If you could get a tax credit of up to 30% of the wages you pay on half the workers you hire over the next two years, would it help your bottom line? Would this allow you to be more competitive in the market place? How would you like to get something back from the Federal government instead of just paying your taxes each year? Are you interested in tapping into a new source of workers? Would it be helpful if the new workers you hire had completed a training program in professional cleaning before they go on your payroll?

If you answered yes to one or more of the above questions, I’m suggesting that you get involved in some of the State and Federally funded programs that are designed to get people off of welfare and into jobs in the private sector. It’s not that difficult to do and there are a lot of benefits to you as the employer.

A wide variety of programs are available that serve specific client groups. Each program has different requirements and incentives to participants and employers. They aren’t all suited for you, but some of them definitely are. If you’re not involved in some way, you’re basically throwing away money that could be showing up on the bottom line or being used for other purposes. Considering how hard it is to find and keep good employees and how competitive the marketplace is becoming, it’s important to take advantage of every opportunity to recruit workers and reduce costs.

There are private service bureaus available that for a percentage of the tax credits you receive will fill out all the paperwork and submit it to the appropriate government agency. In many areas community colleges, vocational institutes, and Goodwill Industries are eager to work with local employers to develop short-term training programs tailored specifically to the needs of a company or industry. All at little or no cost to you.

So why aren’t cleaning contractor’s flocking to these programs, many of which have been in place in one form or another for over ten years? According to Doug Johnson, President of Johnson and Associates, a tax credit service bureau in Omaha, NE that works with a number of cleaning contractors around the country, “Most employers don’t know these programs are available and don’t know how to go about it. There are specific procedures for registration, tracking and screening that must be followed.”

Johnson’s company specializes in helping employers by handling the paperwork for the Work Opportunity Tax Credit Program (WOTC). He basically screens worker applications to identify those that qualify and then submits the appropriate documentation for a tax credit. One of the requirements is that the forms must be filled out before the job offer is made, not after the person starts work.

The WOTC program, provides a tax credit of up to $2400 or 40% of the worker’s first $6000 in wages the first year. After the employee works 120 hours you can claim 25% and the full 40% after they have been on the job for 400 hours.

A new tax credit program went into effect in January of this year and has already been extended through 1999. The Welfare to Work (W2) program is more generous. It provides a dollar for tax credit of up to 35% of the first $10,000 in wages with a $3500 maximum in the first year and 50% of the first $10,000 in wages the second year for a total credit of up to $8500 over two years. One requirement is that the employee must be on the job for at least 400 hours before you can file for credit.

These programs focus on specific groups of recipients, such as those living in enterprise zones, on welfare, the disadvantaged, felons, those receiving Supplemental Social Security, and referrals from state vocational rehab programs, as well as other target populations.

As Johnson sees it, “These federal programs are ideally suited for cleaning contractors throughout the country. In some cases up to half the employees a company hires qualify for one program or another. They are already hiring from these target groups anyway. Contractors are doing themselves a disservice by not taking advantage of this opportunity to reduce their taxes. As an independent service, we get paid 20% of the value of the tax credits we get for a company. If we don’t get them credits, we don’t earn a fee.” Johnson has submitted a proposal to the BSCAI to provide his services to association members. His phone number is 402-344-4990.

Wayne Simmons, President of FBG Services Corporation in Omaha, NE, with 1,800 workers in Nebraska, Colorado and Iowa, says these types of programs are beneficial to employees and employers. “It’s one of the better tools the government has given us to work with and we as employers need to take advantage of it. It provides additional stimulus for us to reach out to new labor sources. Unemployment is less than 2% in our area. Having access to qualified workers will be the key to our continued growth in the future. We are always looking for additional pockets of help.”

Simmonds says his company has been involved in different forms of these programs off and on for the last 12 years. “The retention rate for these workers is about the same as for other employee sources. This audience doesn’t require any special training or supervision that we are not already doing. Probably 25% of our applicants are eligible and 15% qualify.”

Simmonds doesn’t know why more contractors don’t take advantage of it. It could be that paperwork requirements or the bureaucracy of dealing with the government scares them off. There is a lot of paperwork involved, but Johnson and Associates is very helpful and takes that load off the employer. Without them it might not be worth the hassle.

Markus Hower, Director of Human Resources for BGM Industries in Kansas City, MO, with 4000 employees in Colorado and Missouri, sees the use of the program growing and is quite happy with the 1997 results. “We have been involved in different programs for 6 years. The latest program is much more favorable to employers and is easier than it used to be to get a person qualified. It’s not that difficult to do, there is less back and forth and running around than with the previous program.

