"For employers, for employees and for taxpayers ... I think it's one of the most innovative programs I've seen in my 25 years in government," Gov. Linda Lingle told a group of employers at the Hilton Hawaiian Village yesterday.

As part of the incentive for employers to participate, the state will pay the minimum wage — $6.25 — for employees who work between 24 and 40 hours a week for six months. Employers can apply for up to two three-month extensions. Medical coverage will be provided through the state's Med-QUEST program. Participants will also receive childcare.

In addition, the state will reimburse employers for their contributions to unemployment insurance, workers' compensation and FICA, for up to 14 percent of a worker's wages.

And though employers are not obligated to keep workers employed after their term is over, that's the ultimate goal of the program — to move people off government assistance.

"We need employers. (They) provide the jobs. We provide the employees," said Jon Hobbs, national director of welfare initiatives for the American Institute for Full Employment, which was contracted to help restructure the state's welfare-to-work program. "History has shown this can be a great match."

Thousands of welfare recipients in Hawai'i could benefit from this program, said Lillian Koller, director of the state Department of Human Services, which oversees the program.

"This is a different approach," Koller said. "We really tried to make this business-friendly."

The state ran a pilot program in October 2004 on O'ahu for three months. More than 30 employers, ranging from retailers to mortgage lenders, participated.

To date, seven people have been placed in jobs with four different companies.

Jack Schneider, president of J.S. Services Inc., an employee leasing company, hired one of the program's participants last year. "It was easy, quick and much less time-consuming" than other welfare-to-work programs, he said. "Now we have a young lady who turned into a valuable, contributing team player. I wish I had 10 more like her."

Employers are allowed to select employees through a hiring process similar to private hires. Companies submit job descriptions to DHS. Staffers match clients with jobs, on the basis of interest, experience, skills and work environments. DHS said it can offer two or three candidates to each company within five days of the request.

Companies, however, have to agree to provide a mentor to give on-the-job guidance and answer questions about the workplace. The state will provide the participant a job coach to help with other job-related issues.

The program can be particularly helpful to small businesses that may be looking at expansion but don't have the money to hire more employees.

"This gives them the opportunity to try something new (with minimal risk)," Lingle said.

The program is modeled after the JOBS Plus program in Oregon, which was launched with the help of the American Institute for Full Employment, a privately financed, nonprofit research-and-development center. When the program was implemented 11 years ago, 86 percent of people who participated in this welfare-to-work program got unsubsidized employment, many with the employers they were hired by. The average wage employers paid participants was $2 higher than minimum wage. (The state paid up to minimum wage; employers could opt to pay participants over that out of their own pockets.)

"This program will improve business, stimulate the economy and transform lives," Koller said.