Governor Newsom Signs AB 150 Including the Homeless Hiring Tax Credit Included in 2021-2022 California Budget

COVID’s job losses and business hardships hit economically disadvantaged individuals and small businesses the hardest; homeless hiring incentives can address equity issues


July 16, 2021


Bob Lanter blanter@calworkforce.org 916-806-1228


Sacramento – As part of the 2021-2022 budget, today Governor Newsom signed Assembly Bill 150 which includes the groundbreaking California Homeless Hiring Tax Credit that would simultaneously confront the homelessness crisis facing California, address the job losses stemming from the COVID-19 pandemic that have disproportionately harmed low-income communities, and ease the significant financial strain that many small businesses are currently experiencing.

Originally introduced in the legislature this year by State Senator María Elena Durazo (D-Los Angeles) and State Assemblymember Richard Bloom (D-Santa Monica) through a package of legislation – Senate Bill 424 and Assembly Bill 675 – the concept became a budget priority in both the State Senate and Assembly, reflected in the Joint Budget Proposal sent by the State Legislature to Governor Newsom earlier this month.

Establishing a tax credit between $2,500 and $10,000 per qualified homeless individual hired will create access to meaningful employment and pathways to careers for up to 3,000 individuals. Under this plan, a qualified employer that hires three full time employees may claim up to $30,000 in tax credits annually, thereby assisting both individuals experiencing homelessness in addition to businesses that need additional support to recover from the economic impacts of the pandemic.

To qualify to receive the credit, an eligible employer will need to pay wages subject to withholding under the Unemployment Insurance code, pay family-supporting wages at or above 120% of minimum wage, and employ the individual for at least 500 hours in that taxable year.

According to a study released by the Los Angeles Homeless Services Authority (LAHSA) in 2020, over 66,000 individuals were experiencing homelessness on any given night in Los Angeles County. Additionally, the Los Angeles Economic Development Corporation reports that LA County lost 437,000 jobs in 2020, will have 354,000 fewer living wage jobs in 2021 compared to the pre-pandemic economy, and that 738,672 living wage jobs need to be created for the entire LA County workforce to achieve the basic needs of a family. Moreover, at least 25% of people experiencing homelessness have no prior employment experience; of those who did have employment experience prior to COVID-19, two of the top four employment industries were retail and food service – which have been heavily impacted by COVID-19. To support small businesses and ensure an economic recovery that works for Californians most in need, it is essential to prioritize our homeless neighbors who have experienced historical barriers to employment and even steeper barriers over the last year due to the pandemic.

“Today, California took a giant step forward in addressing homelessness at the local level through the community-based service providers and those that they serve by encouraging and incentivizing connecting those individuals experiencing homelessness with the employers in their community looking to hire,” Bob Lanter, Executive Director of the CA Workforce Association said. “This will be an important tool for our workforce boards across the state to use when providing crucial help and services to the homeless. The CA Workforce Association appreciates all of the hard work that Senator Durazo and Assembly Member Bloom put into this effort and commend the State of California for their ongoing efforts to address homelessness.”