Can Businesses Use the ERTC To Promote Diversity and Inclusion?

December 14, 2023
Dayes Law Firm

Is your workplace as diverse and inclusive as it should be? You might be surprised. About 15% of workers say their employer doesn’t pay enough attention to diversity, according to a Pew Research Center survey. If you’re one of those employers, you could be upsetting or even losing employees without ever knowing why.

If you’re eligible for the Employee Retention Tax Credit (ERTC), you can use some of that money to foster diversity and inclusion in the workplace. Need some ideas? Consider these.

Hire a Diverse Group of Employees

If your workplace primarily consists of one race and/or gender, it may be time to consider adding to your talent pool. Doing so exposes workers to people of other cultures, which could be beneficial for creativity, problem-solving, and morale.

When looking for employees, try to put aside any biases you might have, focusing instead on the skills those workers can bring to the table. For instance, don’t discount a woman for a computer engineer role just because you think a man could do the job better.

Invest in Diversity and Inclusion Training

Many companies only consider diversity training when an employee complains to HR. It’s much better to avoid problems in the first place by offering regular mandatory training for all workers.

If you’re unsure how to conduct this training correctly, you can use money from the Employee Retention Credit (ERC) to hire a professional trainer. Through onsite training at your workplace, they can teach employees how to treat one another with kindness and respect.

Create Sponsorship or Mentorship Programs

Sponsoring workers from other countries is a great way to add diversity to your team. Applying for an H1-B visa can be expensive ($460 for the filing fee and $500 for fraud detection), but the ERTC can help you cover those costs.

Mentorship programs are another option. Through such a program, you can take employees under your wing and teach them skills to help them succeed at your company.

Make Your Workplace More Disability Friendly

Per federal law, employers must comply with reasonable requests for accommodation from disabled employees. However, many employers would prefer not to do this, so they avoid hiring anyone who isn’t able-bodied (it’s illegal to discriminate against disabled people in this way, but difficult to prove).

Your company can use the ERTC to make your workplace friendlier to people with disabilities. For instance, you could purchase ergonomic chairs, standing desks, text-to-speech software, and screen readers for computers.

Are You Eligible for the Employee Retention Tax Credit?

Before you start making plans about how to use the ERTC, you must determine whether you’re eligible. You may qualify if:

  • Your business had a large drop in gross receipts (at least 50% compared to the same calendar quarter in 2020 and at least 20% for 2021)
  • Your business had a full or partial suspension of operations because of a government order

What if you took a Paycheck Protection Program (PPP) loan? The IRS originally forbade PPP loan recipients from claiming the ERTC, but this is no longer the case. You can claim the credit, but note that you cannot claim wages you paid with funds from your PPP loan.

Let Dayes Law Firm Help Your Business Claim the Credit

Claiming the ERTC can give your business the money it needs to promote diversity, equality, and inclusion in your workplace. If you would like to claim the credit but don’t know where to start, call Dayes Law Firm at (800) 503-2000. We’ll let you know whether your business qualifies for the credit and tell eligible employers how to apply.