In our last blog we talked about the effects of the Paycheck Protection Program and how it has allowed many auto shops to remain open and to continue to employ their staff. While this has been a lifesaver program for businesses, many shops are still struggling to pay their bills because their customer traffic has been drastically reduced due to COVID-19 lockdowns. Since staffing is a huge cost, one way auto shops can cope is to encourage their employees to take vacation days until customer traffic rebounds.
A large percentage of the population has been forced to take involuntary “vacation days” because they were either furloughed or lost their jobs entirely due to the lockdowns and the economic hardships that resulted. But companies that were proactive and applied for PPP loans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act were able to keep their staff working. The CARES Act allows businesses to use loan money to pay for payroll costs, including salaries, wages, parental, family, medical, or sick leave, and vacation pay.
Normally, the summer season in the auto repair business is when shops make their money. The winter holidays are slow, and there’s a seasonal rush in the summertime. That means it’s easier for staff to take time off when everyone wants to take time off at Christmas time, but shops have to stagger vacation requests in the summer. The summer of 2020 is a big wild card, of course. The economy could pick up. People could wind up taking their vacations, putting mileage on their cars, and having to get them fixed when they break down. But at the moment, many families aren’t taking vacations because there are too many unknown variables.
Rather than have staff sit around without work, shop owners might request that staff take their vacations now when it is slow. We are very close to school being out for most students. With schools closed, younger students who are being homeschooled may already be out for the year or have little scheduled work anyway. With the sun and the warmer weather, it’s an ideal time of the year to go camping or hiking in a national park or enjoy the great outdoors in some other way with the family.
For staff members who might not want to take their vacation time now, managers could sweeten the pot by offering to give them vacation days later when the coronavirus threat has passed if they are willing to use the ones they have now. Because vacation days count under the terms of PPP loan forgiveness, it doesn’t cost the shop more to give time off now and still honor the paid time off that employees have accumulated later as well. At the very least, it’s a good idea to encourage vacation use now when the shop doesn’t need all hands on deck. We can all hope the situation changes soon.
How is your shop handling less customer traffic? Is your staff taking vacation days now? How are you communicating or administrating the specific requirements of PPP loans? Because this is a very novel situation and no shops have real experience navigating the challenges, it’s always helpful to get ideas from shops that are finding ways to thrive during COVID-19 and economic shutdowns. Please leave your ideas, experiences, and suggestions either here or on our forums.