How the Oklahoma Quality Jobs Program Could Help Your Company Expand

Oklahoma’s Quality Jobs (QJ) Program is designed to encourage job creation by offering quarterly cash payments to companies that create well-paying jobs in the state. The incentive, based on a percentage of the payroll of the new jobs created, showcases Oklahoma’s commitment to fostering a pro-business environment and supporting economic growth through a well-structured incentive program.

Strategic advantages for businesses

Engaging with the QJ Program can provide several strategic advantages:

• Cash Flow Enhancement: The immediate infusion of cash through quarterly payments directly impacts a company’s bottom line, enhancing its ability to invest in capital improvements, research and development, or workforce expansion.
  
  
• Long-term Planning: With incentives lasting up to a decade, businesses can plan for the long term, making more strategic decisions about growth and operations with a clear understanding of the financial support they can expect.
  
  
• Enhanced Competitiveness: By lowering the effective cost of labor through rebates, companies can compete more effectively both locally and globally, particularly in industries where labor costs are a significant portion of expenses.

Key features of the program

• Cash Payments: Eligible companies may receive quarterly cash payments of up to 5% of new taxable payroll for up to 10 years. This direct incentive is a powerful tool for businesses looking to expand or relocate, providing a consistent stream of cash-flow benefits that can be reinvested into further growth.
  
  
• Job and Payroll Requirements: To qualify, companies must meet minimum job, payroll, and average wage thresholds, which vary depending on the company’s industry and the size of the community. In general, a company must achieve $2.5 million of new annual payroll within three years. However, for certain industries/activities, such as food processors with 75% of out-of-state sales, this threshold may be lowered to $1.5 million. In addition to the incremental payroll threshold, the average wage of the newly created jobs must be equal to the average county wage or the state threshold wage, whichever is lower. This ensures that the benefits of the program are distributed widely, supporting both urban and rural economic development.
   
  • Veterans: To encourage hiring from the veteran labor force, QJ rebates can increase to 6% if 10% of the newly created positions are qualified military veterans.
    
    
• Health Benefits Requirement: Companies must offer health insurance to employees within 180 days of employment and cover at least 50% of premiums, underlining Oklahoma’s focus on not just creating jobs, but also supporting quality, sustainable employment.

• Augmentations: In addition to the “normal” QJ program, Oklahoma has created the same benefits for the following scenarios:
   
  • Small Employer Quality Jobs Program: This program allows small businesses (those with 500 employees or less) to receive up to 5% for up to seven years. Small employers must create five to 15 new positions depending on the size of the company and the community population. In addition, the average wage requirement increases to 110% of the average county wage.
    
    
  • 21st Century Quality Jobs Program: This program was created to attract a highly-skilled, knowledge-based workforce. Eligibility requires at least 10 full-time jobs at an annual average wage of the lesser of the 21st Century state indexed wage or 300% of the county’s average wage. In addition, this program allows a net benefit rate of up to 10% of payroll for up to 10 years.

Financial impact of the Oklahoma QJ Program (2021-2024)

From 2021 through October 16, 2024, the Oklahoma QJ Program has awarded over $157 million in payroll rebates. This significant financial support highlights the program’s role in promoting economic growth across Oklahoma. The annual breakdown based on actual payment dates for each QJ claim is as follows:

• 2021: $26.7 million
• 2022: $41.8 million
• 2023: $53.2 million
• 2024: $35.6 million (as of 10/16/2024)

This distribution of funds showcases Oklahoma’s commitment to supporting businesses through direct financial incentives. The peak in 2023 reflects the program’s adaptability in meeting economic demands, while the total awarded illustrates a substantial investment in job creation and retention.

Maximizing the impact

To fully leverage the QJ Program, businesses should consider the following steps:

• Detailed Planning: Understand the specific requirements and benefits of the program to align with business objectives. Strategically structuring an application could yield greater benefits.
  
  
• Compliance and Documentation: Ensure all criteria are met and maintain thorough documentation to streamline the application process and facilitate compliance checks.
  
  
• Integration with Broader Incentives: Consider how the QJ program can be combined with other state and local incentives to create a comprehensive package that minimizes investment risks and maximizes returns. Notably some other state incentive programs may be mutually exclusive with QJ, and it is important to analyze the overall incentive package and options to leverage the most strategic decision for the company.

Conclusion

Oklahoma’s QJ Program is a strategic tool that can significantly enhance a company’s return on investment. For businesses considering expansion, Oklahoma offers a welcoming and supportive environment with tangible benefits for both the company and the community. As with any incentive program, the key to success lies in understanding the details and aligning them with your strategic goals.