State borrows $9.6 million to Encourage Small Businesses To Hire Unemployed

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The Step Up program, which has paid small businesses up to 83 percent of the cost of new hires’ wages, will receive another $9.6 million in funding, Gov. Dannel P. Malloy announced Wednesday.

The State Bond Commission approved borrowing to pay for the subsidies. So far, 415 companies have received the subsidies, and have hired 1,300 workers. To qualify, companies must be headquartered in Connecticut and employ 100 or fewer workers, and the subsidized workers must have been unemployed before being hired.

The state legislature authorized $30 million for the program, and this $9.6 million is still within that limit. Because the program is done with borrowed funds, the money comes to the Department of Labor in segments.

So far, from 80 percent to 85 percent of those hired through Step Up are still employed at the companies that received the subsidies, said Mark Polzella, director of the state Department of Labor’s employment training division.

For manufacturers, the only rule is that the hire has to be unemployed, and the state will pay up to $12,500 over six months, depending on the hire’s wage.
At other businesses, the state pays the full salaries, up to $20 an hour, in the first month, 75 percent of the wage in the second and third months, 50 percent in the fourth and fifth months and 25 percent in the sixth and final months. The hires for those businesses have to be unemployed, live in a town with above-average unemployment and meet eligibility limits tied to their household incomes.

If two companies each hired a person at $14.35 an hour — the average wage of all Step Up hires so far — the factory would get 83 percent of the wages covered over six months, and any other kind of company would get a 63 percent subsidy.

“I am committed to seeing that this worthwhile program receives the funding it needs to continue to help the state’s small businesses expand their workforce, create jobs and strengthen our economy,” Malloy said.

There is also a Step Up subcategory that isn’t limited to small companies, but is restricted to unemployed veterans of the post 9/11 era.

The $9.6 million is expected to cover another year’s worth of operation, and another 1,300 hires.

Jobseekers who want to be put on the list of potential hires under the program, and employers who want to apply for the subsidy can visit

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