Employer’s Guide — Hiring Justice‑Involved Workers — WOTC and Federal Bonding
Why consider hiring justice‑involved candidates?
Improves retention and reduces recidivism by providing stable work and income.
Low cost to employer when using WOTC and Federal Bonding together: tax savings plus free insurance reduce hiring risk.
How to claim the Work Opportunity Tax Credit (WOTC) — Step by step
Pre‑screen before or on the day of the job offer. Have the applicant complete IRS Form 8850 (Pre‑Screening Notice and Certification Request) before or on the date the job is offered.
Collect supporting form (DOL Form 9061) if required by your state and submit both to your State Workforce Agency (SWA).
Obtain state certification. The SWA must certify the hire as a member of a WOTC targeted group before you claim the credit. If certification is not received before the employee starts, submit Form 8850 within 28 days of the start date.
Calculate and claim the credit. After certification, calculate the credit on IRS Form 5884 and report it on your business tax return. The credit amount depends on the targeted group and hours worked; for qualified ex‑felons it is commonly up to $2,400 for employees who work 400+ hours.
Practical tips
Keep Form 8850 and supporting documents on file.
Contact your state SWA or local American Job Center for help with pre‑screening and conditional certifications.
How to get Federal Bonding coverage — Step by step
Make a job offer. The bond is issued only after an employer extends a job offer and the applicant accepts.
Contact your state’s Federal Bonding coordinator or local American Job Center. They issue the bond immediately once the job offer is confirmed.
Receive no‑cost coverage for six months. Typical coverage is $5,000 for six months; additional coverage or renewal can be arranged commercially if needed. The bond covers employee dishonesty (theft, forgery, embezzlement), not poor workmanship or workplace injuries.
Practical tips
Use the bond to reduce employer concerns about financial risk and to pilot hires from at‑risk populations.
The bond is available nationwide and can be issued quickly once a start date is set.
Best practices for employers hiring justice‑involved applicants
Evaluate candidates case by case. Consider the nature of the offense, time since conviction, job duties, and evidence of rehabilitation.
Combine incentives. Use WOTC for tax savings and Federal Bonding to mitigate theft risk.
Partner with reentry programs. Local workforce agencies and American Job Centers can help with screening, onboarding, and supports that improve retention.
Document compliance. Maintain pre‑screening forms, certifications, and bonding paperwork to support tax filings and audits.
Where to start right now
WOTC: Download Form 8850 and guidance from the IRS and contact your State Workforce Agency to learn local submission procedures.
Federal Bonding: Call your nearest American Job Center or the Federal Bonding coordinator listed on state workforce sites to request a bond once you have a job offer.
Hiring justice‑involved workers can be a smart business decision that strengthens communities. The WOTC and Federal Bonding Program make it financially and operationally easier to give qualified candidates a second chance while protecting your business.
