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 - - - IRS Form 8850
July 24, 2007
Re: Work Opportunity Tax Credit, IRS Form 8850
The following is in response to your June 28, 2007 letter, concerning whether the newly revised Internal Revenue Service Form 8850 (the Form) for use in applying for the Federal Work Opportunity Tax Credit (WOTC) comports with the requirements of the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq. (ADA). In particular, you note that the Form has been revised to ask whether a job applicant “is a veteran entitled to a service-connected disability” who meets one of two additional prerequisites for coverage. As more fully set forth below, we do not believe that an employer violates the ADA if it seeks the information necessary to comply with WOTC requirements through use of this Form.
To start, the prior IRS Form 8850 was lawful under the ADA. As you know, the purpose of the WOTC is to encourage employers to hire and train certain individuals. See 26 U.S.C. § 51(d)(12). The WOTC requires that an employer obtain information about an applicant’s WOTC-status before the employer makes an offer of employment in order to qualify for WOTC tax credit. As previously structured, the Form 8850 asked a broadly-framed question that included reference to “vocational rehabilitation referral” as one of several target groups; a “yes” or “no” answer to this question did not indicate as to which of the groups the applicant belonged. For this reason, the Commission noted in a May 24, 2004 letter:
[T]he Form 8850 asks generally if the applicant is a member of any targeted group, one of which is “vocational rehabilitation referral.” A “yes” or “no” answer to this general question does not indicate to which of the groups the applicant belongs. Thus, if asked exactly as posed on the Form 8850, this inquiry is not a “disability-related inquiry” for purposes of the ADA and therefore is not prohibited by the ADA before an offer of employment.1
Congress recently amended the WOTC to “increase and expand” the tax benefit for employers who hire qualified disabled veterans.2 Specifically, Section 51 now provides that employers may receive double the tax benefits for hiring veterans who are “entitled to compensation for a service-connected disability” and who meet certain other criteria. 26 U.S.C. §§ 51(b)(3) & (d)(3)(A)(ii). The WOTC further requires that the employer make the decision to hire a qualified service-connected disabled veteran with knowledge that the veteran meets the WOTC requirements. In response to Congress’s action, the IRS revised Form 8850 to ask as a separate question whether the applicant meets this requirement, that is, whether the applicant has a service-connected disability.
As you are aware, employers are barred from making pre-offer disability-related inquiries under the ADA. 42 U.S.C. § 12112(d)(2)(A). As the EEOC has explained in its ADA Enforcement Guidance: Pre-Employment Disability-Related Questions and Medical Examinations, 8 Fair Empl. Prac. Man. (BNA) 405:7191, 7192 (the Guidance), a disability-related inquiry is a question that is “likely to elicit information about a disability.”3 An exception to the general rule barring pre-offer disability-related inquiries applies to employer adoption of employment policies that benefit individuals with disabilities. The Guidance explains:
An employer may invite applicants to voluntarily self-identify for purposes of the employer's affirmative action program if: the employer is undertaking affirmative action because of a federal, state, or local law including a veterans' preference law) that requires affirmative action for individuals with disabilities (that is, the law requires some action to be taken on behalf of such individuals); or the employer is voluntarily using the information to benefit individuals with disabilities.
Id. at 7196-97. The Guidance further notes that applicants must be informed that the request for self-identification is voluntary (that is, the applicant need not disclose his or her status as an individual with a disability), and that the information provided will be used only for affirmative action purposes.
As we understand it, the WOTC program operates as an affirmative action program in support of the hiring of certain individuals with disabilities: one goal of the program generally, and of the amended provisions supporting employment of service-connected disabled veterans more specifically, is the employment of persons with disabilities. Additionally, Form 8850 clearly informs applicants that completion is voluntary, and the customary practice of employers using the Form is to include it among other application documents for applicant completion.4
In our view, the Form also finds support in EEOC’s ADA regulation that provides for an “other Federal laws defense.” Specifically, the ADA regulations state 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). Under the WOTC, particularly as now amended, employers must know whether an applicant falls into the service-connected disabled veteran eligibility category before making an offer of employment in order to receive the tax credit.5
Recognition that this inquiry on the Form falls within ADA exceptions does not, however, extend ADA protection to employers who misuse the information that the Form provides. An employer using the Form must understand that it will be obtaining disability-related information along with the WOTC information. Such information may not be used to make a discriminatory employment decision in violation of the ADA.
We hope this information is helpful to you. Please note that this letter is an informal discussion of the issues you raised and is not an official opinion of the EEOC. 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- , or Peter S. Gray, Senior Attorney Advisor, at 202-663- .
Sincerely, Carol R. Miaskoff Assistant Legal Counsel
1 The letter is available here: http://www.eeoc.gov/foia/letters/2004/ada_adea_titlevii_tax_credit.html.
2 153 Cong. Rec. S6699 (May 24, 2007) (statement of Sen. Baucus). The amendment to the WOTC may be found at section 8211 of the Small Business & Work Opportunity Tax Act of 2007, which itself is a part of the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, & Iraq Accountability Appropriations Act, 2007, Pub. L. No. 110-28, 121 Stat. 112.
3 The Guidance is available on the EEOC web site at http://www.eeoc.gov/policy/docs/preemp.html.
4 The EEOC’s Guidance further provides that applicants should be further informed that the information will be kept confidential, that no adverse consequences flow from a decision not to provide the information, and that it will be used in a manner consistent with the ADA. The Form meets these requirements: it notes that the information is covered by the IRS confidentiality provision, 26 U.S.C. § 6103; the form advises applicants that completion of the Form is voluntary; and it informs applicants that the Form’s use is to “assist members of targeted groups in securing employment.”
5 Historically, 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 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 § 5.5(c) at V-9. (The EEOC has not put the Technical Assistance Manual on its web site. The Manual is available on the web site of the Job Accommodation Network (JAN) at http://www.jan.wvu.edu/links/ADAtam1.html. JAN is a free service from the Department of Labor's Office of Disability Employment Policy that provides, among other things, technical assistance regarding the ADA and specializes in providing individualized worksite accommodations solutions.)
This page was last modified on October 1, 2007.
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