 2.5% 2.3% 2.7% 2.7% 3.7%

Note: Each panel presents the share of the sample in that row category. For example, 67.9

percent of the eligible hires from February to March were male and 32.1 percent were female, 

while 58.5 percent of all unemployed workers from February to August were male and 41.5

percent were female. 
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Table 4: Industry of HIRE Act Exemption-Eligible New Hires and Unemployed, 

Total February to August, 2010

HIRE Act

Exemption-Eligible New Hires

Former 

Industry of All 

Former Industry New Industry Unemployed

 Construction 19.6% 16.9% 15.6%

 Manufacturing 11.8% 9.8% 12.5%

 Retail trade 13.7% 12.3% 13.4%

 Transportation and utilities 5.1% 5.2% 4.2%

 Financial activities 4.0% 4.2% 5.1%

 Professional and business services 12.0% 13.2% 12.7%

 Educational and health services 9.5% 9.7% 12.2%

 Leisure and hospitality 11.1% 14.2% 12.0%

 All other industries 13.1% 14.5% 12.3%

Note: All other industries include: Agriculture, forestry, fishing, and hunting, mining, 

information, wholesale trade and other services.
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Table 5: Industry of HIRE Act Exemption-Eligible New Hires and Unemployed, 

Total February to August, 2010 by region

Major Industry in 

the Northeast

Eligible for HIRE Act Tax Relief Total 

Unemployed 

Former Industry New Industry Feb to Aug

Construction 24.4% 19.1% 13.0%

Manufacturing 11.0% 10.9% 12.6%

Retail trade 13.9% 8.9% 13.9%

Transportation and 

utilities 3.8% 3.9% 3.3%

Financial activities 5.4% 6.4% 6.6%

Professional and 

business services 10.4% 14.4% 13.6%

Educational and 

health services 10.9% 14.4% 14.4%

Leisure and 

hospitality 9.6% 13.6% 11.9%

All others 10.5% 8.2% 10.6%

Major Industry in 

the Midwest

Eligible for HIRE Act Tax Relief Total 

Unemployed 

Former Industry New Industry Feb to Aug

Construction 21.3% 17.7% 16.4%

Manufacturing 15.3% 11.7% 15.9%

Retail trade 11.7% 13.5% 12.6%

Transportation and 

utilities 5.7% 4.4% 4.8%

Financial activities 2.8% 2.5% 3.5%

Professional and 

business services 14.6% 14.2% 12.7%

Educational and 

health services 7.8% 11.8% 12.6%

Leisure and 

hospitality 10.8% 13.9% 11.0%

All others 10.1% 10.4% 10.5%
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Table 5 continued: Industry of HIRE Act Exemption-Eligible New Hires and Unemployed, 

Total February to July, 2010 by region

Major Industry in 

the South

Eligible for HIRE Act Tax Relief Total 

Unemployed 

Former Industry New Industry Feb to Aug

Construction 17.4% 15.6% 17.4%

Manufacturing 11.4% 8.3% 11.4%

Retail trade 16.8% 15.0% 16.8%

Transportation and 

utilities 5.4% 6.2% 5.4%

Financial activities 3.0% 4.0% 3.0%

Professional and 

business services 10.1% 11.6% 10.1%

Educational and 

health services 11.0% 8.5% 11.0%

Leisure and 

hospitality 11.9% 14.9% 11.9%

All others 12.9% 15.7% 12.9%

Major Industry in 

the West

Eligible for HIRE Act Tax Relief Total 

Unemployed

Former Industry New Industry Feb to Aug

Construction 17.9% 16.3% 17.0%

Manufacturing 9.8% 9.4% 10.2%

Retail trade 11.7% 10.0% 13.0%

Transportation and 

utilities 5.0% 5.5% 3.6%

Financial activities 5.2% 4.5% 5.7%

Professional and 

business services 13.0% 13.4% 12.2%

Educational and 

health services 8.3% 6.2% 11.1%

Leisure and 

hospitality 11.4% 13.9% 11.9%

All others 17.7% 20.7% 15.2%
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Table 6: Number of New Hires for which Employer is 

Eligible for HIRE Act Tax Exemption, by State

State

Number of

eligible hires State

Number of

eligible hires

AL 105,883 MT 20,436

AK 23,609 NE 24,520

AZ 234,948 NV 102,693

AR 63,227 NH 28,738

CA 1,107,653 NJ 224,166

CO 147,546 NM 47,884

CT 87,616 NY 467,289

DE 18,289 NC 246,830

DC 13,903 ND 10,656

FL 396,954 OH 348,700

GA 249,312 OK 55,616

HI 27,554 OR 111,558

ID 38,900 PA 333,255

IL 389,054 RI 31,594

IN 225,153 SC 134,757

IA 79,776 SD 13,460

KS 55,016 TN 139,352

KY 109,940 TX 564,689

LA 99,375 UT 80,704

ME 46,461 VT 11,485

MD 132,347 VA 179,344

MA 151,086 WA 223,001

MI 262,659 WV 27,260

MN 159,446 WI 158,581

MS 61,845 WY 13,216

MO 173,922 Total 8,061,258
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Figure 1: Monthly Transition Rate to Private Exemption-Eligible Employment,

For Workers Unemployed 8 Weeks or More

Note: This chart presents data reported in Table 2. The solid line represents the estimated 

transition rates into private exemption-eligible employment for each month. The dashed 

lines represent the estimated transition rate plus and minus one standard error. Standard 

errors are computed using the sample weights provided by the CPS for the initial month of 

each two month linked sample.