5 Things to Demystify Hiring Disabled Employees

5 Things to Know About Disabled Employees

According to DOL statistics, 11.9% of the total U.S. population has a disability (29.6% when it comes to those 65 and older). But only 18.7% of those who are disabled are in the labor force. With the continuing tight job market, employers should not overlook the opportunity to hire valuable talent despite disabilities.

Hiring Disabled Employees

Here are 5 things to know when tapping into this pool of workers.

ADA Protection Starts with the Interview

It’s 19 years since enactment of the Americans With Disabilities Act, which is essentially an “equal opportunity” law for people with disabilities. You must make reasonable accommodations to disabled individuals in the hiring process. For example, the DOL says: “Employers are required to provide “reasonable accommodation” — appropriate changes and adjustments — to enable [an individual] to be considered for a job opening.”

ADA Doesn’t Require you to go Bankrupt when Providing Assistance

While the law requires you to make a “reasonable accommodation” for employees, businesses do not have to make one if doing so would cause “undue hardship.” This would include anything that would require significant difficulty or expense. The DOL has this example (which I’ve adapted):

Example: A company with offices on the second floor has no elevator. It wants to hire a wheelchair-bound individual for a secretarial position. She requests a reasonable accommodation because of her wheelchair. Installing an elevator would be an undue hardship and the company would not be required to install one. But if the employer has an office on the first floor, allowing this person to work there would be a reasonable accommodation.

An Employer can Take a Tax Credit for Hiring

If, like many small businesses in 2019, you are looking to hire additional staff, factor in the tax savings from claiming the work opportunity credit. You can take a federal tax credit if a new employee falls into a targeted category, and that employee may just be someone who is disabled. A targeted group for purposes of this tax credit includes a vocational rehabilitation referral (which may cover someone who is disabled) or a qualified veteran certified as being entitled to compensation for a service-connected disability and meeting certain other requirements.

Be sure to submit IRS Form 8850 to your state workforce agency within 28 days after a new employee begins work to ensure that he or she entitles you to the credit.

Note: The work opportunity credit is scheduled to expire at the end of 2019 unless Congress extends it.

Deduct Construction Costs for Changes to Facilities

If you have to make structural changes to your facilities to accommodate an employee’s disability and be ADA-compliant, you may be eligible for a federal tax deduction (instead of having to depreciate any capital cost). The deduction for removing architectural barriers (e.g., lowering water foundations and bathroom mirrors for wheelchair accessibility) or making certain other changes (e.g., adding handicapped parking spaces) is capped at $15,000.

Tax Credit for Assistance

Small businesses can take a federal tax credit to provide access for employees with disabilities (i.e., be ADA-compliant). This is in addition to the deduction for removing architectural barriers.

The disabled access credit is 50% of qualified expenses over $250 but not over $10,500, which means a top annual credit of $5,000. Small businesses for this purpose mean those with revenue not exceeding $1 million or having no more than 30 full-time employees in the previous year.

Examples of expenses qualifying for the credit include:

  • Providing special audio/visual materials
  • Buying or modifying equipment or devices (e.g., tables that elevate or lower)

Final Thought

The DOL’s Office of Disability Employment Policy offers several incentives for employers interested in hiring individuals with disabilities. Also, check out programs in your state that help with this.

Image: Depositphotos.com

Barbara Weltman Barbara Weltman is the Tax Columnist for Small Business Trends. She is an attorney and author of J.K. Lasser’s Small Business Taxes and The Complete Idiot’s Guide to Starting a Home-Based Business. She is also the publisher of Idea of the Day® and monthly e-newsletter Big Ideas for Small Business® and is a trusted professional advocate for small businesses and entrepreneurs.