Cost Cutter legislation that helps small businesses who choose to give a second chance to previously incarcerated individuals is moving in the California Assembly.
AB 231 (Ta; R-Westminster), supported by the California Chamber of Commerce, provides a tax credit to businesses who hire previously incarcerated individuals who are reentering the workforce, reducing costs on businesses and improving opportunities for workers. The bill passed the Assembly Revenue and Taxation Committee this week with unanimous support.
Californians with a history of felony convictions face disproportionate obstacles in reentering the workforce, even when they possess the requisite skills, experience, and willingness to work.
AB 231 allows businesses with fewer than five employees, under the Personal Income Tax (PIT) Law and the Corporation Tax (CT) Law, a credit equal to 40% of the wages paid to an employee who has previously been convicted of a felony.
The bill aims to help those who have already paid their debt to society secure employment and start a new life. AB 231 also will help microbusinesses who choose to give a second chance to formerly incarcerated persons who have served their time and paid their debt to society.
These microbusinesses already are incurring significant risk when giving a formerly incarcerated person a second chance. AB 231 would help these microbusinesses attract and retain workers in a post-COVID economy.
In the current economic climate, where small businesses are struggling to staff appropriately and grappling with rising costs across all sectors, this policy will likely lead to employers considering or continuing to extend employment opportunities to the formerly incarcerated.
In supporting his bill, Assemblymember Tri Ta notes that employment improves recidivism rates for formerly incarcerated individuals. The California Department of Corrections and Rehabilitation reports that more than 60% of individuals released from prison will be offenders again within three years at a cost to the state of about $132,860 a year per inmate. If a formerly incarcerated individual is employed within a year of reintegrating into society, their chance of returning to crime drops to 16%.
Key Vote
AB 231 passed Assembly Revenue and Taxation on May 5, 7-0.
Ayes: Carrillo (D-Palmdale), DeMaio (R-San Diego), Garcia (D-Rancho Cucamonga), Gipson (D-Carson), McKinnor (D-Inglewood), Quirk-Silva (D-Fullerton), Ta (R-Westminster).
The bill will be considered next by the Assembly Appropriations Committee.