“We don’t make a hiring decision based on a person’s eligibility for a tax credit. Applicants go through the normal screening process and fill out the required forms, then we fax the forms to an outside service bureau and they do all the work for us.”

Most contractors don’t know about these programs or how to get involved with them. There are other programs out there that have different requirements. Some focus on single mothers with children, which may require that they work days because of childcare issues. Others are for people with severe disabilities. You have to identify which particular programs are suited for your area, business and customer base. The tax credit programs are especially helpful if you are located in or near an area that has been designated as an enterprise zone.

Rose Dang, Coordinator of Immigrant and Refugee Programs for South Seattle Community College (SSCC) in Seattle, WA, told me about another funding source that can be of benefit to cleaning contractors. The Office of Refugee and Immigrant Assistance (ORIA) will pay for short-term training programs that lead to employment. These programs can be designed to meet the specific needs of local employers.

At SSCC, Charlie Jones teaches two custodial training programs that are 12 weeks in length. One is for high school students and the other is for refugees of all ethnic groups.

In the refugee program the students use The Comprehensive Custodial Training Manual to learn about cleaning and as an English-as-a-second-language manual. This helps them improve their ability to read and write English as it relates to the cleaning industry. The manual and program have four sections, and each section of the course takes about four weeks to complete. Students spend about one hour a day in the classroom and about three hours a day involved in hands-on practice doing cleaning work around the college campus. The course starts with an employee orientation section and progresses to such basics as chemicals, safety, equipment care, and rest room and office cleaning procedures. The second section covers hard and resilient floor care.

The third section deals with carpet and upholstery cleaning. The fourth section examines specific cleaning requirements for different types of special areas such as those found in hospitals, hotels, schools, restaurants and office buildings.

The college offers classes three times a year, with 15 to 25 students in each program. This type of program has been very successful in the Seattle area over the last 10 years, with several groups and colleges receiving funding. At SSCC the job placement rate for the custodial program is over 90%. Dang’s phone number is 206-768-6846.

This kind of program can be customized to cover what local employers see as important, as they have input through a trade advisory committee. Support from State and Federal funding sources, depending on student eligibility, can include such things as tax credits, subsidized wage support, childcare, medical benefits, and reduced rent.

In a comprehensive program such as this one, one or more local employers must take an active interest in helping to set up and monitor the course to make sure that it continues to meet the needs of students and the job market.

One of the most effective approaches is to have a supervisor from a local contractor act as the instructor. To keep the training reality-based and focused on getting and keeping a job, the program can include an on the job internship after the first few weeks of class. This allows students to put into practice what they are learning in a real work setting. It also gives employers an opportunity to observe and work with students before they are hired and on the payroll.

It’s Not All Roses

Being involved in these types of programs requires that a company make a commitment to successfully implement such a program in their organization. This commitment must come from the top and it takes more than words alone to make it work over the long haul. Someone has to take on the responsibility to find out how this can work in the company and then must follow through to make it a reality. And that’s just the start. Once a program is in place adjustments will have to be made and some additional training and coordination with the supervisory staff will be required.

It is important to keep in mind that the goal is to make the program work in your organization, not to prove why it won’t work or what is wrong with it. Like everything else that becomes a success in a company, there will be difficulties that need to be overcome. Changes will undoubtedly have to be made based on what is learned through the process of implementation. Like any other worthwhile project, it will take time and energy to achieve the desired results. Everyone I spoke with indicated that there are many potential benefits and the results are well worth the effort.

How To Make It Happen In Your Company

1. Identify a point person in your organization who has an inherent interest in employee training and has the authority and cooperation needed to get the job done.
2. Make some phone calls to find out what is being done or offered in your area. Start by contacting the manager of the local Employment Security Office, and then the State office that deals with welfare. Also call the Veterans Administration, The Dept. of Vocational Rehabilitation, and see if there is a Job Training Partnership Act (JTPA) office in your area. Next, call the office of your local community college or vocational technical institute to find out if they offer a janitorial or custodial training program with which you can get involved. If they don’t, send them a letter expressing interest in starting such a program. Call Doug Johnson or any other service bureau like his and see what they offer.
3. Depending on the size of your company, you may want to form an Educational Committee to oversee implementation of such programs in your company. The committee should include a couple of supervisors, a manager, the owner or a vice president, someone from human resources and at least one janitor who cleans buildings for a living.
4. Establish a start date and implement the programs on a limited basis in one building or area to begin with. This will provide you with an opportunity to solve any challenges that may arise before you expand the program on a company-wide basis.

Filed under: Training by William Griffin
Originally Published: CBM January 2000