Beyond that, there is a disincentive for those businesses that break the $10,000 maximum. There's an actual disincentive to potentially increasing wages on one hand or potentially increasing the number of employees on the other hand. To give an example, employers who had 10 workers, again earning $39,000 each, would have qualified for the 2011 hiring credit, but if they give a wage increase of 1.3% in 2012, this would push the employers up over the $10,000 maximum and they would not qualify for the 2012 hiring credit and their EI rate in 2012 would actually rise by 12¢ per $100.
What should we do to address this disincentive for a small business to actually hire more people? There would be a number of small businesses in that category which would be teetering on the edge of that threshold.