The purpose of a profit-sharing plan is to help fund your employees’ and your own retirement and may ultimately help attract quality employees and reduce your employee turnover rate. Profit sharing plans are a form of compensation that companies pay to their employees governed by the terms of an incentive plan wherein a portion of the company’s profits are paid to its employees; usually on an annual basis. Typically, it is a way for an organization to provide employee recognition, and is often used as a way to attract or keep employees.
Porter Law Group offers unparalleled counsel for managing profit sharing needs, and will help develop an incentive plan that distributes a portion of the organization’s profits to employees. It is crucial that the company understands how to establish a plan within the boundaries of the law to create a pool of pre-tax profits that will be distributed to their eligible employees.