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Helping employees affected by disasters

RFP
Human Capital BulletinThe devastation caused by major disasters like Hurricanes Harvey and Irma creates personal and business challenges. Employers are often eager to provide much-needed aid to their employees, but are unsure of the most effective ways to help or are unaware of the ways benefit plans can be leveraged in support. Grant Thornton LLP’s Human Capital Services practice offers the following list of suggestions for employers seeking ways to support their affected employees.

Provide direct financial assistance to employees
  • Consider making cash payments and/or loans to affected employees and their affected family members for personal expenses incurred as a result of the disaster, such as meals, lodging and repair of a personal residence. If the company sponsors a private foundation, consider making payments through the foundation.
  • In lieu of or in addition to cash, consider providing meals, supplies, tools, or other essentials to affected employees and their affected family members.

Expand compensation and benefits programs
  • Consider giving employees affected by the disaster additional paid time off to recover from the disaster.
  • Consider establishing an employee assistance plan if one does not already exist. If one does exist, inform employees about the specific ways in which the plan can provide assistance in recovering from the disaster.
  • Consider providing disaster recovery information as part of the employee assistance plan or separately, such as the need to file insurance claims, FEMA procedures and governmental and nongovernmental sources for assistance.
  • Explore whether the company’s retirement plans allow loans and hardship distributions. If so, communicate this to employees. If not, consider adding these features. It may be possible for a plan to make loans and hardship distributions immediately, even if the plan does not currently provide for them.
  • Consider allowing employees affected by the disaster to telecommute for a specified period of time if doing so would ease their recovery efforts.
  • Consider preparing a communication to employees in appropriate forms such as texts, emails and letters reminding them of mental health benefits available under the company’s medical plan that can assist with conditions such as stress, anxiety and post-traumatic stress disorder.
  • Explore whether the company’s medical plans can waive co-pays or reduce deductibles for mental health or prescription drug coverage related to prolonged exposure to flood waters or other disaster-related health conditions.

Facilitate ways for employees to help their fellow employees
  • Consider creating a major disaster leave-sharing plan for employees not affected by the disaster to surrender accrued leave, with the surrendered leave contributed to a leave bank for use by other employees who may need time off in excess of their accrued leave as a result of the disaster.
  • Consider identifying employees who need help with various recovery tasks, such as cleaning up their homes, and communicate this to other employees who may be willing to help.
  • Consider developing a communications tool for all employees affected by the disaster to share information with each other as to available resources in the community.

Think outside the box and identify needs proactively
  • Evaluate potential needs of employees affected by the disaster, such as finding daycare for employees with young children when schools will be closed for a prolonged period of time. Explore providing subsidized or customized daycare services through donations or other sources.
  • Consider having a member of the company’s procurement team research availability and pricing for items such as hot water heaters, air conditioning units, washers and dryers and other appliances. These household appliances are not always covered by insurance at full replacement value and may become hard to find in the immediate months following a storm or other disaster.
  • Consider having a member of the company’s facilities/real estate management team put together a list of contractors that employees can connect with when the time to rebuild begins. Also, consider whether the company’s purchasing power as a buyer of services can assist employees in finding qualified and timely resources.
  • Alternatively, look into creating a list of questions that employees can use in assessing the quality of contractors and other rebuilding professionals.
  • Consider researching and sharing with employees information about surrounding communities where employees can relocate in the months following the disaster, and include information such as availability of temporary housing (for example, hotels), schools, hospitals, healthcare providers, etc.

Support charitable organizations that are active in supporting individuals affected by the disaster
  • Consider making cash contributions to selected charitable organizations, private foundations or donor-advised funds that support disaster-relief efforts.
  • Consider creating a leave-based donation program where an employee can elect to forgo vacation, sick or personal leave in exchange for cash payments by the employer to a charitable organization.
  • Consider encouraging employees not affected by the disaster to support organizations involved in disaster recovery by donating their time and money.
  • Consider establishing a corporate foundation or disaster relief fund to facilitate the solicitation and collection of employee gifts for future unforeseeable disasters.
  • Consider providing resources to employees to advise about the tax consequences of their charitable giving.

Many of these alternatives require consideration of the tax treatment of them, as well as other factors. For example, certain types of financial assistance to employees may be tax-free if structured in the appropriate manner. The IRS also provides disaster relief in the form of special treatment for things like hardship waivers and donations of leave. Please feel free to contact any Grant Thornton professional with any questions.

Contact
Eddie Adkins
Partner, Washington National Tax Office
+1 202 521 1561

Jeffrey Martin

Partner, Washington National Tax Office
+1 202 521 1526

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