Maximizing the Benefits of the Employee Retention Credit for Construction Companies

Maximizing the Benefits of the Employee Retention Credit for Construction Companies

construction employee

In the fast-paced world of construction, retaining skilled and talented employees is crucial for the success and growth of construction companies. However, the industry often needs help with attracting and retaining skilled workers. To address this issue, the government introduced the Employee Retention Credit (ERC), a valuable tax incentive program that provides financial support to eligible construction companies. 

In this blog post, we’ll explore the benefits and opportunities associated with the ERC and how construction companies can leverage this credit to enhance their employee retention strategies.

Understanding the Employee Retention Credit

The Employee Retention Credit was introduced as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in 2020, and it was later extended and expanded by subsequent legislation. The credit aims to support businesses, including construction companies, that have faced significant disruptions due to the COVID-19 pandemic.

The ERC provides a refundable tax credit to eligible employers who have experienced a significant decline in gross receipts or have been subject to a full or partial suspension of operations. The credit amount is calculated based on qualified wages paid to employees during specific periods, allowing construction companies to offset a portion of their payroll expenses.

Eligibility Criteria for Construction Companies

Construction companies must meet certain criteria to qualify for the Employee Retention Credit. These include:

Experiencing a decline in gross receipts: Construction companies are eligible for the ERC if they experienced a drop of 20% or more in gross receipts compared to the same quarter in the previous year. Alternatively, they can also qualify if they experienced a significant decline in gross receipts in a calendar quarter compared to the same quarter in 2019.

Partial or full suspension of operations: Construction companies are also eligible for the credit if they were subject to a government order that either fully or partially suspended their operations during the calendar quarter.

It is important for construction companies to carefully evaluate their financial records and consult with professionals, like those at Bottom Line Concepts, to determine their eligibility for the ERC.

Benefits of the Employee Retention Credit for Construction Companies

The ERC offers several significant benefits to construction companies, which can help them address the challenges associated with employee retention. These benefits include:

  • Financial support for retaining employees: The credit provides construction companies a substantial financial incentive to retain their workforce. By offsetting a portion of qualified wages, the ERC helps companies reduce labor costs, making it more feasible to retain skilled employees.
  • Enhanced cash flow and liquidity: Construction companies can claim the ERC as a refundable tax credit. This means that if the credit exceeds the amount of taxes owed, the excess amount can be refunded to the company, providing a valuable infusion of cash flow. This additional liquidity can be used for various purposes, such as investment in equipment, training programs, or employee incentives.
  • Strengthening employee morale and loyalty: The ERC not only provides financial benefits to construction companies but also sends a positive message to employees. By taking advantage of this credit, construction companies demonstrate their commitment to retaining their workforce and weathering challenging times. This can boost employee morale, increase loyalty, and foster a sense of stability and job security.
  • Competitive advantage in attracting new talent: In a highly competitive labor market, offering Employee Retention Credit can be a significant advantage for construction companies when attracting new talent. Job seekers are increasingly seeking employers prioritizing employee well-being and offering attractive benefits. By highlighting the availability of the ERC, construction companies can position themselves as desirable employers, attracting skilled workers and reducing recruitment costs.


The Employee Retention Credit provides a valuable opportunity for construction companies to enhance their employee retention strategies and mitigate the financial challenges of retaining skilled workers. By leveraging the benefits of the ERC, construction companies can reduce labor costs, improve cash flow, strengthen employee morale, and gain a competitive edge in the industry.

Bottom Line Concepts Helps Construction Companies With the ERC

It’s crucial for construction companies to thoroughly understand the eligibility criteria and consult with professionals to ensure compliance with the program requirements. Additionally, staying updated on any changes or extensions to the ERC is crucial to maximize the benefits available.

The professionals at Bottom Line Concepts have helped thousands of companies, including construction companies, capitalize on this valuable credit. To be sure your company maximizes the ERC, contact us today to schedule your no-cost, no-obligation 15-minute phone call with an ERC expert.

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