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 

November 15, 2010 
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 the 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 Act of 2010 (HIRE Act). 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 September 2010. 

According to the updated estimates, from February 2010 to September 2010, businesses hired 9.4 

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 

August and September 2010.1

 Among the key findings are: 

• From February to September of 2010, an estimated 9.4 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 1.4 million workers who were 

hired between August and September 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 (1,264,211 hires); Texas (655,321); New York 

 

1

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

unincorporated and not those who were self-employed incorporated. Starting with the August estimate we have 

excluded both the incorporated and unincorporated self-employed from those counted as HIRE act eligible hires. 

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(564,836); Illinois (464,716); Florida (464,172); Pennsylvania (419,519); Ohio 

(386,252); Michigan (326,503); North Carolina (282,960); and New Jersey (270,953). 

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 the HIRE Act into law. 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 an additional $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 (CPS), 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 

Aug-10 to Sep-10 1,373,701 $553 

Total 9,434,960 $512 

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

Employment Status in 2nd Month 

Months 

Total 

Workers 

Unemployed 

≥ 8 weeks 

in 1st Month 

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 11,316,999 12.1% 4.5% 61.9% 21.4% 

Sep to Oct, 2010 10,771,156 

Feb to Sep 2010 (Average) 11.7% 2.8% 65.4% 20.1% 

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 

 

Feb to 

Mar 

Mar to 

Apr 

Apr to 

May 

May 

to Jun 

Jun to

Jul 

Jul to

Aug 

Aug 

to Sep 

Total 

Feb to 

Sep 

All 

Unemployed 

Feb to 

Sep 

Gender

 Men 67.9% 68.8% 63.7% 62.2% 61.8% 58.2% 59.7% 63.6% 58.0% 

 Women 32.1% 31.2% 36.3% 37.8% 38.2% 41.8% 40.3% 36.4% 42.0% 

Age 

 less than 25 24.7% 19.9% 26.9% 27.8% 29.1% 34.6% 31.2% 27.3% 26.6% 

 25 to 54 65.8% 70.9% 63.4% 60.1% 62.9% 56.2% 58.8% 63.1% 59.0% 

 55+ 9.5% 9.3% 9.7% 12.2% 7.9% 9.3% 10.0% 9.6% 14.4% 

Race

 White 77.8% 80.7% 77.1% 76.1% 73.3% 76.5% 78.0% 77.3% 73.7% 

 Black 17.0% 13.5% 18.1% 15.3% 19.0% 17.2% 14.0% 16.1% 19.0% 

 Other 5.2% 5.8% 4.8% 8.6% 7.7% 6.3% 8.0% 6.6% 7.3% 

Hispanic origin 23.1% 21.8% 21.2% 23.7% 21.8% 22.4% 20.6% 22.0% 18.3% 

Education

 Less than H.S. 24.2% 19.9% 17.1% 23.8% 19.2% 16.9% 19.2% 20.1% 20.9% 

 H.S. diploma 40.3% 39.4% 43.7% 35.3% 40.1% 36.4% 35.6% 38.8% 36.2% 

 Some college 21.6% 27.2% 27.0% 22.5% 27.4% 30.2% 27.3% 26.2% 27.2% 

 Bachelor's degree 11.3% 10.9% 8.5% 15.9% 10.9% 13.8% 13.7% 12.0% 11.9% 

 Beyond college 2.5% 2.7% 3.8% 2.5% 2.3% 2.7% 4.3% 3.0% 3.9% 

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 percent of all unemployed workers from February to September were male and 42 

percent were female. 

