How benefits can help employees suffering in Irma’s wake
As employees seriously impacted by hurricanes Harvey and Irma begin to come to grips with the devastation, they might be wise to take advantage of several existing benefits, industry experts say. In addition, HR and benefits managers may need to create some new ones immediately to help employees get back on their feet.
Here is an overview of some benefits that can be used to help employees.
“Some employees will need extra time, possibly several days, to deal with the aftermath of a natural disaster,” says Zack Pace, senior vice president of the benefits consulting unit of insurance firm CBIZ. “Documented programs could prove useful in catastrophic storm-related situations,” he adds. The can include unpaid as well as paid leave programs.
It is not unreasonable to require employees to exhaust accrued PTO before granting them extra paid days off. A careful balancing act will be needed, however. It’s important to avoid, in effect, favoring employees who had already exhausted their PTO before the storm, against those employees that had not yet tapped theirs.
That might be accomplished by granting extra emergency PTO after a specified numbers of days away from work have been taken. That way, employees who had already used up vacation days would not appear to enjoy a windfall relative to employees who had not yet done so.
Another important benefit under these circumstances is telecommuting, notes Pace.
“If you don’t currently allow it, now might be a good time to start one, and if you already allow telecommuting on a restrictive basis, you might want to liberalize it,” he says.
Employees with school-aged children whose schools have been closed might be scrambling to make emergency child-care arrangements. A temporary liberalization of telecommuting benefits may be required to accommodate such employees, as well as employees who need to stay home (assuming their homes are habitable) to supervise contractors making repairs.
Employees whose homes were severely damaged might have had to take up residence with relatives beyond commuting distance to the workplace could also benefit from a liberalized telecommuting policy.
Even well-insured storm damage victims will take a big financial hit with home repairs and replacing destroyed property. Homeowner insurance deductibles can be high. In addition, many employees may discover their insurance policies don’t provide the protection that thought they did.
Often this can lead to employees’ seeking a hardship distribution from their 401(k). Although the IRS has indicated that a major hurricane like Harvey or Irma do satisfy permissible hardship withdrawal criteria, that isn’t always the best course of action for employee. “If an employee requests a hardship withdrawal, in my mind that’s an immediate referral to the EAP for financial counseling,” says Robert Lawton of Lawton Retirement Plan Consultants.
“Employees need to understand the implications, such as the fact that after all the taxes they’ll have to pay, between the penalties, state and federal income taxes, they’ll probably only wind up being able to keep about half of what they take out,” he says. “And that money can never go back into the plan.”
A plan loan might be a better option for the employee — or not. “It’s a slippery slope toward giving advice when employers try to explain these decisions to employees, and that’s not the employer’s role,” Lawton warns. “That’s why it’s important for the employee to be referred to a financial counselor.”
Emotional health support services
Experiencing a severe natural disaster — even when direct personal loss is limited — can take an emotional toll on employees. That can range from very mild symptoms to those akin to post-traumatic stress disorder (PTSD). It behooves employers to promote their employee assistance plan benefits to encourage those who might benefit from counseling to take advantage of the opportunity, experts say.
“It is to both the employees’ and employer’s benefit to help workers manage the impact of natural disasters and critical incidents,” says Ann Clark, founder and CEO of benefits firm ACI Specialty Benefits. “Research indicates that when employees are exposed to a critical incident that is dealt with inappropriately, these employees are more likely to experience an increase in personal and health-related problems, and are at greater risk of using more sick days, having lower productivity or leaving their employment following the critical incident.”
Group legal and disability insurance
Employees that have taken advantage of group legal benefits might be able to tap that resource to learn about their legal rights if they run into issues with their insurance company, or landlord if they are being required to pay rent for a home that’s uninhabitable due to storm damage.
Finally, employees who sustained personal injuries in the storm severe enough to keep them from being able to work for an extended period might be able to take advantage of disability income benefits.