How a Trucking Company used ERTC to retain top talent as a good use of tax rebates for employee retention. This is a major issue in the trucking industry, with high turnover rates costing companies time and money.
Many trucking companies struggle to retain their top talent, losing valuable employees to competitors or other industries. The Employee Retention Tax Credit (ERTC) provided a new opportunity for trucking companies to incentivize and retain their best employees.
One such trucking company that has successfully utilized the ERTC to retain top talent is ABC Trucking. ABC Trucking, a mid-sized trucking firm based in the Midwest, has been in business for over 20 years. In recent years, the company has experienced high turnover rates, with many employees leaving for higher-paying jobs or better benefits.
In early 2020, as the COVID-19 pandemic began to disrupt businesses across the country. ABC Trucking was faced with the challenge of retaining its employees during a time of uncertainty and financial strain. The company’s leadership team recognized the potential benefits of the ERTC. Then began exploring how to utilize it to retain its top talent.
ERTC was introduced by the CARES Act in 2020 to help businesses retain their employees during the COVID-19 pandemic. It allows businesses to claim a tax credit of up to $26,000 per W2 employee. This applied to wages paid between March 13, 2020, and December 31, 2021. To be eligible, businesses must have experienced a significant decline in gross receipts. Mostly eligible businesses had been fully or partially shut down due to government-instigated COVID-19 lockdowns.
As a side note, startups & new businesses are NOT being left behind. As a measure to make the ERTC more inclusive, the ERTC program eligibility criteria were expanded to accommodate new businesses. These had to have been established after February 15th, 2020 with gross yearly revenue below $1 million. Meeting these criteria will enable Startups to qualify for up to $7,000 per employee. There is a maximum rebate of $50,000 in Quarter 3 of 2021, and Quarter 4 of 2021.
Devising Employee Bonuses
ABC Trucking met the eligibility requirements for the ERTC. Management decided to take advantage of the tax credit to incentivize and retain their employees. They developed a plan using ERTC to offer bonuses to employees staying with the company through the end of 2021.
Bonuses were structured as follows:
Employees who had been with the company for over a year would receive a bonus of $1,000.
Employees who had been with the company for over three years would receive a bonus of $2,000.B
Bonuses would be paid out at the end of 2021, provided that employees remained with the company until year end.
The plan was communicated to all employees in early May 2021, and the response was overwhelmingly positive. Employees appreciated the company’s efforts to incentivize and retain them during difficult times. Many expressed their gratitude to the company’s leadership team.
Over the next several months, ABC Trucking experienced a significant decline in gross receipts. Many of its customers reduced their shipping volumes or went out of business altogether. The company was able to utilize the ERTC to mitigate some financial strain and continue offering bonuses to employees.
The ERTC proved to be a valuable tool in ABC Trucking’s efforts to retain its top talent. The company offered bonuses to employees who stayed with the company through the end of 2021. Thus the company was able to incentivize employees to stay on board during a time of uncertainty and financial strain. The company was able to retain many of its top performers and avoid the costs associated with high turnover rates.
In addition to the financial benefits of the ERTC, ABC Trucking also saw significant improvements in employee morale and engagement. Employees felt valued and appreciated by the company, and many reported increased loyalty and commitment to their jobs.
Overall, the ERTC proved to be a valuable tool for ABC Trucking in its efforts to retain top talent. Using this tax rebate was able to weather the financial strain of the COVID-19 pandemic. The company’s leadership recognized the potential benefits of the tax credit. They developed a plan to utilize it to incentivize and retain employees. The plan was communicated to employees, and the response was overwhelmingly positive. By offering bonuses to employees staying with the company through the end of 2021, ABC Trucking retained many of its top performers. This improved employee morale and engagement.
Any business that was impacted by the pandemic and government imposed lockdowns can still apply for ERTC. You can then follow the example of ABC Trucking to the benefit of both the company and its employees. To discover if your business is eligible for an ERTC check from the IRS just answer 2 simple questions. Then fill out your contact details here. A fully qualified ERTC CPA will be in touch shortly afterwards.
Check out some Transport company ERTC case studies here.