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Table 4: Industry of HIRE Act Exemption-Eligible New Hires and Unemployed, 

Total February to September, 2010 

HIRE Act 

 Exemption-Eligible New Hires 

Former Industry New Industry 

Former 

Industry of All 

Unemployed 

 Construction 18.9% 15.5% 15.2% 

 Manufacturing 11.6% 10.3% 12.4% 

 Retail trade 13.8% 12.9% 13.4% 

 Transportation and utilities 5.0% 5.1% 4.2% 

 Financial activities 4.0% 4.1% 5.0% 

 Professional and business services 12.2% 13.3% 12.7% 

 Educational and health services 10.3% 10.5% 12.7% 

 Leisure and hospitality 10.9% 14.0% 11.9% 

 All other industries 13.3% 14.1% 12.4% 

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 September, 2010 by region 

 

Eligible for HIRE Act Tax Relief Major Industry in 

the Northeast Former Industry New Industry 

Total 

Unemployed 

Feb to Sep 

Construction 22.0% 17.1% 12.5% 

Manufacturing 10.0% 10.2% 12.2% 

Retail trade 14.4% 11.2% 13.7% 

Transportation and 

utilities 4.7% 4.5% 3.4% 

Financial activities 5.8% 6.6% 6.7% 

Professional and 

business services 11.7% 13.4% 13.7% 

Educational and 

health services 11.9% 15.0% 15.1% 

Leisure and 

hospitality 9.5% 14.3% 11.8% 

All others 9.9% 7.7% 10.9% 

Eligible for HIRE Act Tax Relief Major Industry in 

the Midwest Former Industry New Industry 

Total 

Unemployed 

Feb to Sep 

Construction 19.9% 16.3% 15.7% 

Manufacturing 15.2% 12.4% 15.8% 

Retail trade 11.4% 13.9% 12.9% 

Transportation and 

utilities 5.4% 4.1% 4.7% 

Financial activities 2.9% 2.5% 3.5% 

Professional and 

business services 14.3% 13.8% 12.8% 

Educational and 

health services 9.6% 13.2% 13.0% 

Leisure and 

hospitality 10.9% 13.0% 11.0% 

All others 10.4% 10.7% 10.6% 

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Table 5 continued: Industry of HIRE Act Exemption-Eligible New Hires and Unemployed, 

Total February to July, 2010 by region

Eligible for HIRE Act Tax Relief Major Industry in 

the South Former Industry New Industry 

Total 

Unemployed 

Feb to Sep 

Construction 17.6% 14.2% 15.0% 

Manufacturing 11.1% 9.2% 11.8% 

Retail trade 16.4% 14.9% 14.0% 

Transportation and 

utilities 5.0% 6.1% 4.6% 

Financial activities 2.9% 3.7% 4.9% 

Professional and 

business services 10.6% 12.8% 12.7% 

Educational and 

health services 11.3% 9.4% 12.1% 

Leisure and 

hospitality 11.5% 14.3% 12.8% 

All others 13.8% 15.4% 12.1% 

Eligible for HIRE Act Tax Relief Major Industry in 

the West Former Industry New Industry 

Total 

Unemployed 

Feb to Sep 

Construction 17.7% 15.4% 16.7% 

Manufacturing 10.1% 9.9% 10.3% 

Retail trade 12.3% 10.7% 12.9% 

Transportation and 

utilities 4.7% 5.3% 3.6% 

Financial activities 5.1% 4.6% 5.5% 

Professional and 

business services 12.7% 13.6% 12.3% 

Educational and 

health services 8.6% 6.5% 11.7% 

Leisure and 

hospitality 11.1% 14.4% 11.8% 

All others 17.6% 19.7% 15.3% 

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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 125,075 MT 24,039 

AK 26,035 NE 27,646 

AZ 262,474 NV 116,651 

AR 82,790 NH 31,781 

CA 1,264,211 NJ 270,953 

CO 166,490 NM 49,928 

CT 107,423 NY 564,836 

DE 21,469 NC 282,960 

DC 15,821 ND 13,091 

FL 464,172 OH 386,252 

GA 268,829 OK 66,613 

HI 33,942 OR 130,854 

ID 50,311 PA 419,519 

IL 464,716 RI 37,955 

IN 265,040 SC 162,832 

IA 98,372 SD 15,721 

KS 74,680 TN 171,621 

KY 143,619 TX 655,321 

LA 117,103 UT 85,947 

ME 51,867 VT 14,437 

MD 174,736 VA 193,138 

MA 164,524 WA 243,565 

MI 326,503 WV 30,873 

MN 190,152 WI 186,929 

MS 67,014 WY 16,434 

MO 207,697 Total 9,434,960 

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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. 

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