The U.S. Equal Employment Opportunity Commission

EEOC Office of Legal Counsel staff members wrote the following informal discussion letter in response to an inquiry from a member of the public. This letter is intended to provide an informal discussion of the noted issue and does not constitute an official opinion of the Commission.


ADA: Work Opportunity Tax Credit

Re: Work Opportunity Tax Credit

Dear :

At David L. Frank's request, I am responding to your May 7, 2002 letter, concerning the relationship between federal equal employment opportunity (EEO) law and the Federal Work Opportunity Tax Credit (WOTC), set forth in section 51 of the Internal Revenue Code, 26 U.S.C. § 51. Specifically, you ask whether your client, a consultant who assists employers in obtaining the WOTC, violates any federal EEO laws by asking employees prior to their hire to complete IRS Form 8850 and Department of Labor (DOL) Individual Characteristics Form 9061. These forms require applicants to answer whether they meet the requirements of the WOTC. As more fully set forth below, we do not believe that an employer violates federal EEO law if it seeks the information necessary to comply with WOTC requirements through use of either form.

The WOTC identifies several target groups for whom an employer receives a tax credit. These groups include members of families receiving assistance from Temporary Assistance for Needy Families; a veteran and member of a family receiving food stamps for a certain period; a rehabilitation agency referral; a person between the ages of 18 and 24 who has received food stamps for a certain period; a qualified "summer youth employee" between ages 16 and 18; and a person who was convicted of a felony or released from prison for a felony and was a member of a low income family during the six months before applying for the credit. See 26 U.S.C. § 51(d). Of these categories, there are two that may raise concerns: vocational rehabilitation referral and a "qualified ex-felon."

Vocational Rehabilitation Referral

A vocational rehabilitation referral is defined as follows:

any individual who is certified by the designated local agency as -

(A) having a physical or mental disability which, for such individual, constitutes or results in a substantial handicap to employment, and

(B) having been referred to the employer upon completion of (or while receiving) rehabilitative services pursuant to - (i) an individualized written plan for employment under a State plan for vocational rehabilitation services approved under the Rehabilitation Act of 1973, or (ii) a program of vocational rehabilitation carried out under chapter 31 of title 38, United States Code.

Id. § 51(d)(6).

The WOTC requires that an employer obtain information about an applicant's WOTC-status before making an offer of employment in order to qualify for the tax credit. See id. § 51(d)(12). To apply for the WOTC, an employer must complete IRS Form 8850 and the DOL Form 9061. The IRS Form 8850 is structured to ask a broadly-framed question that includes reference to "vocational rehabilitation referral" as one of several target groups; a "yes" or "no" answer to this question does not indicate to which of the groups the applicant belongs. By contrast, DOL Form 9061 includes separate questions regarding the applicant's membership in the different WOTC categories and asks applicants to state "yes" or "no" in response to each. One question asked on DOL Form 9061 is whether the applicant "is receiving or has received Rehabilitation Services through a State Rehabilitation Services program or the Veterans Administration" (the rehabilitation services inquiry). IRS Form 8850 requires the applicant to affirm that s/he "completed this form on or before the day a job was offered . . . ." The DOL Form 9061 states that it is to be "used in conjunction with the IRS Form 8850."

Under the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq., employers are barred from making pre-offer disability-related inquiries. Id. § 12112(d)(2)(A). As the EEOC has explained in its ADA Enforcement Guidance: Pre-Employment Disability-Related Questions and Medical Examinations, a disability-related inquiry is a question that is "likely to elicit information about a disability." Enforcement Guidance at 4 (emphasis in original). The Guidance further states, however, that "if there are many possible answers to a question and only some of those answers would contain disability-related information, that question is not 'disability-related.'" Id. IRS Form 8850's broadly framed question fits neatly here: a positive answer to this question does not specify to which category the individual belongs and is thus not a disability-related inquiry.

The DOL's Form 9061 is structured differently. Assuming the rehabilitation services inquiry on this Form poses a disability-related inquiry, EEOC's ADA regulation provides for an "other Federal laws defense." Specifically, the regulation states, in pertinent part, that "[i]t may be a defense to a charge of discrimination under this part that a challenged action is required or necessitated by another Federal law or regulation . . . ." 29 C.F.R. § 1630.15(e). In its 1992 Technical Assistance Manual on the Employment Provisions of the Americans with Disabilities Act, the EEOC noted that predecessor statutes to the WOTC, which DOL administered, necessitated pre-offer disability-related inquiries about job applicant eligibility status for the benefits that these statutes offered and that "[t]hese inquiries would not violate the ADA." Technical Assistance Manual at V-9. Under the WOTC, employers similarly must know whether an applicant falls into a WOTC eligibility category before making an offer of employment in order to receive the tax credit. DOL has made the apparent determination that for purposes of administering this law, employers should ascertain into which of the eligibility categories each applicant fits before extending a job offer. The "other Federal laws defense" thus would apply to an employer's use of DOL Form 9061 that includes the rehabilitation services inquiry. Similarly, the defense would be available to an employer using a non-Federal form that posed the rehabilitation services inquiry for the purpose of determining applicant eligibility for the WOTC.

Recognition that the rehabilitation services inquiry on DOL Form 9061 or similar private sector form falls within the other Federal laws defense does not, however, extend ADA protection to employers who misuse the information that these forms provide. An employer using a form that includes, among other things, a rehabilitation services inquiry must understand that it may be obtaining disability-related information along with the WOTC information. Such information may not be used in violation of the ADA.

Qualified Ex-Felon

A qualified ex-felon means an individual who has been convicted of a felony under either U.S. or state law and is being hired within one year of his/her conviction or release from prison. To qualify, the ex-felon also must be a member of a family that falls within a specific income guideline. Id. § 51(d)(4). Only the DOL Form seeks specific conviction information, including dates of conviction and release; the IRS Form 8850 includes this category along with the vocational rehabilitation referral and several others in one broadly-framed inquiry.

None of the Federal EEO laws prohibit specific pre-offer inquiries concerning conviction records; a question concerning whether an individual is an ex-felony offender thus would not be unlawful. Moreover, courts have held that questions regarding conviction records may be probative of job-related characteristics and thus permissible. See, e.g., Green v. Missouri Pac. R.R., 523 F.2d 1290 (8th Cir. 1975) (request for and consideration of conviction records permissible; complete ban on employment of persons with criminal records may violate EEO laws on proof of disparate impact on protected group). In this instance, your client seeks information about felony convictions not to limit the employment of an ex-offender, but to enhance the job prospects of the ex-offender by determining whether his/her employment entitles an employer to a tax credit.

We hope this information is helpful to you. Please note that this is not an official opinion of the Equal Employment Opportunity Commission. If you have any questions or would like to discuss this or any related matter in more detail, you may reach me at 202-663-4645, or Peter S. Gray, Senior Attorney Advisor, at 202-663-4604.

Sincerely,

Carol R. Miaskoff

Assistant Legal Counsel


This page was last modified on April 27, 2007.

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