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EEOC letter confirms that proper use of IRS Form 8850 in applying for Work Opportunity Tax Credit will not violate EEO laws

In a recently released informal discussion letter, the US Equal Employment Opportunity Commission (EEOC) has confirmed that proper use of Internal Revenue Service (IRS) Form 8850, which is used in applying for the Federal Work Opportunity Tax Credit (WOTC), would not violate the federal equal employment opportunity laws, most prominently, Title I of the Americans with Disabilities Act (ADA).

The WOTC is designed “to encourage employers to hire and train people who are experiencing severe difficulties that are often linked to unemployment,” the EEOC explains in a letter dated July 28, 2010. Thus, for example, the WOTC program applies to long-term recipients of payments under the Temporary Assistance to Needy Families (TANF) program, and to persons who have completed or are completing certain rehabilitative services. To qualify for the WOTC tax credit for hiring individuals in such circumstances, employers are required to obtain official confirmation of the job applicants’ WOTC status before offering employment.

In the letter, Assistant Legal Counsel Carol R. Miaskoff explains that use of the August 2009 version of Form 8850, in compliance with IRS requirements, remains lawful under the ADA. The 2009 version continues to include the 1990’s question as to whether an applicant qualifies for the WOTC under one of several bases, such as TANF recipient or beneficiary of certain federal or state rehabilitation programs. In addition, this latest version of the form asks in a separate question, whether the applicant has a service-connected disability.

According to the Miaskoff, the additional question falls under the exception to the general ADA prohibition on pre-offer disability-related inquiries because it is posed for an affirmative action purpose, and answered on a voluntary basis. So long as the information really is provided on a voluntary basis, and is actually held in confidence, the ADA would not be violated. The additional question on service-connected disability would also fall under the “other federal laws” defense, advised Miaskoff. “Recognition that the Form’s inquiry falls within ADA exceptions does not, however, extend ADA protection to employers who misuse the information that the Form provides,” she cautioned.

The EEOC’s letter is merely an informal discussion of the issues and does not constitute an official opinion of the Commission.