Employee Retention Credits for Your Restaurant
Restaurant Recovery Stalls, Alongside Labor
As restaurants try to move forward after the pandemic, they face a lot of roadblocks to full recovery. From the labor shortage to supply chain problems to rising menu prices, restaurants need all the help they can get. To that end, the government is offering Employee Retention Credits to spur recovery.
This summer, restaurants made $200B less relative to a normal year. There were 8M furloughed or fired employees missing too. Thus, businesses looking to thrive throughout the pandemic and recovery phase turned to digitization. Customers want mobile orders, and contactless dining capabilities help avoid more COVID-19 variants and spreading. Meanwhile, restaurants have had trouble gaining back employees to handle the inflow of customers, now eager to take advantage of full service reopening this summer.
Where Employee Retention Credits Comes In
Employee Retention Credits are designed to help restaurants regain capital. The food service industry employed 11.26M workers in May 2020 (2M less than the year before, but since the pandemic had just begun, that’s still formidable). So it makes sense that the government wants to stimulate the industry to get it back to where it was before, as this will have a strong, positive ripple effect on the overall economy.
With the ERC, restaurants can afford to keep their employees on payroll. How? Get credits to spend on:
payroll tax
capital investments
hiring and recruitment
rebuilding business operations as necessary
If the pandemic negatively impacted your business compared to how you did in 2019, you may qualify. Because this is separate from PPP loans, you can still apply for an ERC regardless of whether you received federal help before.
Make the Most of Employee Retention Credits
Right now, restaurants are in the middle of a severe labor crisis. To incentivize employees to come back to work, restaurants need to keep them satisfied which means providing better pay and treatment. Use the ERC to take care of staff. Then that will encourage them to come back on board.
ERC are intended as a leg up, so use them to build a foundation for long-term success. Employees want to go back to work as badly as you want them to return. They just need proper compensation for their frontline efforts, and because they’re feeling the effects of the pandemic just as strongly as your business. Together, businesses and employees can get back to work and really move forward with restaurant recovery.
